Hess In Jefferson County Ohio

Just read on MDN where Hess lost in court pertaining to buying about 300 old tailgate leases from other O & G Companies in Jefferson County Ohio and now must pay something in the neighborhood of $5 k per acre signing bonuses to affected landowners.

Wonder what that's going to translate to pertaining to the rest of the lease market ?

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Permalink Reply by TM on October 2, 2013 at 7:47am

These are supposedly 5 year leases that are set to expire from what I read. Hess is arguing they had lease provisions that they did not have to drill a well if they paid delayed rental payments. It might bode well for people that might be in the same situation with expiring leases and no well drilled.

Permalink Reply by Joseph-Ohio on October 2, 2013 at 7:58am
From what I read on MDN they lost their argument and now have to pay big signing bonuses to the affected landowners.

I'm thinking if that's now a case in point that drilling the Utica under terms and conditions specified in some old 'tailgate' class lease agreement isn't going to fly in Ohio anymore.

Further wondering how that will affect the lease market in Ohio ?

Will O & G step away and pull in their horns ?

Don't think so really. They need the O & G if they want to stay in the O & G business.

What's your interpretation ?
Permalink Reply by martin on October 3, 2013 at 2:42am
Hess stopped leasing in Jefferson county two years ago. I wonder if the knew this was a possibility and stopped leasing to save money or will they just not resign these leases and let another company grab them. It was also very smart of the Griffiths not to cash delay rental payments. Someone gave them great advice.
Permalink Reply by Renee E. Dorsey on October 3, 2013 at 3:22am

Joseph - can you please post a link to the case?  My dad might be affected....thanks!  (If it is a fee based site, you could email me a pdf....)    :)  

Permalink Reply by Joseph-Ohio on October 3, 2013 at 3:48am

I have no access to such a link; but, perhaps Marcelllus Drilling News (MDN) does.

That's all I know neighbor.

However, I think this could have far reaching impact; especially on any un-leased landowner facing the threat of being 'force pooled' into a drill unit assembled under a deficient 'tailgate' class lease.

What's your / everyone's take on that ?

 

Permalink Reply by Joseph-Ohio on October 3, 2013 at 1:57pm
Try this link to a Farm & Dairy article for more information:
 

http://farmanddairy.us1.list-manage.com/track/click?u=53eb55371e95a...

 

The article reads that Hess is going to continue fighting the ruling.

I guess that means appeals and / or a higher level Federal Court.

No wonder these Utica O & G things take so long.

I'd think that time and money would be better spent developing infrastructure, wells, production and sales / marketing.

But, that's just me.

I guess I'll have to wait and see what happens next.

Wishing the landowners down in Jefferson County much luck in their battle.

Hope they have their legal fees covered by the O & G opposition.

That's got to be pricey I'm guessing.

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