Court Says Landowners Can Terminate Gas Leases

11/15/2012 (Updated 6:48:22 PM)

A win for dozens, and potentially hundreds, of local landowners in their battle with gas companies over leases.

This afternoon a Judge ruled that Chesapeake Energy and Stat Oil Hydro could no longer extend leases for a group of landowners using a clause in the lease called force majeure.

Chesapeake had claimed New York's ongoing moratorium against fracking was a circumstance that allowed the gas company to keep leases in effect past their original expiration date. Some of these leases were over 10 years old and leased land for as little as $3 an acre. Attorneys for the landowners say the ruling could set a precedent that effects most leases in New York State.

"Immediately the named plaintiffs, there are 55 named plaintiffs in the lawsuit. This serves as precedent to all of our other clients, of which there's probably another 180 or so and to any other landowner out there that is burdened by one of these leases," said Cindy Manchester of Levene, Gouldin, & Thompson.
 
In the ruling U.S District Judge David Hurd wrote that the defendants Chesapeake Energy and Stat Oil Hydro, "did not contract for guaranteed production of oil and gas; they contracted for access, exploration, and the right to drill for a set period of time."