Barnesville Hiring Outside Counsel in Lawsuit Against Gulfport Energy

April 6, 2015
By CASEY JUNKINS , Shale Play

BARNESVILLE - Even if village officials successfully debunk Gulfport Energy's claim of holding specific rights for drawing water from the Slope Creek Reservoir for nearby fracking, the litigation will likely soak Barnesville taxpayers.

Barnesville Village Solicitor Marlin Harper said officials will need to hire outside counsel to defend themselves against Gulfport in U.S. District Court for the Southern District of Ohio. The Oklahoma City-based fracker filed the suit last month, citing a potential loss of "millions of dollars" if it does not receive assurances that it can draw water from the reservoir, which is about 5 miles outside the village.

"It could be a substantial expense. The bigger city law firms charge hundreds of dollars per hour," Harper said, noting he believes the village of 4,100 residents needs a law firm accustomed to handling federal litigation.

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"We never thought we would be sued in federal court by a large corporation."

Columbus-based Gulfport attorney O. Judson Scheaf cites an Aug. 17, 2012 agreement Barnesville officials signed that allows the fracker to by water from the reservoir for $10 per 1,000 gallons. The contract shows the firm would be able to draw the water until a point when the village would determine such action would endanger "health and safety of area residents and businesses."

"Barnesville has frustrated Gulfport's right to develop minerals under the mineral rights agreement by refusing to provide Gulfport with water in violation of Gulfport's water rights," Scheaf states in his complaint.

Harper said the contract to sell Gulfport water made no supply agreements with the company to provide a certain amount of water at any specific time, adding, "We made it clear to everyone we were selling to multiple companies."

In September 2012, just one month after village leaders signed the Gulfport water deal, they entered a drilling contract with Denver-based Antero Resources to pay $5,700 per acre along with production royalties of 20 percent once gas starts flowing. Then, in May 2013, Barnesville officials signed an agreement to sell a non-specific amount of fracking water to Antero from the same reservoir for $3.75 per 1,000 gallons.

As the lawsuit proceeds, the western Belmont County town and its surrounding areas are flush with fracking-related activity.

"You hear about the price of oil going down and people getting laid off. They are going full bore here," Jim Bygrave, owner of The Raven Pickers antique shop, said. "Water trucks, brine trucks and sand trucks are going past my house 24/7."

Bygrave enjoys fishing for bluegill and bass in the reservoir, while he said other residents often go there to simply "chill out" in the summer.

"If it is the drinking water, they should stop at a certain point," he said of the reservoir that provides water to thousands of Barnesville area residents. "Still, a contract is a contract."

Brian Mayhugh, co-owner of the Barnesville Antique Mall, said he didn't know enough about the lawsuit to comment on it, but he believes the industry has been good for the community.

"It's made a positive impact, financially, for a lot of people, for sure," he said.

 
 

 

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