The oil and gas extraction technique known as fracking is not yet legal in North Carolina, but a Pennsylvania company is seeking to buy the rights to oil and gas from landowners in Durham County. The state Department of Justice has told it to stop.
A company called Crimson Holdings has been mailing unsolicited lease agreements to Durham County landowners. They offer $5 per acre for the mineral rights under the land, as well as 1/8th of any sales, minus fees.
The state attorney general’s office obtained one lease, and responded with a cease and desist letter. Attorney general Roy Cooper says North Carolina has some rules on the book, which Crimson seems to have ignored.
Laws require companies “to register with the state and to provide landowners education about the lease, that the lease can’t be more than 10 years long, that there’s a seven-day right of rescission.” Cooper says.
The lease agreements offered by Crimson extend up to 17 years. The Attorney General says the state has no record of Crimson registering, nor any official record of the company’s existence, period.
The employees and the address correspond to a Pittsburgh-based company, Campbell Development.
The town of Chapel Hill and a Durham County environmental organization also received lease agreements.
Cooper says his office is not aware of anyone who has signed an agreement. But he expects interest in land rights from outside prospectors to pick up, as the state prepares to permit fracking.
“We’re very concerned about it, and we will be very aggressive going against companies that are not following the law,” he says.
Rules developed to govern fracking companies are currently in a public comment period and are expected to be finalized later this year. The state could start issuing fracking permits as early as spring 2015.