OH Landowners with Early Utica Leases Still Get Good Royalties

Some 10 years ago in the “early days” of the Ohio Utica Shale, landowners signed leases not knowing about the Utica and the bonanza it would soon bring. A group of 24 landowners in Columbiana County signed a lease in 2008 with Anshutz–for a few bucks an acre and 12.5% royalties. Seemed like a good deal then. But five years later leases were going for $5,000-$6,000/acre in signing bonuses and 20% royalties. It didn’t seem like such a good deal then. Chesapeake Energy later bought the Anshutz leases. We all know about the shenanigans Chesapeake plays with royalty payments. But these wells produce mainly oil instead of gas. In the early days, a 12.5% royalty, even on properties where post-production deductions “generously” taken, yielded a lot of money. Then the price of oil bottomed out and royalty checks shriveled up. With the price of oil back up, royalty checks, while not as much as they were 4-5 years ago, are still much higher than they were a few years ago. All of which is to say: When the price of oil (or gas) goes up, it covers a multitude of post-production deduction sins. But when the price is down, landowners get the shaft. At least, some landowners. Here’s the story of some of those Ohio landowners who signed early. As we read the story, our impression was this: Yes there’s been some bad (even lawsuits), but there’s been a lot of good too. And in the end, these landowners (like others we’ve spoken to in person at various events), would say if they had to do it all over again, they would. That is, shale drilling is worth it, even with the bad, and the ugly…
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Exclusive: Anschutz Wins 4 Yr-Old NY Methane Contamination Case

exclusiveAn MDN exclusive: In 2010, at the beginning of widespread public consciousness about the Marcellus Shale and a time when drilling was just taking off in Pennsylvania, a New York City personal injury law firm smelled opportunity with a group of landowners in Chemung County, NY. Nine families living in Big Flats claimed that nearby gas drilling from Anschutz Corporation had “contaminated” their water wells (see our story at the time, Supposed “First Claim” Filed in New York Alleging Water Contamination from Hydraulic Fracturing Gas Drilling). The NYC law firm claimed in a press release (falsely) that the two wells drilled by Anschutz had been fracked (see Anschutz Exploration Responds to Lawsuit Claiming Drilling Operations Contaminated Water Wells in Big Flats, NY). The case started out in a lower court, called Supreme Court in New York (go figure) and eventually ended up in U.S. District Court in Western NY. Last week, U.S. District Court Judge Charles Siragusa dismissed the case against Anschutz…
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Important Developments in NY Fracking Ban Court Cases

court gavelThere’s been an important development in two cases on appeal in New York State courts that challenge municipal bans of fracking. The two cases challenge municipal fracking bans in the Town of Dryden, NY (see this MDN story for background) and the Town of Middlefield, NY (see this MDN story for background).

According to lead attorney Tom West, all the necessary paperwork for both cases has been filed (called “perfecting” the case). West believes both cases will make it onto the Appellate Division of the Supreme Court docket for an early February hearing of oral arguments. The Appellate Division typically issues an opinion 6-8 weeks following oral arguments, so we should have a decision by late spring. In addition and of keen interest, the plaintiff in one of the cases has changed.

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Another Look at the Dryden Fracking Ban Court Decision

Last week, New York State Supreme Court Judge Phillip Rumsey ruled that the Town of Dryden has the right to ban gas drilling within its municipal borders (see this MDN story). As MDN pointed out, this is “round one” in the fight for landowner property rights. The Supreme Court in New York is only one step above county court. The Court of Appeals is the highest court in New York State.

Others have weighed in on the Dryden decision, including the Dryden Safe Energy Coalition (DSEC), a pro- but very much safe-drilling group headquartered in Dryden. From the DSEC press release following the decision:

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NY Judge Rules Town of Dryden can Ban Shale Gas Drilling

court gavelYesterday, Tompkins County (NY) Supreme Court Judge Phillip Rumsey handed anti-drillers a first, and likely short-lived, victory. He ruled that the Town of Dryden, located near Ithaca, has the right to ban shale gas drilling. As with many legal issues, this one is complicated, so let’s take a look at the case, Judge Rumsey’s decision, and what happens next.

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Driller Sues NY Town to Challenge Local Drilling Ban

judge's gavelAnschutz Exploration this week will file a lawsuit against the Town of Dryden (NY) to strike down the town’s recently passed ban on gas drilling. Dryden is a small township with two villages—Dryden and Freeville—located in Tompkins County, near Ithaca. Its land area is 94.2 square miles with some 13,500 people living there.

In New York, the state reserves the right to regulate the oil and gas industry and, according to state law, local municipalities are restricted to regulating road use with respect to oil and gas drilling. Dryden’s measure banning drilling (passed in August) is, according to the drilling industry, illegal. This lawsuit will challenge it.

Dryden officials argue that the state does not and cannot tell a municipality how it can regulate other industries, and the gas industry should be no different. It is a classical constitutional issue and both sides are watching this one closely.

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