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Landowner Claims CHK Not Drawing Gas

August 6, 2012
By CASEY JUNKINS Staff Writer , The Intelligencer / Wheeling News-Register

BETHANY - When Scott Sonda signed a $25 per acre natural gas lease with a firm then known as Great Lakes Energy Partners in 2006, he had no idea how much the drilling market would change during the next six years.

The Brooke County mineral owner is suing the company that now holds his lease, Chesapeake Energy, because he does not believe the driller is drawing any gas from his land, which Chesapeake needs to do to hold Sonda's lease that was originally set to expire in May 2011.

"The only well started before the expiration was Ball 6H. This well travels south away from my property and never drains any gas from me. But yet they declared a unit containing 30 acres of mine, then later reduced it to two acres," he said.

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Photo by Casey Junkins
Chesapeake Energy continues expanding its northern West Virginia operations by building the Battle Run compressor station at the former Windmill Trucker station, near The Highlands.

In his complaint, Sonda accuses Chesapeake of acting in the "willful, wanton and reckless disregard" of his rights as a mineral owner.

"The main point is that they declared a pooled unit only to hold my lease. My lease specifically says that they must commence a well on the leased premises or on a spacing unit containing a portion of the leased premises before the expiration of the lease, " Sonda added of Chesapeake.

The complaint, originally filed in Brooke County Circuit Court but moved to U.S. District Court in Wheeling, shows that Sonda signed the lease with Great Lakes Energy Partners in May 2006. This company later became part of Range Resources. Range later assigned this and many other northern West Virginia leases to Chesapeake. The lease is now partially assigned to Jamestown Resources, the personal venture of Chesapeake Chief Executive Officer Aubrey McClendon.

According to the complaints, shortly before Sonda's lease was set to expire last year, Chesapeake included about 30 acres of Sonda's land into a pooled unit for the Larry Ball south unit, or the "Ball 6H" well. Sonda's lease is for 341.35 acres, so Chesapeake only planned to draw gas from less than 10 percent of the acreage he leased.

However, in November, Chesapeake filed an amendment to the Ball pooled unit that shows the company plans to only use 2.4 acres of Sonda's land in the unit. The less acreage a company uses for drilling will result is less royalty money for the mineral owners.

The complaint states that Sonda's land is more than 500 feet away from where Chesapeake is drilling the well. Because Chesapeake has not taken any gas from his land, according to Sonda, his lease should have expired.

"In light of this distance and direction of drilling, the defendant is not pooling gas from plaintiffs' property," the complaint states.

Chesapeake, however, disagrees. On behalf of Chesapeake, attorneys Kevin Abbott and Nicolle Snyder Bagnell said that matter should be decided by three arbitrators, citing the arbitration clause in Sonda's lease. The company wants "three disinterested arbitrators" to decide the matter, rather than a court of law.

"The plaintiffs are bound by the valid and enforceable agreement to arbitrate - not litigate - their claims, all of which arise out of or relate to the lease," Abbott and Bagnell state.

 
 

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