BARNESVILLE, Ohio — Curtis R. Hallstrom and Susan M. Hallstrom, of Barnesville, have filed a $2.5 million lawsuit against the Oxford Oil Company in Zanesville, Ohio.
The Hallstroms own approximately 150 acres in Belmont County.
Lease tied up
The couple signed an oil and gas lease with Oxford Oil Company in July 2006. The lease signed was for a primary term of five years.
The Oxford Oil Company claims to have applied for a permit to drill on the property covered by the Hallstrom lease in December 2010, but has been prevented from proceeding because of a coal company’s actions.
According to the lawsuit, the Oxford Oil Company claims that the coal company, Murray Energy, is the reason it allegedly has not been approved to drill on the property.
In the lawsuit, the Hallstroms claim Oxford Oil Company should have known the couple did not own the coal under the property. The lawsuit claims there were public records detailing who owned the coal at the time of the lease signing.
The Hallstroms claim that it was foreseeable by law that the coal ownership and permit could be the reason Oxford Oil Company’s permit would be denied.
Oxford Oil Company did not produce any oil or gas, drill any wells and there have been no drilling operations on the property. The lease expired in July 2011.
The Hallstroms claim the Oxford Oil Company failed to pay delay rentals for more than one year.
Force majeure
The lawsuit also states that on July 5, 2011, one day before the expiration of the Hallstrom lease, the Oxford Oil Company filed an “affidavit of facts relating to title” in the Belmont County recorder’s office, alleging the Hallstrom lease should continue under the condition of force majeure.
The document filed, which is included in the lawsuit, does not give any specific reason for the lease to continue under force majeure.
The Oxford Oil 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.
Market value
The Hallstroms are suing for losses suffered because they are not able to lease their oil and gas rights for market value with the Oxford Oil Company lease still being held in force majeure.
The Hallstroms claim Antero Resources is paying $5,700 plus a 20 percent royalty within a three-mile radius of their property. They are seeking three times the bonus payment per acre of their property from Oxford Oil Company.
The couple is also seeking an injunction against the Oxford Oil Company to stop it from trying to use the property for any reason, including pipelines, tanks or other structures.
A court date has not been set in this case.
Other cases
This is not the first lawsuit filed against the Oxford Oil Company for attempting to keep leases in effect using the force majeure clause.
There were two lawsuits filed in June by a total of 17 landowners making similar claims using force majeure.
In November, another Belmont County landowner filed a similar lawsuit against the Oxford Oil Company.
This brings the total number of acres being involved in Oxford Oil Co. leases being continued under force majeure to 1,327 acres, according to a tally by the Farm and Dairy.
Messages left at Oxford Oil Company seeking comment, and with the company’s attorney, Bill Taylor, were not returned.
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