Oil and gas law is, at its core, real estate law that has been shaped by a thousand years of common law and, more recently, statutory law. Ohio is no exception, and one area that has been impacted significantly by shifting legal policies and statutes is the ownership of minerals beneath “school lands” in Section 16 of Ohio’s Townships.
In the Federal Land Ordinance of 1785, Ohio was required to reserve one section of land (i.e., one square mile, usually section 16), in every Ohio township for the support of public education. Extending that federal mandate, in 1917, the Ohio Legislature passed a law that, among other provisions, provided, “It is declared to be the policy of the state to conserve … mineral resources of the [school lands held in trust] … and to this end the state reserves all gas, oil, coal, iron and other minerals that may be upon or under the said school lands… .” H.B. No. 192, passed March, 20, 1917 (107 Ohio Laws 357). Realizing the magnitude of this reservation and the fact that the Ohio Dormant Minerals Act cannot be used against government interests, my interest was tweaked and I decided to dig a little deeper.…
Mineral and land owners in Ohio who are presented with a proposed lease from a landman or oil company often launch an intense study of royalty provisions, development covenants, delay rentals, Pugh clauses, well spacing and the like. They often refer to the Internet, land owner groups, owner-oriented attorneys and other resources. Like so many things, it turns out that our forefathers pretty much had it figured out. I recently reviewed a 1901 oil and gas lease from Putman County; my thoughts and observations are below.
The lease was granted by Noah Moser to The Sun Oil Co., an Ohio corporation, on Sept. 19, 1901. The recordation of this transaction is hand written into the Putman County records by the recorder. The consideration, what is today called the “signing bonus,” was $80 for a 160-acre parcel. (In today’s dollars, that’s an “economic power” of $56,300, or $352 per acre.)
In the two-page document, Mr. Moser granted all the oil and gas in and under the described premises together with the right to enter at all times for the purpose of drilling and operating for oil, gas or water. This included the right to erect, maintain and remove all buildings, structures, pipelines and machinery necessary, provided that Mr. Moser retained the right to farm the land not actually used. Just what one would expect. But here’s where Mr. Moser shows he knew what he was doing:…
This is the second post in a two-part series examining ownership of minerals located under bodies of water and roads. See part I discussing the ownership of minerals under adjoining waters.
Who owns the minerals underneath public roads in Ohio? This is really two questions:
- What ownership interest does the state, county, or township have in the land underlying the road?
- What is the rule for abutting landowners in the event the government owns less than a fee simple absolute?
Historical Ownership Interest of the State, Counties and Municipalities
Over time, the interest acquired in the land underlying roads has changed for states, counties, and townships. Ownership interests are transaction specific, but there is a general trend. Municipal roads were usually taken in fee, while roads outside municipalities are likely to be easements unless they were granted in the past 30 years, in which case they are likely to be held in fee.…