By Bob Downing | Beacon Journal staff writer
Published: January 11, 2014 – 10:42 PM
SUFFIELD TWP.:
Steve Neeley did not want to get involved in Utica shale drilling.
He had invested heavily in building a country estate on 9½ acres off Pontius Road in the southwest corner of Portage County. He was concerned about hydraulic fracturing, or fracking, and wanted nothing to do with it.
The 57-year-old Neeley was repeatedly approached by Chesapeake Exploration LLC, part of Chesapeake Energy Corp., to lease his land. The company offered a signing bonus of $1,200 per acre plus 12½ percent royalty of natural gas and liquids from the well. He repeatedly refused.
Then, in late 2011, Neeley and 23 neighbors who also had rejected the company’s lease offers were forced to take part in Utica shale drilling under a little-known and seldom-used provision of Ohio law called “unitization.”
With approval from the Ohio Department of Natural Resources, Chesapeake was allowed to include 24 unwilling landowners in the large drilling unit — an area of land under which the company can extract resources — even though the owners had not signed leases granting rights to the minerals below.
By establishing what is called a unit operation, Chesapeake was allowed to drill horizontally through the shale thousands of feet beneath their properties and maximize profits from natural gas and liquids. The unwilling participants receive payments after wells go into production, but the rate is not negotiated in the way it is with others.
The Suffield unitization case was the first to be sought and approved in Ohio in recent decades, but more are being filed as drilling intensifies.