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Commissioners say oil, gas company defaulted on lease agreement

By Carol McIntire
Editor

Carroll County Commissioners agreed to place a leasing company on notice.

After meeting for nearly two hours with Prosecuting Attorney in executive session Monday to discuss contract negotiations, commissioners returned to regular session and approved a motion “to pursue the oil & gas lease with Sierra Buckeye; to put the lessee on notice of default of the agreement in accordance with Article II, Paragraph 10”.

Commissioners signed an oil and gas lease with Sierra Buckeye, a Texas-based oil company in June 2012 for the Atwood Lodge property donated to them by the Muskingum Watershed Conservancy District.

The lease included a bonus payment of $4,500 per acre for nearly 500 acres that was to be paid within 90 days of the contract signing, an additional $1,500 per acre if a well was not drilled within 180 days of the bonus payment unless Sierra Buckeye canceled the lease; and an additional $6,000 per acre if a well was not drilled within three years from the time of the bonus payment if the company does not cancel the lease.

The initial bonus payment of $2,210,715 was paid to the county Nov. 2, 2012.

It was deposited into the Atwood properties account in accordance with that donation agreement with the Watershed District. During the first week of May 2013, commissioners agreed to a 60-day extension requested by Sierra Buckeye for the payment of the second bonus payment. At that time, commissioners said they expected the second bonus payment to be about $690,000. A commissioner’s office employee verified that, as of Aug. 20, the second payment had not been received.


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