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The option to lease the land on the city's watershed property expired Jan. 15.
"It was the position of the solicitor's office that the company ... did not effectively exercise its option. Therefore, we notified them that we considered the matter ended," City Solicitor Toni Cherry said during Monday's council meeting. "We have received correspondence from Carrizo that they are not going down without a fight, despite the fact that they did not exercise the option."
The lease option was drawn up by Carrizo and agreed to by the city and provided that if Carrizo wanted to lease the land, it was to notify the city by letter and tender a payment of $1,068,224.35.
The letter and check were never received.
"A man's gotta do what a man's gotta do," Cherry said. "They have advised that they have filed suit in Texas. The position of the City of DuBois is that it is incredible that a Texas company would try to get a Texas court to decide whether or not they properly executed an option for Pennsylvania land where the party on the other side is a Pennsylvania municipality. The long arm statute was never meant to extend across states in that manner."
Carrizo is a mid-level, publicly traded company founded in 1984 by former Shell executives. The company has grown extensively because of its drilling efforts in the Barnett Shale region in Texas. It has about 235,000 acres under contract in Pennsylvania and has 12 wells scheduled to be drilled in the state this year.
Resident Sam Miles asked Cherry if the city has considered writing to a major oil company about the opportunity.
"At this point it would not be appropriate to be investigating other options," Cherry said. "The first and foremost goal of the City of DuBois is to protect its water supply. Now that we're hearing from other parts of the state that they're having difficulties, I think we need to investigate that and what companies are actually responsible for those difficulties."
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Reported by Katie Weidenboerner, staff writer. Email: katiew@thecourierexpress.com.
