Judge rules WR Port Authority owns mineral rights at airport

By Ed Runyan

runyan@vindy.com

WARREN

A Trumbull County judge has ruled in favor of the Western Reserve Port Authority in its January 2013 lawsuit seeking to clarify its ownership of the mineral rights in the Utica Shale formation below the 1,500 acres the authority owns at the Youngstown-Warren Regional Airport.

The decision could make it possible for the port authority to strike a deal to lease the land for gas and oil exploration and provide the authority with an economic windfall.

But first the authority needs a determination of whether the ruling is intended as final and appealable and whether the defendants in the case will appeal, said Dan Keating, legal adviser to the authority.

Atty. Michael Snyder, who represents Range Resources Appalachia LLC, the primary defendant in the case, said by phone Thursday his client is still “considering options at this time, and no decision has been made” regarding an appeal.

At the time the suit was filed, BP America and other companies were just starting to drill into the Utica Shale and had not yet learned whether the drilling would be lucrative. BP had paid thousands of Trumbull County property owners a $3,900-per-acre signing bonus and offered royalties of 17.5 percent on minerals mined from their property.

The results turned out to be less than hoped for, and BP later discontinued drilling operations in Trumbull County.

Keating acknowledged that the events of the past two years, including the drop in the oil price, have hurt the price the authority could expect to receive for its mineral rights, but “there is still value out there.”

Judge Ronald Rice of Trumbull County Common Pleas Court ruled March 3 that the port authority had the right to exercise its “unilateral right to terminate the lease” with Range Resources for the portions of leased land that have not been developed for Utica exploration.

Keating said the mineral rights leases signed in 1977 by Youngstown officials when the airport was owned by the city allowed the airport’s owner to reclaim its mineral rights in the Utica Shale if Range Resources did not develop them.

“There is no question Range has not developed any of the deep Utica-Point Pleasant formations on the airport property,” Judge Rice’s ruling says. “The wells currently in production on the airport property are from the Clinton Sandstone formation only.”

Two companies still operate Clinton wells on airport land — Annarock Petroleum has seven wells and Oxford Oil Co. has two. They were dismissed from the suit and do not claim ownership of the Utica-Shale rights, as Range Resources did, Keating said.

Atty. James Blomstrom of Harrington, Hoppe & Mitchell Ltd. of Youngstown handled the case for the authority.

“We are pleased with the decision and hope to move forward with the development and exploration of oil and gas as soon as possible,” Keating said.