Monday, September 17, 2012

Columbia Gas & Hilcorp Working With Angry Columbiana County Landowners

From the Morning Journal:
Two days this past week those who own land in the Brinker Storage Field were invited to meet with Columbia Gas Transmission and Hilcorp Energy officials to discuss what will become of the already existing mineral gas leases there, among other things.
The meetings are only two of other meetings held in private between the landowners and Columbia Gas, but officials had declined to make any information public in the past.
Although the meetings remained closed to non-landowners, spokesmen for the companies offered a brief insight into what was taking place.
Justin Furnace, corporate manager of external affairs for Hilcorp Energy, verified the bulk of the meetings have focused on the landowners' concerns regarding already existing land leases owned by Columbia. Hilcorp will be doing the actual drilling for Columbia.
The mineral rights leases on the 35,000-acre storage field date back to the 1940s, and due to the terms are keeping interested landowners from signing new, more lucrative leases with other oil and gas exploration companies like Chesapeake Energy.
Earlier this year the Cleveland Plain Dealer reported many of the landowners, and even Chesapeake, were unaware of the existing leases until they were in the negotiating stages of a new land lease. Some of the leases paid as low as $4 per acre and offered no royalty percentages, or a lump sum royalty of $200-a stark contrast to the sometimes more than $5,000 an acre and as high as 17 percent royalty offered by Chesapeake. According to a standard Chesapeake lease, royalties are paid continually as long as oil or gas is recovered from the leased property.
The Cleveland newspaper also reported that once Chesapeake learned of the long-standing leases any deals with landowners were off, since the company wanted clear title to the mineral rights.
As a result many of the landowners filed a lawsuit against Columbia, arguing the old leases have expired due to lack of activity on the properties and lack of payment of lease fees.
Under the existing leases, Columbia is permitted to store natural gas under the Brinker property in the Berea Sandstone formation.
Furnace did not offer any information on the status of the leases, but said the company intends to work with the landowners until they are "satisfied."
Read the rest of the article here.

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