Chesapeake to Release 12K Acres of NY Leases Next Week

About a month ago, MDN told you that Chesapeake has decided to end their fight with New York landowners over extending their leases (see Chesapeake Energy Throws in the Towel on NY Shale Drilling). Although it’s taken the past month to iron out the paperwork, it seems that Chesapeake (and NY landowners) will finalize and sign an agreement “sometime next week” to release 12,000 acres of leases in Broome and Tioga counties.

Chesapeake walking away from these leases is bittersweet. Sweet because it releases landowners from old leases signed before fracking was even contemplated, allowing them to re-sign a new lease with better terms. Bitter because it indicates Chesapeake is unwilling to put up with Gov. Andrew “Ditherer” Cuomo any longer as he agonizes over whether he will or whether he won’t allow fracking…
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Cuomo & DiNapoli: Asleep at Sales Tax Switch in NY Southern Tier

MDN has long chronicled the sad situation for landowners in New York State with a moratorium that is, as of today, 5 years and 20 days old. It has had catastrophic economic consequences for New York, especially for those who live in the Southern Tier of the state–that area along the mid-state “southern” border with Pennsylvania (Broome, Tioga, Chemung, Steuben counties). Gov. Andrew Cuomo is spineless on the fracking issue–that much is clear. He won’t stand up to the shrill and unreasonable voices in his own party. No one will take him seriously on the national stage. Cuomo’s rising star has become a shooting star–straight down.

Thomas DiNapoli, NY State Comptroller, is clearly an avowed anti-driller. We’ve brought you a number of stories that illustrate his disdain for drilling (see MDN stories about DiNapoli here). We find it particularly offensive and hypocritical (although not surprising) that DiNapoli has just issued a report that shows sales tax revenue is up in most of the state’s counties, but down in Southern Tier counties–down a lot. DiNapoli bemoans the fact that the Southern Tier continues to take it in the neck–yet he makes no mention of how shale drilling could instantly reverse the economic misery of Southern Tier residents. Typical politician–identify the problem but offer no solutions…
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Chesapeake Energy Throws in the Towel on NY Shale Drilling

throw in the towelA good news/bad news story. The good news is that Chesapeake Energy is giving up the legal fight with landowners in New York to extend their leases beyond the original lease term. MDN has long chronicled the fight on the part of landowners to stop Chesapeake from claiming force majeure to extend leases signed for (in some cases) just a few dollars per acre–leases signed long before horizontal drilling and fracking were contemplated (see More on the NY Force Majeure Ruling Against Chesapeake). After two years of legal wrangling, Chesapeake is throwing in the towel. Landowners will now be able to sign with another company, if drilling ever comes to NY.

The bad news is, Chesapeake is throwing in the towel–as in they are giving up on NY–tired of the ongoing five-year moratorium in shale drilling. Wake up Cuomo! Your actions have caused this! You are causing direct economic harm to your residents every day the moratorium stays in place…
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Anti-Fracking Group Mails Propaganda Brochure to 190K NYers

Catskill Citizens for Safe Energy is mailing an anti-fracking brochure (killing precious trees from the Catskills to provide the paper, no doubt) to 190,000 residents throughout the Southern Tier area of New York—a region that desperately wants and needs drilling, and the area that will see drilling when/if the current moratorium is lifted. The brochure is pure propaganda and full of outright lies, but hey, this is still Ameritopia where the First Amendment is alive and well, for people on the left anyway.

An electronic copy of the brochure is embedded below so MDN’s fellow NYers know what they can use to line the bird cage with when it arrives.

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Important Decision in Court Case Affects all NY Landowners

speculation ahead A very important legal decision in New York potentially affects all New York landowners with and without drilling leases who have seen a sharp jump in their property assessments. A Broome County, NY Supreme Court judge has just ruled in favor of four Tioga County, NY landowners who sued to have their property assessments reduced, believing their assessments were unfairly raised because of the perceived increase in land value from the possibility (i.e. “speculation”) that the land may one day see Marcellus Shale drilling.

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More on the NY Force Majeure Ruling Against Chesapeake

MDN headlined a story yesterday about last week’s decision by a federal judge that went in favor of landowners and against Chesapeake Energy and Inflection Energy. The case found that Chesapeake and Inflection could not use the legal clause in their signed leases called “force majeure” to extend previously signed leases beyond the original 10-year term (see this MDN story for background).

One of the lead attorneys who brought the case on behalf of New York landowners is Scott Kurkoski, from the Vestal, NY law firm Levene, Gouldin & Thompson, LLP. Scott sent along a statement (below) along with a copy of the judge’s decision (also below).

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Judge Rules Against Chesapeake, Inflection in NY Lease Case

gavelAn important court case has ruled in favor of landowners against energy companies in New York State. Last Thursday, U.S. District Court Judge David Hurd ruled against Chesapeake Energy and Inflection Energy (and in favor of landowners) in a case where the companies had tried to extend leases beyond the original term by invoking “force majeure,” a legal phrase that means the terms of the lease could not be carried out due to extenuating circumstances.

Chesapeake and Inflection had argued that New York State’s moratorium on hydraulic fracturing of shale meant they could not drill on New York land for which they hold leases. But as with many things legal, the story is not so simple…

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Carrizo Says Owego, NY Well Vertical Only (for Now)

Yesterday MDN told you about an exploratory shale well being drilled in Tioga County, NY, just a few miles outside of the Town of Owego by Carrizo Oil & Gas (see this MDN story). We said that Carrizo was drilling a vertical well with plans to turn it horizontal when and if the fracking moratorium in New York is lifted. Were we wrong?

According to an interview given by Carrrizo to NGI’s Shale Daily publication, the well being drilled near Owego will not be turned horizontal. This is what was said:

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Carrizo Drills Exploratory Marcellus Well – in New York

What does Carrizo Oil & Gas know about the New York moratorium on fracking we don’t? The moratorium has been in place for 4 1/2 long years now. There are some signs the moratorium may soon end—witness the parade of mainstream news sources granting political cover and “permission” to Gov. Cuomo to make a pro-fracking decision. But the standard operating procedure by the DEC’s Joe Martens until now has been stall and delay.

Enter Carrizo. Today’s Binghamton Press & Sun-Bulletin announces that Carrizo is drilling an exploratory vertical shale gas well outside of Owego, NY (Tioga County), squarely in the “hot zone” of the Southern Tier where gas drilling will take place. Their aim? Find out if shale gas is present in the vertical well, and then turn the well horizontal when and if the moratorium is lifted.

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NY Fracking Fight Heads to Townships – Rest of the Story

An article in yesterday’s Wall Street Journal focuses on an issue MDN has covered for some time: how the fight over hydraulic fracturing in New York State has “gone local,” meaning it’s largely going to be decided town by town throughout the state.

The article notes a few statistics—about 100 or so towns have voted for either a short-term moratorium on fracking, or an outright ban. And about 60 or so towns have voted to “support” drilling. (Shameless self-promotion: MDN’s Marcellus and Utica Shale Databook Vol. 2 has the complete list of which towns have voted which way on the issue.)

But the pure numbers of “100 against, 60 for” does not come anywhere close to telling the whole story…

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Village of Owego, NY Votes to Ban Fracking for 1 Year

Owego NYLast night the Village of Owego (Tioga County, NY) became the second municipality in the Marcellus gas-rich Southern Tier area of New York state to vote for a temporary ban on fracking. The village board voted to ban fracking for one year to give the village a “time out to look at the documentation,” referring to the village’s master plan for not only drilling but flooding.

Towns, villages and cities across the state expect new drilling rules will soon be released by the Dept. of Environmental Conservation. In anticipation of that, many are voting to either ban fracking, or voting to support the DEC’s forthcoming rules. Owego is only the second municipality in the rumored five county area likely to receive permits for fracking when the time comes. Those counties (in what is referred to as the Southern Tier) are Broome, Chemung, Chenango, Tioga and Steuben.

The City of Binghamton—with a Democrat Mayor and an all-Democrat city council—rammed through a fracking ban last December, while they still had a stacked deck (before new incoming Republican council members were seated in January).

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NY Rumor Mill: Cuomo to Allow Test Sites for Fracking?!

rumor millThe anti-drillers are hot and bothered. A fringe anti-drilling group called Toxics Targeting (from where else, Ithaca, NY) held a small rally in Binghamton yesterday. They enlisted the support of the Binghamton Mayor Matt Ryan to their cause. And this week’s cause? Send a letter to Gov. Andrew Cuomo asking him to ban fracking, but especially to drop any plans to allow the drilling of “demonstration wells” in Broome, Tioga and Chemung counties.

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Tioga County, NY Lease Deal with eCORP Falls Apart

champagne bottle and glassIt looks like it’s time to put away the champagne bottle and glasses that New Yorkers had brought out to toast a deal in Tioga County, NY that would use LPG (waterless) fracking and perhaps herald an early end to more than four years of a horizontal drilling moratorium.

In March, MDN reported on a deal announced between eCORP International and the Tioga County (NY) Landowners Group, also known as Southern Tier Energy Partners (STEP), to lease 135,000 acres in Tioga County with an eye to using LPG waterless fracking (see this MDN story). After the initial announcement, eCORP released another press statement outlining the deal that both sides had supposedly worked out, a somewhat complicated arrangement in which the approximately 2,000 landowners would be split into 13 independent operating companies and would become part-owners in those companies (see this MDN story).

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Judge Orders Arbitration in Chesapeake ‘Force Majeure’ Case

U.S. District Judge David N. Hurd ordered that a lease dispute case between a group of landowners in Broome and Tioga counties (New York) and Chesapeake Energy will go to arbitration for about 150 of the landowners. That’s not-so-good news for those landowners who want to keep the case in federal court. But he also ruled a second case with 32 landowners can go forward in federal court because those leases did not contain an arbitration clause. That’s good news for those landowners, and may end up being good news for those in arbitration. A copy of the judge’s order is embedded below.

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eCORP & Tioga County Landowners Become Partners in Lease Deal

tie the knoteCORP International and the Tioga County (NY) Landowners Group, also known as Southern Tier Energy Partners (STEP), released details of their new deal to lease 135,000 acres in Tioga County, NY with an eye to using LPG waterless fracking (press release below). It is an interesting deal—not at all typical of the usual leases between drillers and landowners. Perhaps it’s the way of the future in a low commodity gas price environment?

Here’s the low down: eCORP and STEP crafted a deal that makes landowners majority owners of shell companies that control the land. That is, the landowners will become “drillers,” or rather silent partners with the main driller, eCORP—but partners nonetheless, and they collectively will be majority partners, with eCORP a minority partner. eCORP and STEP are tying the knot and getting married—for this deal.

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Anti-Driller Campaign Against LPG Fracking Begins in NY

MDN crystal ballIt certainly didn’t taken long for anti-drillers to start talking down LPG (waterless) fracking. Just last week, a Tioga County, NY landowner group announced they will sign a lease with eCorp to allow drilling on 135,000 acres in New York using a proprietary technology by Canadian company GASFRAC (see this MDN story). The waterless technology uses liquefied petroleum gas (LPG), a gel-like substance that replaces water in fracking. Perhaps most importantly, by using LPG fracking, eCorp can move ahead with permitting and drilling now (in New York!), ahead of the release of new fracking regulations that have been stalled in a four-year review process.

MDN predicted that with almost all stated reasons to oppose water-based fracking now removed, anti-drillers would invent new reasons to oppose LPG fracking. MDN’s prediction has already come true. An article printed in the “news” section of the Albany Times Union, which clearly is an opinion piece, says this:

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