On Jan. 21, 2016 the Ohio Supreme Court announced State ex rel. Claugus Family Farm, L.P. v. Seventh Dist. Court of Appeals, Slip Opinion No. 2016-Ohio-178, a decision that finally laid to rest two important oil and gas cases that have been winding their way through the Ohio courts for more than four years – Hustack v. Beck Energy Corp., case No. 2014-1933 and State ex rel. Claugus Family Farm, L.P. v. Seventh Dist. Court of Appeals, case No. 2014-0423.
The opinion, which was authored by Justice French and joined by four other Justices, upheld oil and gas leases held by Beck Energy Corporation and which are said to directly affect almost 700 landowners located in southern and eastern Ohio. The Supreme Court decision addressed three issues; two from the Hustack case and one from the Claugus case. The Court, in a separate matter, also denied a request to toll the terms of the Beck leases involved in the cases.
Justice Paul E. Pfeifer, joined by Justice Terrence O’Donnell, concur in part and dissent in part.
Hustack v. Beck
1) Is the Form G&T (83) lease void as against public policy?
The leases at issue in this case were standard forms that were often used by Beck, known as a “Form G&T (83) lease.” The leases contained a provisions that allowed Beck to make delay rental payments if a well was not commenced within twelve months from the inception of each lease. The Lessors argued that this improperly …