The Oklahoma State Capital

GUTHRIE - Guthrie officials offered a resounding "No" to a request from Shields Energy Inc. Guthrie Councilors reviewed an offer from Shields Inc. Tuesday night which in effect would lease a 24 lot section of land upon which Favor school is located.

Shields Energy plans to access a drilling opening that was used in 1981 by another oil production company. This site is located in the Capitol Hill Townsite of Guthrie and is not a residential area.

Shields Energy indicated a significant area that is owned by several different property owners must be leased in order to allow for the establishment of the drilling operation. Shields Energy has been contacting property owners in the area and asking to lease property. Some of these property owners have allowed Shields Energy to lease their property, others have not. The Shields Energy spokesman indicated that Shields Energy will go before the Oklahoma Corporation Commission to ask for forced compliance from the property owners who refuse to lease property.

Ward II Councilman Randy Foster asked the spokesman what Shields Energy would do if the City of Guthrie refused to lease them the land. The Shields Energy spokesman made it clear that Shields Energy would consider applying the forced compliance to the city property as well.

City Attorney Randel Shadid stated that he was not sure that the forced compliance could be applied to the City of Guthrie. He also advised the council to turn down this offer stating that he had problems with the length of the lease (3 Years) and with the amount of royalty received by the city (1/8th).

The Shields Energy spokesperson said the drilling would probably require only a year to complete but did not explain why a three year lease was requested. He did however indicate that he felt the lease rate was fair.

On a motion by Ward III Councilman Grant Aguirre and a strong second by Ward I Councilman Brad Morelli the council unanimously voted to turn the offer down.

On an additional note, Randel Shadid who has been acting as interim City Attorney was officially retained on a permanent basis. Mr. Shadid will be replacing former City Attorney Brian Person who resigned last September to accept job as a private attorney at an Oklahoma City bank.