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Judge restricts drilling lease

August 18, 2012
By DEANNE JOHNSON - Staff Writer ( , Morning Journal News

LISBON - Columbiana County Common Pleas Court Judge Scott Washam determined part of the Summitcrest property in Summitville should no longer be included in an oil and gas lease agreement from 2004.

In a ruling issued this week, Washam stated Summitcrest retains the oil and gas rights to any portion of the property outside of the area affected by the single oil well drilled on the property after the 2004 lease agreement. According to court documents, the area affected by the well was 40 acres, although in April 2009 a renewal by Eric Petroleum sought to increase the acreage affected by the well from 40 acres to 640 acres.

The lease agreement has had several leasors in the past eight years. Originally leased by Mason Dixon Energy, Inc. the lease has been reassigned several times, including to Eric Petroleum, and is now held by Chesapeake Energy.

The lawsuit was filed in October 2011 after Chesapeake notified Summitcrest of its intentions to drill a new oil and gas well on 10 acres of its property. A permit was granted to drill, but then withdrawn. The company filed another request for a permit after that.

The Summitcrest property belongs to the Johnson family of Summitville, which also owns the Summitville Tiles Co. A lake on the property belonging to the local company is being used to provide water to Chesapeake for the fracturing process.

While he granted Summitcrest control of the oil and gas lease rights on parts of the property, Washam denied a request by Chesapeake. Citing a recent decision by the 7th District Court of Appeals which determined judicial ascertainment clauses are unenforceable, Washam denied the request for him to make a determination as to whether or not the lease has been terminated at this time.

The case remains set for a court trial in October.



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