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Judge:?Gas lease still valid

April 20, 2012

LISBON - A ruling that oil and gas leases on the Conny Farms Ltd. property remain valid was made Wednesday by Judge C. Ashley Pike in Columbiana County Common Pleas Court.

Conny Farms of Buck Road, Beloit, had filed the lawsuit in 2008 claiming the oil and gas leases on that property should be declared null and void. Additionally, the lawsuit sought to stop any drilling, claiming the companies failed to make any recent payments for the leases.

Court documents said the amount to be paid for the leases was at least $222 annually, but no payments had been made since the Conny's took ownership of the property in 2005.

The lawsuit was filed against Ball Resources Inc., Bass Energy Inc., Chowder Gas Storage Facility LLC, William E. Blair, Richard W. Petticrew, Jeffrey B. Petticrew, C. Richard Petticrew and Five Star LLC.

One issue of the case went to the Seventh District Court of Appeals, which found the ascertainment clauses to be invalid as against public policy. Judicial ascertainment clauses are clauses in some oil and gas lease contracts which state the lease is not to be terminated, canceled or forfeited for failure of the lessee to perform implied obligations until the failure is determined in a court of law.

Chowder had requested Pike rule the leases are still valid. In his ruling Pike stated gas continues to be stored on the property and it was the Conny Farms which failed to send notification to the defendants when they took ownership of the property, which led to the failure of the gas companies to pay the annual rate. The same ruling dismisses any and all further proceedings in the three-year-old case.



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