Drillers snapping up rights leases in Ohio

Monday September 26, 2011 5:02 AM, The Columbus Dispatch, Spencer Hunt

Gas, oil companies scramble in race to extract fuel from state’s shale

CADIZ, Ohio — The Harrison County recorder’s office here used to be a quiet spot to research deeds, leases and other property documents that date to 1813.

Now, dozens of people clog the office every day and set up camp in the courthouse hallways to comb through documents that show who owns property in the eastern Ohio county.

These men and women work for competing energy companies that are racing to secure drilling rights to the oil and gas in Ohio’s Utica and Marcellus shale.

“I’m told that, even back in the coal days of the 1950s and 1960s, it was never as busy as this,” said Tracy Boyer, county recorder since 1993.

While state regulators, industry officials and environmental advocates debate the benefits and pitfalls of horizontal shale-gas drilling and hydraulic fracturing, or “fracking,” the work to create Ohio’s shale-gas boom is going on in county offices across the state.

And it’s happening on doorsteps and at kitchen tables in rural houses, where landowners are entertaining lease offers from gas-company representatives.

Rumors of rich payouts creating overnight millionaires are rampant. Some of them are even true.

And while many landowners are weighing their options, others are learning that they don’t have any. Decades-old leases may still apply today, even if the current property owners didn’t sign them.

Hundreds of landowners in Holmes, Wayne and Ashland counties, for example, discovered that Columbia Gas had subleased more than 40,200 acres of mineral rights to two drilling companies in January 2009.

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J. Richard Emens, a Columbus-based oil and gas lawyer hired by the Mohican group to investigate the gas-storage matter, said he is eager to work out a deal for his clients.

“They don’t believe this (lease) is fair,” Emens said. “Let’s just say the landowners group is looking forward to having more-meaningful discussions.”

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Emens and other oil and gas experts said landowners need to take their time before signing leases.

He said he has identified a number of provisions that keep leases from expiring, even if there is no drilling within five years.

Other provisions, he said, could give drilling companies free access to water on the land or allow them to build pipelines and other equipment on land even if they don’t drill a well.

“Just because they are told this is a standard lease and they should sign it as is, that should not persuade landowners to give up their negotiation rights,” Emens said.

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