forty four fifty seven that's more what we would like to do with your consent would be to reserve eight minutes for rebuttal that will be presented by one lawyer and then the balance of the twenty two minutes initially here will be divided by myself and quite a handful of landowners we represent roughly ninety one landowners of those landowners are in carroll county ohio and noble county ohio and they they have landed in compass is roughly five to six thousand acres in those particular counties it's not in dispute here that we're all dealing with ohio law and one thing your honor that you just as much dispute as the contract law that's generally  through period in two thousand and ten and those leases set forth a primary term that ranges from three years and some of them have a five year primary term are the various cases involving the primary them cases involving situations and primary to judge more there are occasions here and it's not delineated in the record for you but there are circumstances where some of the leases have been extended where the primary term has been extended where the additional like period of time i can't give you one example for instance that's exactly what's a like a ball in the stewarts scenario the storks at the end use least that was in place for an initial primary term of three years from two thousand and eight to two thousand and eleven and chesapeake did under paragraph or elect to extend that primary term and in that particular record and this is what gets important in terms of our analysis of paragraphs four and fourteen in the story the sample it was near the end of the initial primary term when the stores of pain and offered to lease the property to another entity they then believe like all of the in these cases believe that paragraph four is structured to give them a benefit to specifically allow them to approach another man to be in a pain an acceptable bonafide third party offer the leas their territory and then follow the procedures which is a protective measure measure of success of follow the procedures outlined in paragraph fourteen weeks then the right of first of all we're talking about four fourteen i mean do you mean to be talking about both are you did you get them mixed up just now though or in the stuart case is that that was right sized as an extension of the primary term right i will emphasize that half so in that case the the lessee exercise that right and as paragraph four yesterday but you're saying meanwhile the less or solicits are obtains another offer correct the important thing a peak acknowledged in paragraph one eleven of the complaint directly that all of the leases in question in this case are in a primary terms it's essential to understand that because when we look at paragraph fourteen the introductory clause to paragraph fourteen is triggered if during the course of time frame a primary term and offer is a pain by the landowners its air go what is the issue though in this case correct and what we have done and what we before you get on to that different subject go just to wind up your illustration with the stuarts i think you say there's room so that the less he exercises it's a paragraph or right to extend third party offer comes in and i presume your position is that that point the less or notwithstanding the extension is entitled to it and not least the effect is that terminate the lease if chesapeake does not exercise what's the practical importer some of these paragraphs if under your reading of fourteen but having said that just go ahead of what you want to talk to us just so i'm clear also yes to the primary term is let's assume the three years is only the six term and then in those instances where there's been the extension of the primary term that money has been paid again but see that's not that's not a question the primary term issuer defining it is not more than the two time periods the first one these leases how does one in that's in the position of chesapeake or its predecessor and choose avoid implicating paragraph fourteen you get the leases out of the primary term and paragraph three expresses how you do that you do that by following advancing ohio's public policy to produce oil and gas so that landowners realize the benefit of the royalties in the leases if in fact there had been wells drilled and produced it removes the least from the primary term when you read paragraph three you'll see there are about four sentences broken out by common it's expresses a primary term which is a fixed duration if then uses and so long thereafter or or so long thereafter under some circumstances the most important clause or honors is when you pick up after the calm of there and you have or as long as a well capable of production is on the property so in other words if you strike out what i believe is irrelevant information in there you have a primary term for as long as a well capable production and that's typical it's standard in the industry it's common among the law in the world and gas that after you have production you are no longer in the fight here however again key that we have cleared actually during the three year primary term  you were no longer in the primary term wonder there's production correct you've moved a lease to a secondary firm not only as a function of law and the standard in the industry but under paragraph three language it's written in the destructive or after a it's not that you can have a primary term and you're also producing you have your primary term three years or so long as a well and that was by the way when you read it was not used thereafter and this is the first time i've thought about this so i apologize if i'm going to sound dumb but here is graph three says this lease to remain in force for a primary term of three years or for as long as a well right people production why does that  certain conduct here you have the word thereafter conspicuously absent from the provision dealing with a well so you have agreed and this is my proposition that you have a period of three four five your primary either by means of being in the primary term or by means of these other things happening right now here i want to size again acknowledgement by chesapeake were in the primary term neither chesapeake nor now i say why are you so fixated on this primary term eliminate primary term then paragraph fourteen is of no utility to the land well let me ask you this question i mean it says primary term of three years and for as long thereafter so isn't it fair to say they can't get out of the primary term for those first three years no no in fact that's where fourteen doesn't outweigh their after would mean here but you have to remember if those conditions were met me and fourteen was not an the reviews the that says there's a primary term and then so long thereafter however that general clause must be limited by the specifics of paragraph fourteen there had to be a reason for putting paragraph fourteen in this lease if chesapeake's predecessor and shoots just wanted to make it absolutely clear we're buying a three four or five year lease and we don't have to do with thing you would not have paragraph fourteen in this lease why wouldn't fourteen be there so that if somebody else was occupying the landowners a much better deal because all of the said something wonderful was discovered there then chesapeake could keep  because they would have that term but by providing in paragraph fourteen for a mechanism i don't care the nomenclature you give or the price escalation of vendor protection clause whatever the case may be they provided and shoots provided expressly in there that if during that primary term an offer acceptable for the landlord or the the landowners is received they can then accept that but only after following the process for a right of first refusal and the record here for our clients is absolutely clear we follow that process to the letter we have detained these bona fide offers we submitted them all of that is in the red ink it's not disputed that you follow the process as you understand it they just  my last couple minutes i'd like to then look at the language we submit to you that we are not adding anything or suggesting adding any clause that paragraph fourteen in fact we're asking for the literal reading of it it's what it's interesting though when you look at the a lee's brief for instance on page twenty four of their brief in his number forty four fifty seven they purport to summarize how paragraph fourteen works in their mind trying to basically oppose the charter that i devised that have  and they start out by suggesting to you that lee paragraph fourteen works by saying during the primary term the less or presents chesapeake with a bona fide third party offer to lease the oil and gas rights for a period beginning after the expiration of the primary t when you look at the language that is so clear what is to happen that uses the word shall place yeah but you know i think there's a little bit of a difference it's not your shall  you shall consummate this thing or whatever i mean one of the shelves at least is you shall have thirty days correct it just you know you shall have the certain amount of time to match to match it says to thirty days to advise of you were agreement to match and then to proceed immediately not just the consummate not to just bring it to some fruition but to effectuate the consummation of that transaction in the new lease doesn't that just mean signing some paperwork or something we believe it means bringing that new lease to actual fruition the only way you bring that new lease to fruition is recognize that the and shoots lease falls away as a example people on other properties that aren't subject to this don't they effectuate the consummation of top leases all day long that won't take effect until after the expiration of the ext used in the industry to deal with the scenario you're talking about and those clauses say in them that is for at least from a cone of a bona fide offer for a lease from a third party that piece of fact at the end of this leads that's how easy it question about the effect on the consummation of the transaction yes and the survival of said transaction through any statutorily mandated ride of cancellation they arrive when is your understanding well ohio does not have a particular statutory mandated process for that we'd like to live there i believe that language may have been a likeable for other states in which the and she was lease was used i can tell you though i believe that clause reinforces the fact that the parties knew full well that if there's a bona fide third party offer that comes in acceptable to the landlord landowners chesapeake has its thirty days to advise of its match and it either does or it doesn't but that transaction gets consummated whether it's with chesapeake or with a third party and that protective sentence there is meant to reinforce the fact that that transaction is the survive any requirement to file any thing or record anything it please the court my name is kristen moore and i represent several of the appellant landowners in this case and the cain versus chesapeake matter i think we're here today because the chesapeake is asking this court to interpret these leases as it wishes and shots had this is the top leagues i was saying well in any event i think the chesapeake wants this court to interpret this provision as permitting a top lease and that is not the language as mr matthews pointed out  a traditional top lease provision would include language that would say it is effective only upon the terminations of this lease so that is a distinction that is not in this case there is not a single doesn't want this lease i mean that this agreement right i mean they're the first ones there i'm not an expert in this by any means but topless comes later right well that they want a third party offer to be interpreted as being effective only after their leases over and our president usually the way leases work right our position as it ends and then the next one starts usually under this scenario and under this language we believe this permits the new lease to become effective immediately and that is help me understand hale and should switch us of would obtain the benefit of their bargain if in fact anyone could come in immediately and have a different lives that's a great question this provision was included in the contract so when this lease was bargained for they knew that paragraph fourteen existed and they knew that the landowners had a right to do this this isn't necessarily a concept that is foreign and contract law people purchase options all the time people spend money to buy the right to tie something up and the event someone else makes an offer they have the right to match or to not so by inserting paragraph fourteen they knew this was part of the deal they knew there was a risk that another third party offer could come and they would have to match it or not match paid in advance right the delay ronnell was paid upfront that is correct so why would it company a what you call the delay rental in advance it's a normal really year term and yet it could and after one month it's a nominal amount the delay ronnell is  much we're talking dollars per acre for my clients and it works out to about an average of seventeen dollars per acre so for the signing bonus the total amount varied of between five hundred dollars  thousand dollars so we're not talking about a lot of money i guess if i had to analogize it it's maybe comparable to i think i'd believe mr crowder used kind of a guaranteed price provision i would say maybe an adjustable rate mortgage scenario you buy upfront you can pay less up front knowing you have an obligation to match market conditions and it doesn't work out to be a bad deal for them because all they have to do is match the market condition if it's a bad deal they won't take it if it's a good deal they'll take it or what if they are getting what they bargained for what if they come in set up a bunch of equipment and so on and start you know investing in exploration a exploration itself hasn't started in let's say we're within the first three years and so then all that investment just goes out the window as soon as some other person maybe hears that they found something and makes an offer that know anyway well i think that's exactly the point mr matthews was making is soon as they begin operations as soon as they fulfill the very purpose of this contract they're protected well let's suppose you're mistaken about that ok let's suppose the word thereafter and paragraph three means after the three years and i understand your argument but if that's not right then we do have this practical dilemma well  it will cost them more but they won't lose their investment because again we're we're not asking them to give it up completely we're only asking them to meet the market condition so again it's still worth that money we're not  beyond what the mineral rights are worth at the time that that third party offer was there well you know i don't lease i don't know if your business as well is i don't know your client's business well you folks do but i mean why couldn't you have another company waiting in the wings kind of watching to see which wells hit and then you could come in and overpay to some extent relative to the lease market because you don't have all that exploration cost and and a bit and then the chesapeake is asked to match an overpayment that's plus a very had the investment cost at that point it becomes a lot more expensive for chesapeake just to you know hang with this lease than a wood for the sort of vulture company right i guess my response would be twofold and the first is that i it is my understanding that is the standard in the industry that once you drill you are protected but that is the way of oil and gas operates and i doubt that we'll have by disagreement on that point are you protected if you drill or are you protected if you have a will capable of under the paragraph three of the lease term but explain to me just how just briefly reiterate it to you the language is different you have a primary term and for as long there after as judge ca pointed out is operations are conducted or for as long as you will capable it sounds like you've got a primary term thereafter operations or right now a well capable of production that's correct so once once we have achieved the purpose of the contract and we have a well and they are protected well but they're not protected chesapeake is not protected while it's conducting operations  looking for the plain language of the contract they prepared permits a third party bona fide offer during that timeframe that is correct that is the language that they have prepared and if a plane and literal reading of that language requires that result we're talking about when should this third party bona fide offer become affective and the concern that judge adams had was he felt that it should not become affective until the end of the lease term the plain language i believe for head hits that interpretation because it requires not only immanency in terms of promptly providing having thirty days immediately thereafter but it also requires them to take cooperate of steps necessary if all we were doing is accepting someone's offer and letting the research the lease run its course chesapeake one have to be involved we would not need them cooperative steps imply that we need them to accomplish this transaction we only need them if it involves their lease the next clause also reinforces that interpretation and this was something that you brought up your honor the survival of that transaction through any statutorily mandated right of cancellation if this third party offer is only affective once the lease has run its course why are we concerned with the possibility of cancellation we are only concerned with that possibility if there correct i mean by its plain terms well i'm here one year after the primary term you know within one year from the expiration cancellation or terminations of this lease yes so the lease is over and yet it is your position that this provision does not green a right to them instead it imposes an obligation upon them to accept that the other or to match the other offer or else be in breach items that make any sense nine months after the lease is over i believe that this is a mutually beneficial provision well answer my question and then i mean how does that make sense if i mean your basic concept of this here is it imposes an obligation upon them not a right and if they don't meet that obligation they're in breach and you can obtain a remedy how does that make any sense nine months after the lease is totally done well after the lease is totally done that is a beneficial provision for them because they have the right of first refusal during the duration of the lease it's also proceed with consummating the transaction with a third party offer or so it is entirely up to them which avenue is selected and presumably they would make the best business decision based on the price that was existing at that time with a b in breach don't accept or they don't match nine months later they're in breach which just seems that sort of a signal that we're not on the right road here that's not how i interpret it ok i interpret it as their breach is not their failure to accept their breach is they're preventing us from consummating the transaction with a third party offer so they can they can do either to satisfy their obligations they can either accept and match that means said transaction is the third party transaction that the said transaction is whichever is the result of that offer the match or the op or the third party offer it can be and it should be remanded for a factual determination thank you good morning honors daniel donovan for the chesapeake entities and as you mentioned i know i have thirty minutes i don't plan on using it unless we keep going but just wait until you know what i want to do to practice this is i want to ask if i could take a few minutes before getting into the questions you asked my posing counsel to explain away certain of the provisions i know you've read it but i believe the structure here is all down as i all me ok so i'd like to begin with the leason focusing on that because i agree with mr matthews the ohio long contract interpretation as well so paragraph one of the lease provides chesapeake the right the exclusive right to explore for and produce oil and gas from the less worth property sources get in return they got two streams of payment and they are different the first is they received an upfront payment for all the rent due under the primary term so they have been paid they have already been paid at the outset  or the rent or the lease of each year of the primary term that's why it's called the paid up oil and gas lease is a mainstream one are your opponents correct in their characters ation that this upfront payment is actually in the case of finding the resource is a really small component of the overall money that's flowing to the less or what depends if there is a royalty payment which is payments to number two than it is and we have people earning fifty thousand dollars a month and it's great it's a win win situation now there's someone places where we spend money and we don't find any wild guess so that's all they receive so it depends on each one it's not a huge amount of money we're talking about though i gather oh well it depends upfront no it depends it's these leases back in this time period when the market was different it's lower than people who we've signed up in the last three years were getting a lot more and as we say in the brief it's not for your interpretation but we believe that's why these the different sections that we're really here about which first paragraph three which is defined and you've spoken with opposing counsel but this lease shall remain in force for primary term of three years in the least  somewhat i take a different position i think it's a plain reading that is going to remain in force for three years that's the plain room it's not subject to any exceptions and us it says and for as long thereafter as scribe payments or are made a nd then they're to yap it or if you would explain sure no i'm sure you think they're reading is wrong right they're reading is wrong because the primary term in the industry it is it says as it says it's three years now you may have i may have a while on their property within that for years but that doesn't take it out of the primary term because i'm a drill while it's a dry hole well that doesn't mean i drill the well while i still have three years to find a well that's going to produce the primary term as it says plainly there is a set amount of years but whether they're focusing on the or poor as long as the well capable of production is located on the least of all i'm sure so so what happens is there's a sudden on years as in most cases the chesapeake would want it as long as possible so we have time to look for gas but then once there's a well all the parties agree or wait whether the primary term runs out or not long as you're producing oil and gas and they're getting paid it stays in  effect and there's traditional wells in this they have been around for fifty years and those those leases may be really old but as long as you're producing oil and gas they stay but if you read three and four and i don't think it's critical to fourteen but i do disagree and i want to be that the primary term just rent us is three years and then we get to extend it in this one usually it's the same amount of time at our sole discretion we only get to do that once so that was your point so it's still called primary we've got judicial decisions all over the ballpark on this well what is an extension is it still the primary terms or is it just the first three let me just roses on ours here yeah it's the explain your sure paragraph corps extension of the primary term so we are still in and typically that's a benefit for us some some less or strike it out but here this leases we have here we have it it's a benefit because if we're coming up to three years we have the right to say you know we're just going to pay you again when we get another three years but that's the outer limit at the beginning thereafter as operations are conducted but then we don't have their rafters for as long as a well capable production is located or as long as extended by provision here and i guess forget about the and the well one shows the omission of there that those who can't talk the omission of thereafter mean that you do get out of the primary term as soon as you have a well capable production you know the primary term is what it is they can overlap we can have a well during the primary term but the difference i submit there is there are two different clauses right we could be searching for oil and gas and not yet have a well but other provisions a leas require us if it's beyond the primary term to do it continuously so we let's assume the primary term is over and we're searching for thirty days on the stuff or year lease runs out that's why there's ones that were ordered keep going on hold that just by once a year stepping on the property once you go that under your interpretation that would mean that if you've got a well that is actually producing this right preferential right to renewed protests it enables  landowner to come in during the you are well capable of production activity and bring in a counteroffer right for the end of the lease that's exactly why their interpretation is so absurd extended by provision here and you can make your lease go on for a while so how would they ever have i mean how can you have a fair reading of a document in which there's an possibility it's not impossible and it is unusual but it is not impossible here is what would explain to me from their viewpoint you're not you know because you have to call and if you make the choice to to expand the provisions been can you make it impossible for them to exercise fourteen i cannot and let me it's also let me explain why what we're dealing with in this case is simply people that are within the primary term so it's within either the first barrier or the extension if we put it if we're searching for oil and gas so we're beyond the primary term we have to do that continuously and not have a break for ninety days under other provisions if i stop within that period and that's beyond they can  and what happens in this happens all the time it's usually people looking just to capitalize they'll say i will enter a top lease with you because i think there's something still left there and it will run out when chesapeake's runs out let's assume my lease runs dry and chesapeake doesn't do anything any further they then it would have to give me notice me chesapeake and i would say i'm done with this well and then paragraph fourteen comes into effect there is never a situation which her fourteen is not available now and if you say i'm not done then they can enter it with the other one but it doesn't take away my current lease rights and that's what i want to come here to say that your graph re says that you just peak if you have  run out her grafter gives me that right and i want to if i could just pause here for a month because i heard two different things from counsel on this is new is in certainly not words in the least they know that all of their interpretations so they're trying to give us protections which we appreciate but we don't think it's the provision one as they say if you drill a well you then you're fine paragraph fourteen doesn't apply it doesn't we believe if you interpret elisa's poll that's true but it doesn't say that and then the second counsel said well if you start operations then it doesn't come into effect well none of those words are in there in that shows the real problem with their interpretation is let me spend a moment on drilling a well is not something that happens in a day ok obviously the market knows chesapeake energy is in ohio we're happy to be here we think it's a cooperative process in which we're developing oil and gas and royalty owners make money and we make money but when morning neighborhood people know we're doing seismic active we're looking for oil and gas and the royalty owners talk and they should and they say well geez chesapeake's looking like they're going to put it well on my neighbor's property well at that point i haven't drilled i'm probably not going to drill for another six months because i've got to get permits i've got to finish my seismic i need to line up water i need to get drill rigs from pennsylvania and ohio and then finally i might drill the well well in the meantime if this provision would do that i would lose everyone they would figure out as a matter of economics what is the price i can get that payment to the force chesapeake to pay and i raise that just to raise really the impractical part not them i want to get back to what the words say but the impracticality of that interpretation of paragraph fourteen that is not title long as we have as we talked about operations or well paragraph or title the extension of the primary term gives us a one time right so under the lease we're looking at a lease term has three years and we can extend it by three or so we have six years the fine or oil and gas and then paragraph fourteen at the end isn't titled the preferential right to new which i'm going to to turn and that against that background of those three periods that's what we want to judge adams with and i want to be clear this is gas leases during the primer term pursuant fourteen there are other cases out there that we may have other claims but that is all judge adams ruled on and that's all we ask them to rule on because that that's the big issue in this case although it wasn't talked about i'd like to briefly just summarize that the dish what the district court did hold because he did this after receiving seven briefs and a hundred ten pages of briefing is that there was a preferential rates for renew provision excuse me doesn't provide the lesser as a right to terminate the leases during the primary term instead the district court held paragraph fourteen provides chesapeake the right to renew its oil and gas rights beyond the primary term if it matches in the dish report health which i think you see through the different briefs the varied inconsistent proffered interpretations were consistent with a plain language of the provision would require added language that lease as we all know is not proper under contract interpretation and in our view is that  judge adams said or my view conflicts and primarily conflicts with paragraph three and four which uses the term shall for the period of time at least for the years to chesapeake and thus we submit they should affirm well i mean but you would have to admit that this writer for new whole is very awkward awkwardly word you now i mean it could be much more clearly worded to mean with your opponents think it means but it could be in the phrasing of you know you shall you shall promptly provide the lessee in writing that i'm sorry you know you shall advise less or in writing  want to get to that to i i don't think it is especially when you look at the lease as a whole i want to address those and terms i actually retired that provision and i if you look at it it's three sentences i know it's hard in these least form sometimes but it's three sentences in judge adams respect we did a very nice job of walking through each of them and the first one all the first one does it says when the last words are obligated to provide notice to my client chesapeake that's all the first sentence says it's long but it says during the primary term or within one year or even after this leads terminates the less or receives an acceptable bona fide third party offer to lease the leasehold less or excuse me this is the key less or shall promptly provide the  verified particulars of such off that's all sentence one provides and that's what a judge has less or has an obligation right to promptly provide then the second one says once they do that the lessee chesapeake has thirty days from the receipt thereof to advise less or writing of its agreement to match said offer as to all terms and considerations we have thirty days to match it immediately thereafter less or less you shall take all cooperative steps necessary to effect the consummation of said transaction and the survival of said transaction there any statutorily mandated right of cancellation there on our interpretation judge adams is if we agree to that we have thirty days or within thirty days we have to sign it up in why is that well the reason is we can't say yes we agree will sign it will sign that with you later now if we want that lease that's going to come into effect later we've got to sign it up now and that's exactly what has caused the lose the other opportunity after yes because usually goes to my limits on right someone will come in and say if you sign within the next sixty days well we'll agree to have this lease the comes into effect later if i say yeah i'll get back to you i'm not going to sign it they may lose that right in just french us about the last clause of the survival it doesn't apply ohio it's from new york cancellation what that says is less or less see how to make sure we get through that at a time ok but it's not i wouldn't in this case the parties agree with that and then the last clause is any lease or option to lease the lease hold in whole or in part granted in contra we say we don't they can sign it with the other party the issue is i think the reason judge adams definitely did is ok when does it take effect well it only takes effect at the end of this lease and why is that i just like really come back to where it started it does because of paragraphs three and four that is the last or has already least oil and gas rights for these periods of time we've paid them for we all agree to that and they're not  you've paid them for the first three year time then you have an opportunity to pay them for the second three your time here and then you have an opportunity to pay them all of these fail or only nominal payments to be made to hold the property now you know if we want to look at it from both so i'm not sure i understand the last part is we basically we pay him upfront for paragraph every three years and then we have the opportunity at our sole discretion to say and not everyone agreed to it just happens to be these less or as in this case want is we get to take three more years or so by the end of that if i haven't put it well or i don't have operations i have no other way to extend this lease but if you have put it well and if you have operated and or if you have operations the lease goes on as long as you're continuing in that activity yet there's two different i have certain obligations i can't stop for a period but if but if i have a well everybody wins that's the ultimate goal for both chesapeake and the landowners i think i heard mr matthew says one that's correct of these per year because the delay rental is ok i run it for three years i'm not doing anything the first year i don't do anything i have to pay you the delay rental we're under these because it helps the less sort of up the road here and we don't want to miss a payment we just came up from well but the i'm i'm trying to understand how long that can last because it says if operations for drilling are not commands i'm not done within ninety days from the effective date less continue this lease in full force and effect biking payment to the less or and the a right five dollars per net mineral liker per year payment to be made annually until the commencement of a through i mean we don't have the right to do this with the lease term and during the least and if i drill a well i don't even have to pay that you know ok the three year primary term the three year extension a one year to kind of get it going again and during that period i'd shut in i have to pay that bill a rental but your honor i'd say that's not at issue in this case because will there be your opponents say this gives you an indefinite take me out of context this is an entirely or at least firm as is traditional defined in three and four as we talked about and five is all about what do we have to pay during that lease term and delay rental is one if we have delay if if we're producing more oil and gas then you after as operations are conducted on the leasehold in search of oil gas or their constituents yeah i believe in the need to look to the other person's it's it is a delay rental ok well if that's a delightful a rental as long as you're doing some sort operation it can go on indefinitely well but there's other good faith grounds and we have to do it continuously so there's another provision and i can look inside it but it basically if we stop for ninety days the lease goes away so what  don't stop for all days you're conceding that it can go on indefinitely it never well it's their way and they do the theory for them is the kiddie well i don't your own but but but that's raising a different claim and we've had different cases which is are you in good faith actually operating on my property that's not this case i mean that's truly is a different debate what this case is about is how long can you continue to work in maintaining your right to hold my property from some other usage in which i can make money from another individual they don't care right now whether you're going to you're going to be arguing about good faith commencement or how long what i want to know is what's the worst case scenario how long can you hold my property under this really so that i can't go to somebody else and pumping at one corner of that awkward for and they're at the other corner there can be no oil left by the time somebody wants their property well or not i don't think under current unit is ation want to go and and actually your honor it's the opposite of what they're doing ok this leaves provides very sutton's in this happens all the time what they are trying to do is to get a front row payments that people got paid in two thousand and eleven twelve and thirteen rather than the deal because yeah well it's not actually i know i'm yourself from drilling wells ok as well is and i have a pretty simple question sure what he is under your interpretation of this lease what is the maximum time you may prevent them from entering a lease with another the other less or i think that to answer your question if i have to put it well on their property and when that well runs dry because if i don't do anything it's going to run out six years under our and if you do something but you don't find a well or you don't well it can go on as long as you're doing something in theory or honor but i'd have to be doing something and i have these cases where is the is the operator doing something intrude faith the search for oil and operations well it defines it further and it says and again this goes just strange it says if at the expiration of the primary term which again shows in my view the primary terms a set number of years whether i'm doing anything or not there is no production of oil or gas wor goes on our prosecutor with no suspicion of more than ninety six consecutive days and if any such operations result in the production of oil and gas as long as there after there is production or the term of this leases otherwise  so it's the finding when and what we have to do in this lease it doesn't seem like it's expressed but there is an implied good base under ohio law day perhaps the warning to negotiate in new lease with someone who's going to come more out and that could be the problem that you for whatever reasons maybe your judgment about the market for gas right now is that it's not as high read it's going to be the future so you want to delay and they  try to find that what really happens your honor is this is not in most cases other big companies ok this is some other where they're just looking to jack up and they want to lease it right back to us ok they're the biggest oil and gas producer in this state  early drilling so i don't believe that is part of this part of this is that it's undisputed that they signed these leases when the upfront payments were lower than they are in late two thousand and ten eleven and twelve it's public knowledge  we paid a lot to answer it's we didn't pay what they paid and shorts when an early sign of these leases and then sold them and if you look at five l it addresses that five also as the lesser recognizes and acknowledges that oil and gas lease payments in the form of rental consideration we believe that's exactly what's going on and judge adams referred to that will not seek to amend or modify the lease payments i mean seek additional consideration in this is the reason why the argument that this is a most favored nation clause cannot possibly be judge adams found five l is is not permitting that expressly what about five k it says it's agreed that it last sentence is agreed that this lease shall never be forfeited or cancelled for lessees covenants whatever that is we don't believe it applies here in this case it is i mean if it is so so we basically can say you missed the payment by today i mean it would help you if the supply right because well i don't know well i but two main points your honor terminations judge adam has this but i think it's critical under the altman hospital under this these course the social contract there is nothing in here that says they can terminate ok that they've been creative they have a lot of interpretations but terminations serious and it doesn't say that and you have to add words to do that and we have this in our brief but we believe the title that they call a lot of things the preferential rights in your renew it's a benefit  we agree it's a benefit for us we get that we get the chance before someone else if someone else thinks or something good we get a chance to match that after our time runs out and especially where does that show the most i think was your question i ve is it's even one year after the primary term as mr matthew says well it's not a topless no it's a it's a topless plus in our view ok we don't always get it but we get it the top leases usually just during the primary term because it comes into effect soon as the oil and gas company either doesn't develop misses a deadline this gives us even a year out so we believe the title manager matters and why can you consider that that's the ohio supreme court's dominant opinion that did exactly that  honor we believe that our interpretation is the only reasonable interpretation if you read the plain language and the lease as a whole and i come back to worldly understand why we don't have an ambiguous documentary we've got your that's isn't that a problem for him to cuti for you it is in your honor and first let me start with the ambiguity just the kind of level set us as you know when it's the sixth circuit we started the aerial decision just because they offer different interpretation doesn't mean it's reasonable mak what we're talking not just your opposing counsel offering it we're talking about other judicial officers determining well and in that case and i'm glad you raised that because i ran out of time but i wanted to address is this is primarily there's been  been coordinated in the green case i respect was it was a summary decision just saying i'm denying the above what it said it made a conclusion i know he didn't explain it but when you say i'm not i'm not taking this up i'm not  in that case more than just what we saw the declaration is on terminations of that but if you look at page twelve of the slope opinion what judge marcus found was and i'm just reading a key part that he says the replacement lease that top police or the additional lease cannot interfere with chesapeake's rights to maintain in active speculation during the primary term or its rights to maintain continuing operation he found on the key issue the same thing in judge adams and and we know that because actually we were appealed and there's one other thing that's critical he found with judge adams this court that being judge marcus also agrees with the catholic decision that the phrase immediately thereafter in paragraph fourteen refers to the time to complete all documents  the consummation of said transaction and not to the effective date of the replacement transaction so for what's before you both those boards are the same now there was work just marcus then said paragraph work means something else but actually interesting start at a minimum this provision is ambiguous in the intent of the parties in these to be determined at trial and the reason that i say that is we have chesapeake doesn't adopt your palates interpretation and doesn't adopt judge adams interpretation of paragraph fourteen in fact are several places where judge marcus expressed says i reject the reasoning of judge adams but isn't  true that we don't measure ambiguity by these sorts of external criteria i e by whether people disagree i mean don't we measure ambiguity by taking a look at the document even a complex document even a document that isn't particularly well drafted and after in looking at the structure in the language of it and then coming to a decision whether one interpretation is clearly better than all the others and if you know even if a bunch of judges you know haven't seen that i mean that's that's how we look at the document to determine ambiguity not at all this clamor around it well i think your honor i think that that is is the starting point but i respectfully disagree that the the standard is is one interpretation much better both offer plausible and not a reasonable interpretations of that provision and that's where in order for the court to determine that it's it's not ambiguous it's got to either find that chesapeake's position is completely unreasonable implausible and that cannot be interpreted that way i'm not sure if that's the standard but but and in fact in this particular case there was evidence presented by way of affidavit by landowners in the land agent trained by it showed his agent mason dixon whereby the landowners which is the real first of all we're not just looking at the paragraph we're looking at the whole lease looking at the whole lease and i just want to be candid with you about my at least one serious concern i have with your position which is that by implication i e not expressly because fourteen doesn't say you may terminate and so on merely by implication it seems to do an awful lot of damage to a number of other paragraphs it's like a that would go through a bunch and i understand that your position it's been very well stated by you and mr matthews ms moore that you know this fourteen one fourteen is triggered it's more specific and therefore governs and trumps all these others but you know it does give me pause how much trumping would be going on here i mean we have paragraph one you know lease exclusively to the lessee well that's out the window once somebody shows up and makes a better off remain in force for three years that could not that is not going to happen in many cases under your interpretation of paragraph or right of extension which is in their sole discretion that goes out the window if they don't match paragraph twelve conducting operations remains in effect that would seem to go out the window so we had at least three or four paragraphs that merely by implication as i mean it in implication in your view a paragraph fourteen is all that stuff goes away i mean should not give us pause that it's it's very first long as the term continues fairly talk about paragraph three misses shall remain in force for a period of three years and i think the at least said well that's a guarantee nothing can be done about that and absolutely has to be in effect for three years that's not the case and not only just because a paragraph fourteen paragraph seventeen of the lease allows the lessee if their election to walk away and terminate it at any time so they were all it so it's actually it's shuffle along as i doesn't appear in the paragraph the effect is the same and i'm going to tighten by talking quickly about the title because i only have a few minutes and i want to i think it's very important the title is removed and they happily use rely on those removed ren but if you look at the papers and you look at the briefing when paragraph working is operated this lease is never renewed it's a new lead it's either with chesapeake or with a third party software because what it if chesapeake exercises this right the underlying lease goes away there's a new lease with new terms and new consideration and one of those terms may be the terms are not restricted in term of the lease payment of consideration and so what this says is that they shall consummate the transaction well ok what about paragraph four that goes out the window under your butt but they've but they've bargained for that your honor they've bargained for because they wrote paragraph were team and they wrote it the way they wanted to write it and they continue to own them put into this and  wrong quickly that they continue to interject in this this time limitation has to be something after the lease it doesn't appear there in the real problem is that to adopt their interpretation renders paragraph fourteen meaningless because as judge stretch said that delay when told they can pay that already you have the primary term three years plus three they can either this drill a well or if they don't drill a well for five dollars an acre per year if you look at paragraph five a day they can hold this florida now i know they said well that's not the case it's not a limitation there's no limitation in that paragraph or anywhere else in the lease they can hold it reason for them to ever match an offer because any offer that's more than five dollars an acre they'll pay five dollars an acre in continue to hold for some point time whether it's twenty years or fifteen years or ten years or whatever who or may decide down the road so there's never going to be an operation of paragraph fourteen if you adopt there is that that the lease can only go into fat after the term the other thing it does is no third party is going to make an offer because they have no  let's give me your analysis of why they would enter an agreement on that and get what benefit of the bargain they get high entering the agreement as you interpret it based on what it's going to cost them to just do their exploration well i think first the the could they could have and they had the power to control that with the stroke and they could have very easily put in that if they receive an offer to lease the lease holder after the expiration of this lease then we're not here and they can control that it was a business decision that they made and i think based upon the affidavits and the evidence they made the business decision because it was a market inducement it was a way to get landowners to sign these leases so when they can't ten dollars over the lanterns of well i don't know if that's enough well wait a minute look at paragraph fourteen if the prices go up if the market value goes up you're always going to be protected because you have the ability to accept that offer and bring it to us we either have to match it or you can move for with the other offer so like what we're doing ok where do i sign up take that so it's a business decision that they made if they're in operations but they have not yet drilled the well and a bona fide third party offer comes to them then they've got to make a business decision based upon the investment we have in this property is it worthwhile for us to match the terms of this bona fide third party offer and continue what we're doing we're in the our best business  i mean that's your understanding contract that mean and they have the landowners are not sophisticated oil and gas people i mean they're reading this for what it says on its face thank you thank you think i welcome your argument we