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Landowners win ruling in dispute over seismic tests
lisbon
A Columbiana County judge ruled in favor of four landowners Friday in their dispute with a company hired to conduct seismic testing on land with oil and gas leases owned by Chesapeake Exploration LLC.
Judge C. Ashley Pike of common-pleas court ruled against a preliminary injunction that would force landowners to allow TGS-NOPEC Geophysical Co. on their property. Arguments in the case were made Wednesday.
Named as defendants are James and Janet Zimmerman of Salem; Phillip and Brenda Glasser, Homeworth; Gary and Eleanor Carter, Beloit; Larry W. Fryfogle, Beloit; and Golden H. Acres LLC, Salem.
The judge determined that Chesapeake is an “indispensable and necessary” party to any litigation moving forward that would grant rights to TGS to enter properties were it the leaseholder.
“The court finds that any right TGS may have to enter on the premises of the various defendants is a right derived from Chesapeake’s rights under its leases. There is no privity between the defendants and TGS,” Judge Pike wrote in his order.
Wayne Millice, vice president of Onshore Multi-client Seismic for TGS, testified Wednesday that any delay in starting the process of seismic testing, which takes place in three stages over several months, could cost the company as much as $30,000 per day. Also, any properties that are not included in the testing reduce the value of the data.
Judge Pike determined potential damages could not be determined without the contract between TGS and Chesapeake being presented to the court.
The property owners also could have their property damaged if TGS was allowed onto the property through a temporary injunction, according to the judge’s ruling.
“The Carters are very pleased with the judge’s decision,” said Scott Zurakowski, a Canton attorney who represents defendants Gary and Eleanor Carter.
It now will be up to TGS whether it wants to try to bring Chesapeake into this case as a party, he said.
Chesapeake is paying TGS $75,000 per square mile to conduct seismic testing on land it has oil and gas leases for in western Columbiana County and part of Carroll County, but it costs TGS $85,000 to $95,500 per square mile to conduct the tests, Millice said.
Zurakowski said he does not expect Friday’s decision to be the end of this case.
Ohio does not have the case law in these types of disputes involving oil and gas leases. There will have to be cases that advance to appeals and possibly the Ohio Supreme Court, he said.
Kenneth Bandy, attorney for Fryfogle; Bruce Smith, the Alliance attorney representing TGS; and Frederick S. Coombs III, a Youngstown attorney representing the Zimmermans and Golden H. Acres LLC, did not respond to attempts for comment about the decision.