Lawsuit: Chesapeake Appalachia won't relinquish gas rights

WHEELING – Chesapeake Appalachia is being sued after 16 people, a family trust and the Ranch Sportsman’s Club claim it has unlawfully held over their gas and oil rights.

Statoil USA Onshore Properties, Inc., was also named as a defendant in the suit.

Between Aug. 11, 2006, and Sept. 18, 2007, Larry J. Bissett and Judy L. Bissett; John W. Johnston and Mary Ann Johnston; Curtis M. Lemley; Dorothy Phillips; William Dailey; Vincent W. & Barbara J. Heider Family Irrevocable Trust Dated June 28, 2006; Joyce L. Heider and Vincent W. Heider Jr.; Richard E. Powell and Dorothy L. Powell; Charles DeLong and Barbara G. DeLong; Daniel C. Tassey and Linda M. Tassey; the Ranch Sportsman’s Club, Inc.; and Nick Mustachio signed oil and gas leases with Great Lakes Energy Partners, purportedly leasing their oil and gas interests to their property, according to a complaint filed Feb. 14 in the U.S. District Court for the Northern District of West Virginia at Wheeling.

The plaintiffs claim Great Lakes, which is now known as Range Resources-Appalachia, LLC, assigned its rights under the leases to Chesapeake and Statoil.

Prior to the expiration of the primary terms of the leases, the defendants filed Notices of Extension of Oil and Gas Lease in Hancock and Brooke County Clerks’ Offices, and each notice states that the purpose was to give public notice that the leases had been extended for an additional five years, according to the suit.

The plaintiffs claim Chesapeake tendered checks as bonus payments for the extension of the lease in an amount that was equal to the up-front bonus money paid at the time of signing the leases five years prior, but, the amounts were not agreed to as required by the terms of the leases and the plaintiffs did not cash the checks.

At the time the notices were filed, oil and gas drilling operations did not begin on the plaintiffs’ properties; the search for oil, gas and/or coalbed methane gas did not begin; and there was no other compliance with the conditions of the leases to extend the primary terms, according to the suit.

The plaintiffs claim in the absence of production or exploration of oil or gas, the termination of the leases occurs automatically upon the expirations of the primary terms, without the necessity of any action by either party to the leases.

The leases expired and there are no leases for oil or gas rights on the plaintiffs’ properties since the defendants’ actions in attempting to extend or renew the leases beyond the primary terms do not comply with any of the conditions set forth in the habendum clauses of the leases, according to the suit.

The plaintiffs claim since the leases expired, the possession of their lease rights by the defendants constitutes an unlawful holding-over, which has caused them damages.

The defendants’ actions represent willful and intentional conduct depriving them of the opportunity to lease their oil and gas rights in a fair arms-length transaction and have adversely affected the title of their properties, according to the suit.

The plaintiffs are seeking compensatory damages. They are being represented by Daniel J. Guida of Guida Law Offices; Eric Gordon of Berry, Kessler, Crutchfield, Taylor & Gordon; and Jonathan E. Turak of Gold, Khourey & Turak.

U.S. District Court for the Northern District of West Virginia at Wheeling case number: 5:13-cv-20