ST. CLAIRSVILLE, Ohio — A group of Belmont County landowners claim Oxford Oil Company may be over-stretching a clause in their gas leases to extend the term of the leases without production, according to a lawsuit filed in Belmont County.
Fourteen Belmont County landowners have filed a lawsuit against Oxford Oil Company in Zanesville that is using a force majeure clause in a 2006 oil and gas lease to keep the leases in effect.
The leases have expired, but the landowners cannot sign another lease because Oxford Oil Company, the company that signed them in 2006, won’t let the leases expire and says the leases are held by a force majeure clause.
The company claims the clause basically lets the lease be extended because the oil and gas company was prohibited from drilling because of a coal company’s actions.
According to uslegal.com force majeure is a term that generally refers to an unavoidable force or power that affects someone’s ability to do something. It’s typically included in contracts to remove liability for natural or other events that prevent participants from fulfilling obligations. The term can also apply if government somehow interferes or stops Oxford Oil Company from production.
Jesse T. and Rane K. Beamer; Kenneth L. and Mary Jean Hennebert; Dave E. and Susan M. Hines; Kenneth E. and Linda K. Hines; Thomas J. and Tammy K. Jefferis; Charles D. Leach; Edison W. Lucas, Neal Jenewein and Dorothy Ragan; Hillis Jenewein, Donald Riser; Joseph M. Losko Sr., Joann Losko, Joseph M. Losko Jr. and Mark D. Losko are listed as plaintiffs filing the lawsuit.
All of the plaintiffs signed five-year oil and gas leases on the properties they own in Belmont County in late 2006 or early 2007.
Each landowner received a letter between one and three days before the lease was set to expire, alerting them that the oil and gas lease they had signed would continue under the condition of force majeure, because of a situation involving coal rights beneath the properties.
According to the lawsuit, the landowners state when they signed the leases, Murray Energy and its subsidiaries were owners of the coal and the coal mining rights in and under the properties covered by the leases.
Lease length. The leases were all for five years. However, no oil or gas was produced, no wells were drilled and drilling operations did not begin.
However, when the landowners received the letter stating the property would be held under force majeure, they were told the Ohio Department of Natural Resources would not issue a drilling permit. Oxford contends in the letter sent to the landowners that Murray Energy objected to drilling because they still owned the coal beneath the surface and they have to remove it before any drilling can commence.
The landowners stated that Murray Energy’s ownership of the coal rights were of public record at the time the leases were signed, therefore Oxford Oil should have known that Murray could mine for the coal at any time.
On another count in the lawsuit, Thomas J. Jefferis Jr. and Tammy K. Jefferis filed suit because their lease was behind extended as well, except for a different reason.
Oxford Oil Company is claiming force majeure and holding their lease without a bonus payment or canceling the lease.
The company is trying to use force majeure because they feel a governmental agency is stopping them.
In order for Oxford to reach a proposed well site, the company would have had to build a road off of Bailey Road to reach the well site.
Jefferis’ sought to enforce pre-existing ODNR regulations that would require Oxford to build a silt fence before constructing the road. According to the lawsuit, Oxford refused to adhere to those regulations.
Instead, Oxford Oil Company attempted to use a road owned by the city of Barnesville in place of constructing the silt fence. However, Barnesville reportedly required Oxford to pay a bond for the use and potential damage to the Barnesville road, which Oxford refused to do, according to the lawsuit.
Now, Oxford is claiming that ODNR and the city of Barnesville stopped them from moving forward with the drilling site by not allowing them to construct the road they wanted to use and by requiring a road bond.
The plaintiffs are seeking compensatory damages for slander of title, attorney fees and punitive damages.
In addition, the plaintiffs are seeking a preliminary and permanent injunction against Oxford Oil to take any gas or oil from their property.
Farm and Dairy contacted Atty. Bill Taylor, who represents Oxford Oil Company, but he had no comment.