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Company issues statement in drilling dispute



Published: Fri, November 30, 2012 @ 12:00 a.m.

Staff report

lordstown

Houston-based Halcon Resources Ltd. extended an olive branch to a group of Lordstown landowners concerned about amendments the company is seeking on oil and gas leases to allow larger drilling operations to go forward here.

In a statement released Thursday, Halcon said it would “reach out to each individual landowner in an attempt to establish terms that are mutually beneficial.”

Many of the leases at issue were signed over a 30-year period beginning in the 1960s. Halcon recently purchased the mineral rights to the property, which is located primarily in Lordstown and Trumbull County, with some parcels extending into Mahoning County, for $194 million in an effort to develop deep-shale formations in the region.

Halcon wants to change the terms of those contracts to allow for larger units to accommodate the fracking process as it drills horizontal wells, which require more lateral length and larger drilling pads, unlike conventional drilling.

Fracking is the process by which sand, water and chemicals are pumped into shale at a high pressure to release gas trapped in the rock thousands of feet underground.

At issue, the Lordstown Regional Landowners Group contends, is that Halcon does not want to change much within the contracts, a snag that potentially could cost the lease-holders and leave them undercompensated for any additional land use.

The dispute hit the media this week and prompted Halcon to enlist a local public-relations firm, ShaleComm, which issued the statement on behalf of the company.

In its statement, Halcon warned that without amendments to the existing lease agreements, “the wells will never be drilled, and profits to all will be lost.”

Halcon said it plans to spend extensively, while also calling on its extensive experience to develop the land in question.

“All landowners can be assured that a cooperative effort will result in our commitment of time, expertise and millions of dollars of capital in an effort to develop the most profitable oil and gas wells possible,” read the statement. Staff report

lordstown

Houston-based Halcon Resources Ltd. extended an olive branch to a group of Lordstown landowners concerned about amendments the company is seeking on oil and gas leases to allow larger drilling operations to go forward there.

In a statement released Thursday, Halcon said it would “reach out to each individual landowner in an attempt to establish terms that are mutually beneficial.”

Many of the leases at issue were signed over a 30-year period beginning in the 1960s. Halcon recently purchased the mineral rights to the property, which is located primarily in Lordstown and Trumbull County, with some parcels extending into Mahoning County, for $194 million in an effort to develop deep-shale formations in the region.

Halcon wants to change the terms of those contracts to allow for larger units to accommodate the fracking process as it drills horizontal wells, which require more lateral length and larger drilling pads, unlike conventional drilling.

Fracking is the process by which sand, water and chemicals are pumped into shale at a high pressure to release gas trapped in the rock thousands of feet underground.

At issue, the Lordstown Regional Landowners Group contends, is that Halcon does not want to change much within the contracts, a snag that potentially could cost the lease-holders and leave them undercompensated for any additional land use.

The dispute hit the media this week and prompted Halcon to enlist a local public-relations firm, ShaleComm, which issued the statement on behalf of the company.

In its statement, Halcon warned that without amendments to the existing lease agreements, “the wells will never be drilled, and profits to all will be lost.”

Halcon said it plans to spend extensively, while also calling on its extensive experience to develop the land in question.

“All landowners can be assured that a cooperative effort will result in our commitment of time, expertise and millions of dollars of capital in an effort to develop the most profitable oil and gas wells possible,” read the statement.


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