Seven Families in Beaver County Fighting Chesapeake Energy - Named In Suit Filed By McRoberts Family

http://www.wtae.com/team4/30774631/detail.html

BEAVER COUNTY, Pa. -- Seven families are  fighting to stop a natural gas company's last-minute drilling plans on their  land before the company's lease expires next month.

The McRoberts family woke up Tuesday morning to find tree-cutters lined  up along their property in Darlington, Beaver County, getting ready to clear a  quarter-mile path to a proposed gas well site.

"Four generations of McRoberts have farmed this land, and we pay the  taxes and they're going to tell us what they're going to do? And they lied from  the beginning," said property owner Susan McRoberts.

When Channel 4 Action News' Jim Parsons went to the McRoberts' property,  the tree-cutters left without cutting any branches.

"Chesapeake (Energy) doesn't even have a permit to drill this well, and  yet they want to come in here and cut these folks' trees down without any  compensation," said McRoberts family attorney Steve Townsend.

Townsend filed a lawsuit Tuesday against O & G Investment of Ohio,  which signed gas leases with the McRoberts and six other families in 2005.

O & G sold those leases last year to Chesapeake Energy, which is also  named in the suit.

The suit accuses O & G of "intentionally and fraudulently  misrepresenting to the plaintiffs that (it) would reasonably develop the mineral  resources underlying their land."

"They promised these people the world and didn't pay a dime, and took  their land and held it hostage for years," said Townsend.

With the leases set to expire next month, the McRoberts are trying to  stop Chesapeake from conducting a last-minute drilling operation.

"It's too late, too late. Listen Jim, I couldn't rent a car for $200 a  month and not pay for it. They've had thousands of acres of land here that  they've not paid one cent for and they've held it seven to 10 years and haven't  paid anybody any money," said Townsend.

Chesapeake Energy has not commented.

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Permalink Reply by eric jenson on March 27, 2012 at 3:22pm

What was the lease for?  Example:  500 a month per acre for 5years???  more or less? 

Permalink Reply by Betty on March 28, 2012 at 1:51am

Don't see that info mentionned.  Looks to me that approx 10 years ago the land owners signed with a company "O&G Investments" -- but do not indicate terms of agreement..  Subsequenlty, O&G Investments sold their leases to CHK.  O&G is also mentioned as a defendant in the suit.   10 years ago (or pre-Marcellus) people were getting very little bonus money and the leases held very few protections for the landowners.   I'm curious to see how this plays out.   CHK is hoping to clean up their rep, and lawsuits like this do not help.

http://www.pittsburghlive.com/x/pittsburghtrib/news/s_788604.html

A group of 17 Beaver County landowners says in a lawsuit filed on Tuesday  that a Marcellus shale driller and an investment company deceived them on oil  and gas drilling leases and never followed through on the agreements.

The landowners are asking a Beaver County Common Pleas Court judge to break  the leases so they can negotiate with someone else to develop the mineral  resources. They're also seeking damages of more than $25,000.

"This involves hundreds of acres of land, and the (owners) haven't been paid  at all for it," said Pittsburgh attorney Steven C. Townsend.

A representative of Chesapeake Energy Corp., which owns several subsidiaries  the group is suing -- including Chesapeake Appalachia LLC, Chesapeake  Exploration LLC and CHK Utica LLC -- declined comment.

The lawsuit says, in part, that the defendants "have held the (owners') land  hostage and failed to reasonably develop their mineral resources for  approximately seven years."

The lawsuit also names O&G Investments in Wooster, Ohio, owned by  defendant Jay Henthorne Jr. and his son, Jason Henthorne. An office manager at  Petro Evaluation Services Inc., O&G's parent, said no one had seen the  lawsuit and could comment.

The lawsuit says that O&G and Jason Henthorne promised the landowners  that if they signed leases, O&G "would reasonably develop the minerals in  order to extract the minerals and pay royalties." But O&G never had the  money to develop or explore the land, the lawsuit says.

The suit says that O & G representatives told the landowners that if they  didn't sign leases, the company or its agents would drill on adjacent lands and  extract their gas without paying them anything.

Chesapeake is based in Oklahoma City and has an office in Canonsburg.

Read more: Beaver County landowners sue Marcellus driller - Pittsburgh Tribune... http://www.pittsburghlive.com/x/pittsburghtrib/news/s_788604.html#i...

 

Permalink Reply by Frank Nesmith on April 17, 2012 at 1:38pm
They got nothing for their land. Not one penny. The leases weren't notarized when they were signed. They didn't even get a copy of the whole lease. It's shameful.
Permalink Reply by Pete Bunner on April 19, 2012 at 3:29am

Drill Baby? Could you provide details on this lawsuit? It happend to me and a lot of others too. I would love to know the outcome.

Thank you!

Permalink Reply by Finnbear on April 19, 2012 at 5:25am

The lawsuit in question is the CHK/Anschutz deal

http://gomarcellusshale.com/forum/topics/chesapeake-sues-landowners...

Permalink Reply by Mike Knapp on April 19, 2012 at 10:45am

I'm a notary.  I've notarized thousands of oil and gas related documents.  Notarization is only required on documents that must be recorded, and it's ONLY required because ALL documents that are recorded must be notarized.  The situation you are talking about is alleging fraudulent notarization, where someone that DIDN'T actually witness the execution of the document notarized it.   Most land agents (including all of mine) are notaries so that they can notarize the signatures on the leases they obtain to avoid this situation. 

Permalink Reply by Finnbear on April 19, 2012 at 3:32pm

The whole notary angle of the CHK/Anschutz deal is nothing but a diversion. These landowners all signed willingly - not one of them is disputing that.

Permalink Reply by Finnbear on April 21, 2012 at 12:00pm

Only the lessor signature is notarized. The lessee does not always even sign the lease. It is their document to begin with and by virtue of their presenting it to the lessor, they have agreed to it and don't need to sign. If the landman is a notary (many are) and witnesses the lessor's signature at the lessor's kitchen table and then waits until he gets back to his office to notary stamp and sign the document then.....

Permalink Reply by craig on April 18, 2012 at 9:21am

Very true Mike, however it was more like 5-6 years before big money started showing up.

Permalink Reply by Pete Bunner on April 19, 2012 at 3:38am

Is Mike a loyal employee of Chesapeake?

Any other business transaction has disclosure rules. A publicly traded stock MUST provide a prospectus. A bank must detail even the terms of your savings account. The oil companies had inside information, hid their company names, sold all of us a string of lies, the government sat quietly while holding all the geological data, the landmen threatened and made many false promises. I am remorseful that I did not chase these scumbags off my property when I had a chance. 

So MIke your arrogance is a transparent attempt to protect these crooks who brag about duping the idiot landowners in their press releases to investors. Chesapeake has repeated this process 10 times over and have created Billions in cash to their bottom line on the backs of landowners. The good thing is Aubrey's little tricks are coming to light finally like his 1.1 billion in personal loans from a financier of the company he runs. When it explodes and falls apart I hope a real company buys the assets and treats landowners as a business partner not a mark for their next scam.

Permalink Reply by Mike Knapp on April 19, 2012 at 5:27am

Pete,

I'm not a CHK employee.  I own an independent land leasing firm.  I'm not protecting anyone.  As others have very pointed out in this thread, in a new area that is unproven, companies don't offer top dollar.  Once the area is drilled and companies know what to expect,  the offers go up (if things are good) or they go down or they go away if the results are bad.  

There are many areas of the Marcellus where companies paid a bunch of money and got no drillable leases.  Do those gas companies complain to the landowner that they leased them a bunk property and demand their money back?  Of course not.  The Bulls didn't pay Michael Jordan  millions of dollars his rookie season.  Rookies have to prove themselves worth the big money.  This is no different.  The Marcellus was a rookie. Gas companies took a chance.  Some areas did well, so offers increased.  Other areas turned out to be worthless and the gas companies got burned.   I'm not saying that there aren't some landmen out there that used some questionable tactics, and it sounds like you had an unfavorable experience, but there's no reason to indict the entire industry because of it.  

In this specific case, the landowner signed before anyone had even heard of the Marcellus.  They didn't get any up front money, but they are in a good area, they have lots of land, and will have to deal with the horrific consolation prize of millions of dollars in royalty payments.  There are plenty that would be more than happy to trade places with these folks.

Permalink Reply by Kathleen on April 19, 2012 at 6:14am
Darn I hate to admit it but it's true. How to make this fair is something that may never be figured out but these people do have a chance now they didn't have years ago of being millionaires. My lease states for no reason ever thought of can the oil co. ever ask me for my bonus back. If these rules changed to "well if we find a sweet spot under your land we will give you a bonus", than the rule would have to change to "if we find out you have nothing of value to us under your land than you have to give % of the bonus back and we retain that right for 5 years". None of that will ever happen.
All I wish is all parties have similar info to base a decision on when signing. I've spoken to a few landman an IMO and I'm finding a good decent landman is not the rule its the exception. I know they can't tell all but something would help. Again IMO if they knock on your door that alone should tell you something.

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