Page 2 ■ Thursday, February 16, 2012


BAKKEN NEWS


Energy company pulling back Chesapeake analyzing well results, says it won’t honor lease agreements


By LAUREN DONOVAN Bismarck Tribune


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Brian Kroshus Editor


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ing back to analyze results from six con- fi dential oil wells in southwestern North Dakota, it also is sending notices to min- eral owners in Hettinger and Stark coun- ties that it won’t honor lease agreements signed months ago. The company is being closely watched


because it’s one of few probing the far southwestern edges of the Bakken-Three Forks shale formations and a crucial bellwether for whether real development will move into the area. Amid rumors that it was pulling its


Chesapeake Energy is not only pull-


Peterson said all the leases are with Chesapeake Energy or its entities. He said the leases are for between $450 and $700 an acre. He said the situation is unique and


covers a fair amount of acreage. “I’ve not seen any of the other major


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two rigs out of North Dakota, a Chesa- peake spokesman said it’s studying re- sults from the wells before deciding how to proceed. It has permits to drill another 12 wells, including one it obtained two weeks ago for a site in northern Het- tinger County. Attorneys for mineral owners in Het- tinger and Stark counties said they’ve re- cently been contacted by clients who have had lease agreements returned by Chesa- peake, saying the company doesn’t plan to honor the contract and is releasing the lease, or the clients are holding signed leases that are delinquent past when the company agreed to pay bonuses. Regent attorney Jim Gion said he has 15 or so clients with mineral acres in Het- tinger and southern Stark counties who have been contacted in that manner. He said he has one case where some members of one family were paid for leases while another received the release letter.


Lynn Helms said anyone who’s offered a lease should have it evaluated by an at- torney. He said lease problems “would not be atypical for Chesapeake” which has had similar problems in other states where it does business. Chesapeake spokeswoman Kelsey Campbell said the company doesn’t talk about its leases. “Leasing issues are com- plex legal matters which cannot be dis- cussed in general, one-size-fi ts-all terms … and in most instances are private con- tracts with leaseholders,” she said. Helms said he anticipated an un-


State Mineral Resources Director


companies do this. This is unusual to take the lease and refuse to honor it,” he said.


ramping up. He said oil companies went through a similar exploration in the Bakken back in 2004-06 and so did a company drill- ing the Spearfi sh formation in Bottineau County, where another company is fi nd- ing good success. Helms said he can’t comment on any


said. Ron Ness, director of the North Da-


results from wells on the edges of the play. Wells drilled in that area by Chesa- peake, SM Energy and Fidelity are all still on confi dential status, he said. “This will shake itself out in time,” he


kota Petroleum Council, said he thinks news that Chesapeake is pulling its rigs means otherwise. “I think we’re begin- ning to see the edges of the Bakken. It’s being defi ned pretty clearly,” he said. As to the potential for future drilling


even start to development in that fringe area, with a two- to three-year period of exploratory drilling before any major


in that region, in either the Three Forks or the Tyler formation, Ness said, “Rigs don’t lie. When you see them, they’re looking where they believe the oil is.” (Reach reporter Lauren Donovan at 701-220-5511 or lauren@westriv.com.)


ND group opposing oil taxes for outdoors North Dakota’s Farm Bureau said it will fi ght a proposed initiative that would


require spending oil tax money on wildlife and conservation projects. The measure would give an appointed nine-member control over almost $90 million a year. The board would get 5 percent of the state’s oil tax collections. Farm Bureau President Doyle Johannes said it’s too much money to set aside


Dickinson attorney Charles Peterson said he has seven or eight clients, primar- ily with minerals in Hettinger County, who have either had leases returned, or lease bonuses that are delinquent.


for wildlife and conservation programs. He said those efforts already get a lot of state and federal support. Johannes said the measure would take money away from education and


property tax relief. Ducks Unlimited regional director Steve Adair, the campaign’s chairman,


said it would provide farmers voluntary incentives for land conservation. — Associated Press


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