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Permalink Reply by Utica Shale on October 21, 2012 at 3:25pm

Some of the residents who live within the Brinker Storage Field in Columbiana County have reached an agreement with the parent company of Columbia Gas about deep mineral rights.

The company offered a group that had elected not to sue NiSource, the parent company of Columbia, a 15 percent royalty on oil and gas production, said state Rep. Craig Newbold, R-1st, who helped facilitate the deal.

Newbold, of Columbiana, met with both residents and NiSource separately to discuss the situation. NiSource has signed an agreement with Hilcorp, a Houston-based oil and gas company, to develop oil and gas in the storage field.

“I think both groups were willing to compromise,” he said. “The agreement the residents got was a little above their expectations.”

The properties had been subject to decades-old storage leases, which meant no lease bonus and royalties of just $200 a year if gas was being stored under their property — and nothing if it wasn’t.

As part of the agreement, the residents also will receive a modern lease. Older leases do not contain any information about water testing before drilling, setbacks, reclaiming the land or numerous other landowner protections that are standard in leases signed today.

The decades-old leases provide little protection to the surface-rights owner.

Property owners within the storage-field area received a letter in May stating the company is “in the process of developing a plan regarding the oil and gas potential in the area in a way that protects the integrity of the storage facility that serves the region’s critical energy needs.”

 

Although the deal has not been completed, there has been progress, and it’s moving forward, said Chevalier Mayes, communications manager for NiSource.

“We look at this as a long-term relationship with the landowners. We want them to be happy,” she said.

There remains no agreement, however, with the residents who live within the storage field who elected to sue NiSource, Newbold said, adding, “They’re continuing to pursue legal action.”

Newbold said he became aware of the situation with the Brinker leases and invited himself to a meeting between property owners and attorneys who were signing clients for a lawsuit.

During a meeting with NiSource, Newbold said he informed the company that he hoped it would be able to reach a compromise with the residents. The group had been asking Newbold to sponsor a bill to create minimum royalties of 12.5 percent in Ohio.

“I told them I didn’t want to sponsor the bill, but if an agreement couldn’t be reached, I would,” he said, but he considered the bill a last resort.

Ross Porter, of Leetonia, who is part of the group that has filed litigation, said he has not been told of any settlement offer made to those who sued.

“I’m really disappointed in Columbia Gas and their parent company, NiSource,” he said. “I just want a lease that protects my property and my water, and these old leases don’t do any of that.”

The company has stated that it plans to drill in the storage field by the end of the year, Porter said.

The amended leases have not yet been formally filed, said Craig Brown, recorder for Columbiana County.

 

Permalink Reply by Inchworm antenna on October 21, 2012 at 4:27pm

Thanks US for finding and posting this article.

The modern lease amendment offers are reportedly being mailed out to all non-suing Brinker Field landowners, with the "older" leases.  So if people did not receive one they should not be worried yet.    

As the gentlemen says in the article above about concerns with water and property protections,  the lease amendment offer addresses those discrepancies in equal or far better fashion when compared to many other modern leases.

I look forward to the economic progress this could bring to our community.  For now, gone are the days we face exploitation, and a pittance if our natural resources are extracted.  

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