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Tuesday, July 29, 2014

DOJ to would-be Meadowmont and Durham frackers: Cease and desist

Posted by on Tue, Jul 29, 2014 at 2:25 PM

It would appear the Pennsylvania company behind a number of bizarre mineral rights leasing offers in Durham and Chapel Hill has gotten on N.C. Attorney General Roy Cooper's bad side.

In a sharply worded letter mailed Monday, Cooper's office ordered Crimson Holdings Corporation—and its affiliated real estate firm Campbell Development LLC—to stop offering oil and gas leases in North Carolina. DOJ also demanded the prospective drillers, who sought to buy the mineral rights for nature preserves in Durham and the park at Meadowmont in Chapel Hill, reject and return any accepted lease offers from landowners.

"Until you can demonstrate that Campbell's practices and Crimson's leases are in compliance with North Carolina law, we demand that Campbell and Crimson immediately cease and desist from offering or accepting any oil and gas leases in the state of North Carolina," stated the letter from DOJ Special Deputy Attorney M. Lynne Weaver.

As reported in last week's Indy, the Crimson Holdings leasing offers were the first confirmed fracking bids in North Carolina in several years. They were mailed to an unknown number of Durham County landowners two months after state leaders lifted the fracking moratorium.

At least two of those landowners, the conservationist Ellerbe Creek Watershed Association and the Town of Chapel Hill, said they would not make any deals with the company.

According to Weaver's letter, there are numerous legal issues with the company's leasing offers. Neither Crimson nor Campbell are registered with the N.C. Secretary of State to do business. And, as pointed out by the Indy, the company's agent, Frank Sides, is not a registered oil and gas landman in the state.

Meanwhile, the 12-year leases offered by the company exceed the state's 10-year limit and fail to provide a copy of the state law laying out landowner protections. Weaver also complained that DOJ could not find a website for the relatively-unknown company.

"As our office is unable to reasonably locate any information on Crimson Holdings Corporation, we have serious concerns that North Carolina landowners will be unable to conduct any due diligence research or to obtain information on the ostensible company to which they are being asked to lease their oil and gas rights," the letter stated.

James Robinson, a leasing expert with Rural Advancement Foundation International, pointed out the leases would also potentially allow drilling within 300 feet of homes. Draft regulations in the N.C. Mining and Energy Commission require 650-foot setbacks, but allow companies to seek a waiver reducing the setback to 450 feet.

"I don’t want our landowners to see this and say, 'Oh boy, this is my chance to strike it rich,'" said Robinson, who is also a member of a Mining and Energy Commission study group on compulsory pooling. "Because these leases would not hold up in North Carolina."

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Agency tells Pennsylvania company that they are breaking North Carolina law.

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