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Columbiana County Judge Rules for Landowners
LISBON, Ohio – A Columbiana County Common Pleas Court has denied a company's request for an order that would enable it to begin seismic testing on privately held land, declaring that it is attempting to "force its way" onto that property.
Judge Ashley C. Pike rejected Friday TGS-NOPEC Geophysical Co.'s motion for a preliminary injunction that would allow it to begin testing for potential oil and gas reserves on the land because the owner of the gas leases, in this case, Chesapeake Exploration LLC, is not a party in the complaint.
Pike ruled that the company is attempting to "force its way" onto the properties of the defendants by using the Chesapeake lease as justification. However, the court ruled that TGS didn't examine the leases, nor did they speak to property owners before they contracted their services with Chesapeake.
TGS-NOPEC sued four separate landholders in March because these property owners have refused to allow the company on their premises to conduct seismic testing, a process that is integral to determining whether or where an energy company could drill.
TGS-NOPEC then sells its data to Chesapeake so the company could determine where and when to drill.
All four landowners sold their mineral rights to energy giant Chesapeake, which is actively engaged in oil and gas exploration throughout the county. TGS-NOPEC claims they have the right to enter the property without the landowner's consent to conduct testing under the terms of the leases signed with Chesapeake.
The parties named in the complaints are James and Janet Zimmerman, Salem; Larry Fryfogle, Beloit; Golden H. Acres, LLC, Salem; and Gary and Eleanor Carter, Beloit.
However, Judge Pike agreed with defendants that TGS-NOPEC doesn't have the right to test on the property and that Chesapeake, because of a contract it has with the company, is an "indispensable and necessary party to this litigation."
Without Chesapeake as a party, the court concluded that it was unlikely TGS-NOPEC would win.
The court also determined that the landowners are considered third parties who could be harmed if a preliminary injunction was granted. And, this isn't a case in which property owners first gave permission and then revoked it, the court ruled.
"We're not at all surprised, and we're waiting to see what TGO does next," said Scott Zurakowski, an attorney for the Carters. "The way I read the decision, it appears that TGS put itself in this position, and TGS didn’t do its due diligence."
The decision leaves open the question of the individual leases, which the ruling notes "are issues for another day if these cases are pursued."
Zurakowski expects that this is the opening salvo of what he sees as a prolonged court battle. "This certainly isn't the end of it. This is round one and I predict we'll all be back in court very shortly, I hope the next time getting to the heart of the matter."
Carter expresses that he's "elated" about the decision, and that he's confident that he'd win should TGS appeal. "They are totally outside the bounds of the lease," he said.
His is a mineral lease that was first signed in 1950 by his parents, and Chesapeake purchased that lease from another entity, not Carter. "They have no right to be here. Period," Carter said of TGO. "There is no language in the lease that allows them to do seismic bombing on my property whatsoever, even though they want to take that right by assumption," he said. "They assumed they had the right, but they don't."
Carter owns 92.5 acres on his farm in Beloit. "All of us landowners are very happy of the court's decision."
Copyright 2012 The Business Journal, Youngstown, Ohio.