Wheeling, WV High School Leased for Shale Drilling, $6K/Acre
Deals to lease land for Marcellus and Utica Shale drilling happen on a regular basis–even today. Perhaps not as much as several years ago when large deals cut by landowner groups were headline news. But lease deals still happen–you just don’t hear about them because they are private deals (deal terms are not recorded at the county clerk’s office). However, every now and again a public entity–a town or school–will lease land for shale drilling. And that IS a matter of public record. When we spot such deals, we like to bring you the details. Such a deal was cut on Monday, by the Ohio County Board of Education. The Board of Ed signed a deal with American Petroleum Partners (from Pittsburgh) to lease the 66 acre Wheeling Park High School campus for shale drilling–under (not on) the campus. Which is so cool for a number of reasons. First of all, the deal includes a $6,000 per acre signing bonus, and if/when the gas begins to flow, an 18% royalty. Second of all, it’s a school! How many times have we read about nutjob anti parents with their knickers in a twist over putting a shale well more than a half mile away from a school, like we heard about endlessly from those in the Mars School District (Butler County). It was a long, hard fight, but we eventually won (see Martian Victory! 2 Wells Near Mars School Nearly Done Drilling). The antis claimed drilling near schools would harm the crumb-crunchers. We see the result of that lie. We’ve pointed out, many times, that a school near MDN HQ, located in northeastern PA (Elk Lake), leased their property for drilling and has reaped enormous financial rewards (see Elk Lake School LOVES Their 2 Marcellus Shale Wells & Gas Heat). We’ve seen the Elk Lake school building and the nearby wellhead. No negative effects on the chil’ren. And now the very smart members of the Ohio County Board of Ed and the kids at Wheeling Park High will enjoy the same financial rewards…
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A Bradford County, PA judge has turned down Chesapeake Energy’s attempt to wiggle out of a royalty lawsuit on a technicality. However, the judge also punted the case to a higher court to settle what he calls “novel questions of law”–rather than spending more time and money on such issues at the county court level. This is good news for landowners in Bradford County who have been shafted by Chesapeake’s royalty scheme to shift the cost of piping and processing to landowners by using inflated values for those services. In December 2015, Pennsylvania’s felony-indicted Attorney General, Kathleen Kane (now gone), brought a lawsuit against Chesapeake Energy, Anadarko and Williams accusing them of, among other things, royalty fraud (see 
Another 350 acres of mineral rights were just auctioned off yesterday by the Bureau of Land Management in Ohio’s Wayne National Forest (WNF)–for a total of $944,000 raised. What’s that? You haven’t heard or read that news in ANY local or national news outlet? Welcome to the Big Government/Media complex where something isn’t “news” unless Big Lib media says it’s news. And yet, this most recent auction is, for landowners who have mineral rights in WNF and drillers who drill there, really big news. WNF is a “patchwork” of public land scattered among private land. Some 60% of the mineral rights below WNF are privately owned. Those mineral rights owners were denied the use of their property rights for more than a decade–until the BLM finally began auctions of government mineral rights in BLM last year (see 
Pennsylvania landowners may think Christmas came early this year. Perhaps you’re a landowner and just received a surprise royalty check in the mail for a long-dormant well on your property. That well hasn’t produced in what seems like forever. Last time you got a royalty check was what…maybe 10 years ago? And look at this! Santa just visited! After all that time the driller decided to pump some more from that old well. But before you run to the bank and cash the check, thinking you can pay for more Christmas presents, better think twice. Or three times. You may about to be taken for ride. In July the Pennsylvania Senate passed an awful budget bill that includes a variety of new taxes, including a new severance tax on the Marcellus industry. The Senate also slipped in Section 1610 into the budget bill, which changes established lease law with respect to oil and gas wells that no longer produce anything (see 
The legal beagles at the Vorys energy law firm have been keeping a close eye on court cases in Ohio that affect the oil and gas industry. Two of those cases caught our attention as being worthy of mention because they have the potential to affect Utica Shale rights owners, and conversely drillers, in the Buckeye State. In one case, a landowner thought she could terminate a lease by not picking up her mail and depositing royalty checks in the mail. Just ignore the mail and claim the driller wasn’t paying up. Oops. Nice try, but that didn’t fly in court. In another case, a landowner with an old oil & gas lease (dating back to the 1970s) tried to break the lease because the driller is happy as a clam to simply get gas out of conventional/vertical/shallow wells, and not go after (or allow someone else to go after) the deeper shale layers. The landowner tried to get the court to at least agree to free up the deeper layers so he could lease those–but no dice. The court found the existing lease is producing in “paying quantities” and under the terms of the lease, the landowner does not have the right to sever the lower layers from the upper layers. Here’s the details, with copies of the respective court decisions…
A Harrison County, OH landowner signed a lease back in 2006 granting a driller “broad rights” to extract oil and gas on and beyond his property. The lease was signed for $1 plus royalty payments. Obviously the landowner (frankly, nobody) at the time had any idea the Utica Shale miracle would happen just a few years later. The lease signed by the landowner was, in retrospect, a bad one. But that doesn’t excuse the landowner from living up to the obligations under that lease, which the landowner has learned the hard way. The lease was sold to Eclipse Resources and Eclipse wanted to, under the terms of the lease, drill new wells which would not only drain that landowner’s property (136 acres), but also drill under neighboring properties where Eclipse also owned the lease rights. That is, the well would be located on the landowner’s property but access gas under other properties–yielding royalties to others but not the landowner. The landowner objected to new wells on his property without a new lease (can’t blame him). However, first a district court and now the U.S. Sixth Circuit Court of Appeals decided for Eclipse against the landowner. Below is a summary of Eclipse Res. Ohio, LLC v. Madzia, followed by a copy of the full decision from the Sixth Circuit…
The United States Supreme Court has refused to hear an appeal of an important West Virginia case, which means the current ruling stands that allows EQT and other drillers to deduct “reasonable” post-production expenses from landowner royalty checks. It is a victory for drillers and a blow to some landowners. How did we get here? A brief history: Last December MDN reported on the huge WV Supreme Court decision against EQT that disallows EQT from deducting post-production expenses from royalty checks, even with signed contracts in place (see 
A month ago MDN brought you the news that the U.S. District Court in Akron, OH had made a major ruling that affects all Utica landowners and drillers (see 
A journey which began for Pennsylvania landowners in Butler County, PA in July 2015 is nearing an end. Two Butler County, PA landowners with a combined 245.7 acres of land leased to XTO Energy sued XTO in 2015 claiming that XTO is breaking the lease agreement by paying royalties below 1/8 of what XTO receives in revenue for the gas (see 
An off-hand comment by a Pennsylvania Gov. Wolf staffer has landowners in northeast PA hopping mad–and with good reason. Speaking on the topic of PA landowners getting screwed out of royalty payments by drillers deducting inflated post-production costs (sometimes sending royalty statements where landowners OWE the drillers money!), Wolf deputy policy director Sam Robinson said this: “I think there was a crescendo of that kind of claim in 2015 to 2016…There’s been real movement in a positive direction on that issue.” Really? Not according to Bradford County Commissioner Doug McLinko and National Association of Royalty Owners (NARO) PA president Jackie Root. Not only is the issue not resolved, but the industry, under the prompting of EQT, snuck through an “environmental rider” in the recently passed-and-signed-into-law Fiscal Code bill (called Section 1610) that gives drillers a back door to reactivate old, non-producing wells after they have not been producing (and the lease considered terminated) under certain conditions (see 
In September 2016, Chesapeake Energy filed disclosure forms with the Securities and Exchange Commission which says the U.S. Dept. of Justice (DOJ), a number of states, and even the U.S. Postal Service have served the company with subpoenas for information (see 
The Pennsylvania State budget is a complicated pile of…bills. At it’s core are three basic budget-related bills that implement the $31.9 billion state budget (unwisely) passed in June. It was unwisely passed because Republican lawmakers voted for a plan to spend money without having a way to pay for it. Stupid. PA Gov. Tom Wolf (liberal Democrat) demanded part of the new revenue required to pay for all that wild spending is to tax the Marcellus industry with a severance tax–on top of the existing impact tax (already the equivalent of a severance tax in other states). One of the three main bills to pay for the budget is the Fiscal Code bill–House Bill 674. HB 674 was adopted by the PA Senate on Monday (vote of 41-9). In the Senate version, which now goes to the House for final adoption, there are a number of “environmental riders”–or bits of legislation that have nothing to do with the budget or spending, but tacked on as a way of getting them passed without the mess of voting on them individually. Swamp politics. One of those provisions is “SECTION 1610-E” which gives drillers the right to reactivate old, non-producing wells after they have not been producing (and the lease considered terminated) under certain conditions…
We’d call this a case of Atlantic Coast Pipeline (ACP) and Mountain Valley Pipeline (MVP) getting taken to the (pipe) cleaners. The anti-fossil fuel (and far-left) Virginia Outdoors Foundation (VOF) warned both Atlantic Coast and Mountain Valley, years ago, that land the non-profit previously tied up with non-development easements is off limits for their respective pipeline projects. So-called “open space” organizations like VOF get private landowners to sell them easements to their properties–the right to disallow any kind of development on the land, no matter who buys it in the future. But sometimes “no development” doesn’t actually mean “no development”–it’s just a bargaining position. The VOF has just cut a deal to allow ACP and MVP to cross a cumulative 53 acres of land, land with no-development easements, in exchange for adding 1,130 acres in other places to the their no-development easement stash. Oh, and $4,075,000 in cash for VOF’s coffers will be chipped in too. A true shake-down by shake-down artists, all to stick a couple of pipelines in the ground for a few hundred feet where nothing will get built over top of them anyway…
