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Gulfport, Ohio Village to Resolve Water Dispute Outside Federal Court

Gulfport Energy Corp. has dropped a lawsuit against a small village in Southeast Ohio, electing to resolve a conflict about its ability to buy water for its drilling operations from a reservoir in the community outside of court.

Earlier this year, Gulfport filed a complaint against Barnesville in western Belmont County, arguing that a contract it has with the village permits it to buy water from the Slope Creek Reservoir for $10 per 1,000 gallons unless the "health and safety of area residents and businesses are impaired." Barnesville, Gulfport said, has refused to provide the water, which is in violation of its contract.

Antero Resources Corp. intervened as a party to the the lawsuit, which was filed in the U.S. District Court for the Southern District of Ohio, but the company reportedly agreed with Gulfport that the litigation was impeding a timely solution to the matter.

"While the parties have not resolved their differences, they do agree that that lawsuit is an impediment to discussion of and resolution of those differences," said a joint statement released last week by Gulfport and the village. "The parties agree that the pending litigation does not provide the best and most cost-effective forum in which to address all present concerns of all parties."

Both parties said they would continue talks to resolve Gulfport's complaint. The village has said the agreement does not give Gulfport unrestricted access to the water supply because it had planned to sell water to multiple operators.

Belmont County has become a hotbed of Utica Shale drilling in recent years, transforming into one of Ohio's top-producing counties (see Shale DailyAug. 31). About 20 miles north of Barnesville in the county seat, St. Clairsville, many operators and supply chain companies have established their regional offices. The county is also key for Gulfport, which has 243,000 net acres under lease in the play, where it has increasingly turned its focus to dry gas production as the price of oil and natural gas liquids remain low (see Shale DailyAug. 7).

The company's dry gas windows, which straddle Monroe County and Belmont County, currently account for about 64% of its proved reserves, according to its latest investor presentation.

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