Hearings to address lease agreements and seismic testing
By Burton Speakman
A company tasked with seismic testing for Chesapeake Exploration LLC on Columbiana County land contends five landowners illegally have kept the company off their properties.
Preliminary-injunction hearings for all the defendants are scheduled for today in Columbiana County Common Pleas Court.
TSG NOPEC Geophysical Co. has filed suit against James and Janet Zimmerman of Salem; Phillip and Brenda Glasser, Homeworth; Gary and Eleanor Carter, Beloit; Larry W. Fryfogle, Beloit; and Golden H. Acres LLC, Salem.
The company alleges that despite oil and gas lease agreements with those properties, the owners refused to sign a permit that would allow TSG to come onto their land to conduct seismic testing, according to court records.
TSG was hired by Chesapeake to conduct the tests.
TSG alleged it was denied access to the properties several times. The company states access to the land is critical to the testing procedure, and that by denying access, the property owners violated the terms of their lease agreements.
All properties in question are located either south or southeast of Salem.
Three of the five leases involved in this case are older leases that provided small payments of $1 to the landowner and then provided 1/8 of total production in royalty costs and a certain amount of free gas per month.
These were pretty standard leases for that time, said Scott Zurakowski, a Canton attorney who represents Gary and Eleanor Carter.
“These older leases didn’t include the right to do seismic testing,” Zurakowksi said.
The key to this case is whether the contract implies the right to do seismic testing, he added.
Other courts have decided that if the contract includes the right to exploration, then it has an implied right for seismic testing, Zurakowski said. The older three contracts do not include references to exploration.
“This case is important in Ohio because the Ohio Supreme Court has not made any decisions on this kind of case,” he said.
The case will have an impact on hundreds and thousands of landowners with similar oil and gas leases throughout Ohio, Zurakowski said.
Frederick S. Coombs III, a Youngstown attorney representing James Zimmerman and Golden H. Acres LLC, said in an email that his clients’ leases were radically different from the others in the TSG case.
They were negotiated in fall 2011 to build in protections for the landowners, he wrote.
Seismic testing helps to determine the potential oil and gas reserves on a property. The testing helps to maximize production and decrease potential impact on the land, according to the complaint filed by TSG.
Bruce Smith, the attorney representing TSG, was not available to comment.
Link to Original Article: http://www.vindy.com/news/2012/apr/18/seismic-testing-company-sues-property-ow/