Hancock, Brooke County residents file suit over oil lease - WOWK 13 Charleston, Huntington WV News, Weather, Sports

Hancock, Brooke County residents file suit over oil and gas lease

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A group of Hancock and Brooke County families have filed a federal lawsuit against Chesapeake Appalachia and Statoil USA Onshore Properties Inc, alleging the companies did not negotiate an extension of oil and gas leases and "improperly sought to extend" the leases under the terms of the original lease.

The case was filed in U.S. District Court for the Northern District of West Virginia in Wheeling.

Plaintiffs are listed as Larry J. Bissett, Judy L. Bissett, John W. Johnston, Mary Ann Johnston, Curtis M. Lemley, Dorothy Phillips, William Dailey, Vincent W Heider and Barbara J. Heider, Joyce L. Heider, Vincent W. Heider, Jr., Richard E. Powell, Dorothy L. Powell, Charles DeLong, Barbara G. DeLong, Daniel C. Tassey, Linda M. Tassey, the Ranch Sportsman's Club and Nick Mustachio.

Plaintiffs say they signed the oil and gas lease with Great Lakes Energy Partners, now known as  Range Resources Appalachia, to lease oil and gas interests on their properties.

The suit states Range assigned rights under those leases to Chesapeake and Statoil.

Residents say the habendum clause in the oil and gas lease were for "primary terms of five years and so much longer thereafter as oil, gas and or coalbed methane gas or their constituents are produced or are capable of being produced on the premises in paying quantities in the judgment of the lessee or as the premises shall be operated by the lessee in search for oil, gas and or coalbed methane gas."

That clause, the lawsuit says, sets forth that the primary terms are extended to a second term only if oil, gas and coalbed methane are produced or "capable of being produced."

"These conditions are the sole methods provided in the subject leases to extend the primary terms before the expire," the suit alleges.

Residents allege Chesapeake and Statoil filed notices of extension of the leases with the purpose to "give public notice that the leases have been effectively extended for an additional five year primary term."

The suit continues to allege that after filing the notices of extension, Chesapeake gave the residents checks as bonus payments for the extension of the lease "in the amount that was equal to the up-front bonus money paid at the time of the signing of the subject leases five years prior thereto."

Residents say the amounts were not agreed in terms of the lease and they did not cash the checks.

The suit also alleges that when these notices of extension were filed, oil and gas drilling operations did not begin on their properties, as subject to the habendum clause.

Residents argue that since they didn't produce or explore oil and gas on the properties, the leases would be terminated automatically upon the expiration of the primary term.

Residents additionally argue that the leases are anti-top, which they say means the top lessee is put "next in line after the existing lease terminates."

"The goal is to tie-up the mineral interest owner's development rights before other competitors have a chance to get a lease," the suit states.

The suit further alleges that "any extensions or renewals by defendants of the subject leases exercised before the expiration of the subject leases were contrary to the express language since defendants' right to extend or renew the subject leases was conditional and dependent upon the expiration of said leases."

The plaintiffs say the leases expired and there is no lease for their properties. They argue the statute of frauds requires new leases.

Residents seek judgment jointly and severally for "all compensatory damages" including economic loss, slander of title, loss of use of their land, lost opportunity, lost profits, aggravation and inconvenience.

No response to the suit has been filed yet.