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Tuesday, January 14, 2014

More Ohio Landowners Are Falling Victim to Forced Pooling Orders

From the Akron Beacon Journal:
Steve Neeley did not want to get involved in Utica shale drilling.
He had invested heavily in building a country estate on 9½ acres off Pontius Road in the southwest corner of Portage County. He was concerned about hydraulic fracturing, or fracking, and wanted nothing to do with it.
The 57-year-old Neeley was repeatedly approached by Chesapeake Exploration LLC, part of Chesapeake Energy Corp., to lease his land. The company offered a signing bonus of $1,200 per acre plus 12½ percent royalty of natural gas and liquids from the well. He repeatedly refused.
Then, in late 2011, Neeley and 23 neighbors who also had rejected the company’s lease offers were forced to take part in Utica shale drilling under a little-known and seldom-used provision of Ohio law called "unitization."
With approval from the Ohio Department of Natural Resources, Chesapeake was allowed to include 24 unwilling landowners in the large drilling unit - an area of land under which the company can extract resources - even though the owners had not signed leases granting rights to the minerals below.
By establishing what is called a unit operation, Chesapeake was allowed to drill horizontally through the shale thousands of feet beneath their properties and maximize profits from natural gas and liquids. The unwilling participants receive payments after wells go into production, but the rate is not negotiated in the way it is with others.
The Suffield unitization case was the first to be sought and approved in Ohio in recent decades, but more are being filed as drilling intensifies.
To date, 22 unitization requests have been filed in Ohio, of which six were approved, six were resolved or dropped and 10 are pending.
The requests would create units totaling nearly 15,000 acres in Portage and Stark counties in the Akron-Canton area, and Carroll, Belmont, Harrison, Columbiana, Trumbull and Jefferson counties, which stretch from Warren to the Ohio River and Interstate 70.
Chesapeake has filed 14 requests; Gulfport Energy Corp., three; Halcon Energy Corp., two; BP America Production, two; and Atlas Noble LLC, one.
You can read much more in the rest of the article by clicking here. 

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