http://www.theithacajournal.com/article/20091124/NEWS01/911240350/N.Y.+penalizes+gas-drilling+firm
ITHACA JOURNAL
November 24, 2009
N.Y. penalizes gas-drilling firm
Fortuna accused of misleading, bullying landowners
By Tom Wilber
[email protected]
Fortuna Energy will relinquish acreage it unfairly claimed from more
than 300 Southern Tier property owners in the fight over the gas-rich
Marcellus Shale, according to the state attorney general's office.
While the settlement centers on practices of Fortuna, Attorney General
Andrew Cuomo characterized the industry's tactics to acquire drilling
acreage from property owners as misleading, bullying and deceptive.
"Many of these companies used their size and extensive resources to
manipulate individual property owners," he said Tuesday. "This land
grab must stop."
Fortuna, based in Elmira, agreed to pay the state $192,500 as part of
the settlement.
A prepared statement about the agreement from Fortuna President Jim
O'Driscoll put the legal action in a favorable light for the company,
presenting a marked contrast to Cuomo's criticism.
The settlement "will help clarify the oil and gas land leasing process
in New York," the statement read. "It has always been our intention to
act fairly, honestly and give leaseholders a choice to continue with
their existing lease, or extend their lease under terms that provided
them extended benefits with Fortuna."
Mark Scheuerman, director of legal and media affairs for Fortuna, had
no further comment.
The conflict involved 312 landowners, less than 2 percent of Fortuna's
approximately 20,000 landowners in the state, according to Fortuna.
They were spread throughout the Southern Tier, including Broome, Tioga,
Steuben and Chemung counties, according to information from Cuomo's
office.
The action resolved a dispute about who owned mineral rights to
property leased throughout the Southern Tier. The exact acreage was
unavailable, but it amounted to tens of thousands, according to Cuomo's
office.
Last spring, Fortuna began notifying property owners with leases set to
expire they were obliged to extend them because the state was not
issuing permits related to Marcellus development. The claim was in
reference to a regulatory overhaul by the state that has effectively
stalled Marcellus development until environmental issues are resolved.
If landowners did not agree to the extension, the company would put a
lien against the property that would prevent landowners from
negotiating with other companies.Those tactics got the attention of
Cuomo, who added he is investigating other companies suspected of using
similar tactics.
Representatives of the New York State Farm Bureau and those fronting
coalitions said the settlement will help landowners.
"This lets landowners know it is not a David-and-Goliath fight," said
Nicole Gwardyak, a lease negotiation specialist who represents
landowners in Tioga and Steuben counties. "It lets gas companies know
they will be watched, and they have to follow the same code of ethics
everybody else does."
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