BETHESDA, Ohio — A Belmont County couple has filed a lawsuit seeking more than $2 million from Oxford Oil Company over an oil and gas lease signed in 2006.
Dale R. Russell and his wife, Loretta J. Russell, filed the lawsuit in September over an oil and gas lease on their 128-acre farm in Bethesda, Ohio. The signed lease covered a term of five years, which would have ended in June 2011.
No drilling or other action
No oil or gas has been produced, no wells have been drilled, and drilling operations have not been commenced on the property covered by the Russell lease, according to the landowners. Oxford Oil has not paid any delay rentals to the Russells for the past year.
On June 13, 2011, one day before the lease was set to expire, Oxford Oil Company filed a document with the county recorder’s office to continue the lease under the condition of force majeure.
Force majeure means that something in the marketplace prevented the company from being able to fulfill the conditions of the lease.
Oxford has not released the lease on the property.
The Russells’ attorney, Todd M. Kildow, of the law firm, Phillips, Gardill, Kaiser and Altmeyer, states in the lawsuit that it is Oxford’s actions that stopped the permitting process and that force majeure had nothing to do with it.
Background
According to court documents, when the land was leased, Murray Energy had a previous lease on the coal under the Russells’ land. Oxford contends the permit granted to Murray Energy is the reason a well has not been drilled on the Russell farm.
The Russells claim Oxford Oil Company had the opportunity to deal with Murray Energy and the coal permit issue prior to entering into their lease, but chose not to, which was totally in the control of Oxford.
Seeking $2 million
The Russells are suing for $2,188,800 or $17,100 an acre, which they state would have been three times the amount they could have gotten as a bonus payment for the oil and gas rights if the lease had ended as it should have in 2011.
The other side
Oxford Oil Company attorney, William Taylor in Zanesville, Ohio, said the company plans to keep the lease in force as long as force majeure allows them. He added that a well has not been placed on the property due to the coal mining in the area.
He said Oxford Oil Company cannot find a site suitable on the land that is also agreeable to the coal company.
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