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Landowner Sues Over Unpermitted Drilling

June 24, 2013
By TYLER REYNARD - Staff Writer , The Intelligencer / Wheeling News-Register

WHEELING - A group of energy companies allegedly ignored objections from James Kozik and continued to collect revenue from unpermitted drilling on his property in Triadelphia, states a lawsuit filed last week in Ohio County Circuit Court.

Chesapeake Appalachia, Statoil ASA, Jamestown Resources, Redsky-West Virginia and Redsky employee Donald Schreckengost are named as defendants in the suit, filed by Kozik's attorney, Gail Kahle.

According to the suit, the companies entered lease agreements during the first half of 2011 with owners of several properties surrounding Kozik's. Kozik had reached out to the energy companies that same year but was unable to negotiate a lease for his 1.127-acre parcel. Chesapeake and Redsky orally agreed to pay Kozik a signing bonus of $4,500 per acre and an 18 percent royalty, "but later balked," the suit states.

In May 2011, the defendants recorded the properties surrounding Kozik's as a pooled unit, designated the "Roy Ferrell North Unit" with the Ohio County Assessor's Office.

After learning of the pooled unit in October of that year, Kozik examined the records at the assessor's office.

He discovered that his parcel was incorrectly identified as belonging to another landowner and was included among the properties leased as a part of the Roy Ferrell North Unit.

Kozik spent the next two weeks leaving detailed messages about the misrepresentation on the voice mailboxes of Chesapeake employees; those messages went unreturned.

He eventually was able to reach a live Chesapeake employee and was told land men in Ohio County would be informed about the situation.

By May 2012, Kozik had not heard from Chesapeake. He returned to the assessor's office and saw that nothing had changed and his property was still incorrectly listed as being leased from another landowner as a part of the Roy Ferrell North Unit, according to the lawsuit.

Shortly after, Kozik spoke with Schreckengost, the Redsky employee, who offered Kozik a "low-ball lease offer" to settle the dispute. Even though Kozik reminded him the well had already been drilled, Schreckengost said the offer was "take it or leave it," Kozik claims.

The landholders in the Roy Ferrell North Unit were receiving royalties by January of this year, including those that were incorrectly listed as owning Kozik's property. Nearby landowners were being paid for resources that were being taken from Kozik's parcel, the suit alleges.

An employee at Chesapeake's Oklahoma headquarters, as well as Schreckengost, again told Kozik that his parcel was not a part of any pooled unit, his property would not be drilled and he would not receive any royalties.

"The Defendants have conspired with one another to ... deprive from Plaintiff his property, without the benefit of due process of law," the suit states.

Kozik is seeking unnamed punitive damages for the value of the natural resources and the diminishment of the property value, as well as attorney's fees. He is demanding a jury trial in front of 1st Circuit Judge Ronald Wilson.

The defendants have 30 days from June 17, the filing date, to respond.

 
 

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