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… Continue Reading
Category Archives: Mineral Interest
Subscribe to Mineral Interest RSS FeedCommon Oil and Gas Lease Conundrums
Posted in Contracts and Leases, Exploration & Production, Mineral Interest, Ohio, RegulatoryUnderstanding rights and obligations associated with oil and gas leases can be challenging. Imprecise lease language, implied legal duties, formulaic statutes and evolving case law all affect oil and gas leases in different ways. We’ve written several articles on these topics during the past several months and have compiled them into an eBook to help… Continue Reading
Ownership of Minerals Under Adjoining Waters
Posted in Contracts and Leases, Exploration & Production, Mineral Interest, Ohio, Real EstateThis post is the first of two articles examining ownership of minerals located under bodies of water and roads. Who owns the minerals under bodies of water? When oil and gas were being produced in meager quantities, not many people cared. But the story is different when lease bonuses are thousands of dollars per acre… Continue Reading
Gaining Perspective on Ohio’s Oil and Gas Laws
Posted in Mineral Interest, Ohio, Real Estate, RegulatoryOhio’s oil and gas industry has been around for more than 120 years. That means there is plenty of perspective, and precedent, to consider when applying Ohio oil and gas law to the Utica and Marcellus shale plays. We’ve compiled a few Oil & Gas Law Report articles into an eBook to help you build… Continue Reading
Ownership Theory of Oil and Gas Influences Bankruptcy Law in Ohio
Posted in Contracts and Leases, Mineral Interest, Ohio, Real EstateOne of the most fundamental questions in oil and gas law is whether oil and gas in the ground are capable of being “owned.” The answer to this question shapes the law and influences legal analysis in a variety of ways. Different states have answered this question in different ways, and the answer is not… Continue Reading
ODNR Issues Two More Unitization Orders for Horizontal Utica Shale Wells
Posted in Exploration & Production, Mineral Interest, Ohio, RegulatoryThe Ohio Department of Natural Resources (ODNR) recently issued two more unitization orders pursuant to R.C. 1509.28. These two orders bring the total number to four since the beginning of the Utica Shale play. As we discussed after the last order was released, this statute is becoming a valuable tool for operators as they cobble… Continue Reading
Be Careful Drafting Contracts and Deeds When the Ownership of Minerals Is at Stake
Posted in Contracts and Leases, Mineral Interest, Real EstateA recent decision by the Court of Appeals of Ohio highlights several errors by a seller of property who may have intended to reserve mineral rights. (See Mong v. Kovach Holdings LLC, 2013 Ohio 882, Court of Appeals of Ohio, Eleventh Appellate District, Lake County, March 11, 2013.) Facts In August 2009, McMenamin conveyed real… Continue Reading
What Goes Up … A Quick Glance at Ohio Oil and Gas Leases in Bankruptcy
Posted in Mineral Interest, Real EstateAs Ohio enjoys its latest boom in oil and gas exploration, it is important to understand how oil and gas leases are treated in bankruptcy. Unsettled Ohio law regarding whether a debtor owns unextracted oil and gas as part of the debtor’s real property can make this a difficult issue. In In re Loveday, No. 10-64110,… Continue Reading
When Is an Assignment of a Lease not an Assignment of Obligations?
Posted in Contracts and Leases, Exploration & Production, Mineral Interest, Real EstateWhen oil companies transfer oil property among themselves, they frequently do so by an assignment of lease rights. Sometimes they assign all their interest under a lease, but they often assign just a portion of the lease, or reserve some interest in the property. In the event of multiple assignments — such as when party… Continue Reading
Mandatory Pooling and Unitization in Ohio, Part I: History and Constitutionality
Posted in Contracts and Leases, Mineral Interest, Ohio, Real Estate, RegulatoryLandowners, in certain situations, can be compelled by the state to combine their mineral interest with their neighbors for the purpose of producing oil and gas. In Part I of a multi-part series, I explain the history and constitutionality of this practice. What is Compelled Participation? “Compelled participation” is the term I will use throughout… Continue Reading
Who Owns the Mineral Rights on My Property?
Posted in Contracts and Leases, Mineral Interest, Ohio, Real EstateAs oil and gas companies flock to eastern Ohio to take advantage of the Utica shale play, trying to figure out “who owns the mineral rights” continues to be a difficult and increasingly important question. As noted in a recent post, Ohio title insurance companies are excepting from title insurance policies the ownership of the… Continue Reading
Is Gas a Mineral?
Posted in Contracts and Leases, Mineral Interest, Real EstateA case pending before the Supreme Court of Pennsylvania considers a question that seemingly has been settled in that state for 130 years: Is gas a mineral? In Butler v. Charles Powers Estate, Pennsylvania’s highest court will consider whether rights to natural gas produced from the Marcellus shale should qualify as “mineral” rights under an… Continue Reading
Kansas Reverses Course; Royalty Interests Reserved in the Grantor Vest Immediately
Posted in Mineral Interest, Real EstateThe Supreme Court of Kansas recently decided an interesting oil and gas case. The opinion in Rucker v. DeLay, 289 P.3d 1166, (Kansas, Oct. 19, 2012) contains an intriguing analysis of future royalty interests vs. mineral interests. Though the decision has interesting legal implications, it should be a practical lesson for those trying to convey… Continue Reading
Life Estates: Oil and Gas Law Implications
Posted in Contracts and Leases, Mineral Interest, Ohio, Real Estate, Tax issuesLife estates have been recognized as an interest in land at common law since the Middle Ages. Even so, how they relate to the ownership of and payment for oil and gas can result in outcomes that may not be intuitive. According to common law and statute, there can be no gap in the perpetual… Continue Reading
Ohio House Considers Proposed Legislation To Change Ohio’s Oil and Gas Regulations [UPDATE]
Posted in Mineral Interest, Ohio, Real Estate, RegulatoryThis week the Ohio legislature takes on a busy legislative schedule after the holiday break. Among the many pieces of legislation getting attention are five bills pertaining to the oil and gas industry. These bills, all of them Democrat-sponsored, are up for hearing before the House Agriculture and Natural Resources Committee this week. While no… Continue Reading
Oil & Gas Terms… Confused? You aren’t the only one
Posted in Mineral Interest, Ohio, Real Estate, Regulatory, ShaleThe terms “pooling” and “unitization” are often used interchangeably. To confuse the matter further, in Ohio, there are statutory definitions for a “pool” and a “drilling unit” and neither is related to a “unit.” Hopefully, this will provide some clarification. Pooling and Unitization, Generally To “pool” [the verb] is to combine multiples into a common… Continue Reading
Conveying Fractional Mineral Interests – The Duhig Rule
Posted in Contracts and Leases, Mineral Interest, Real EstateLast month, we posted about issues that can arise when a landowner conveys or reserves a fractional mineral or royalty interest. In addition to questions about the amount of the interest an imprecisely drafted document conveys or reserves, previously granted or retained fractional interests can create conveyancing issues as well. Consider the following scenario: Suppose… Continue Reading
Oil and Gas Pipeline Companies Can Condemn Private Property in Ohio
Posted in Exploration & Production, Mineral Interest, Ohio, Pipelines, Real Estate, RegulatoryIn Ohio, private pipeline companies regulated as common carriers or public utilities have the power of eminent domain to “condemn” or “appropriate” private property in certain situations. It is well known that the power of eminent domain is available to government authorities. But, the reality of modern America is that carefully regulated private companies, not… Continue Reading
USGS Confirms Potential of the Utica Shale; Finds Ohio Shale Oil “Sweet Spot”
Posted in Exploration & Production, Mineral Interest, Ohio, Regulatory, ShalePart of the mission of the Energy Resources Program of the United States Geological Survey (“USGS”) is to determine the location, quantity, and quality of U.S. mineral and energy resources. In pursuit of that mission, the USGS recently conducted a survey of the potential of the Utica shale across the Appalachian Basin. The results of… Continue Reading
Who Should Regulate Oil and Gas Operations, National, State or Local Government?
Posted in Mineral Interest, Ohio, Pipelines, Real Estate, RegulatoryLaws and regulations are adopted at all levels of government. The scope of coverage and the need for uniformity normally dictate the jurisdictional level of regulation. But, when the objectives of federal, state, and local governments conflict, legal battles erupt under the rally cries of “federalism,” “states rights,” “home rule,” “preemption,” and “constitutional rights.” Some… Continue Reading
Oil and Gas Surge Impacts Title Searches and Policies of Title Insurance – Part Two of a Two Part Series
Posted in Contracts and Leases, Exploration & Production, Mineral Interest, Real EstateAs I touched on in a recent post, the surge in oil and gas exploration and the accompanying concern with mineral rights and interests have created significant challenges for county recorders and title insurance companies across the state. The strong demand on county offices (often in counties still feeling effects from the recession) for time… Continue Reading
Contradiction In The Ohio Dormant Minerals Act
Posted in Contracts and Leases, Mineral Interest, Ohio, Real Estate, RegulatoryInconsistencies and ambiguities in the Ohio Dormant Minerals Act, Ohio Revised Code § 5301.56 (the “ODMA”), set the stage for legal battles that are just beginning. Oil and gas operators may get caught in the crossfire. Operators need to be aware of at least one glaring inconsistency in the current version[1] of the ODMA that sometimes… Continue Reading
SEC Adopts Final Rules Requiring Payment Disclosures by Resource Extraction Issuers
Posted in Mineral Interest, Regulatory, SecuritiesThe Securities and Exchange Commission (“SEC”) recently adopted a final rule pursuant to Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) requiring resource extraction issuers (companies engaged in the development of oil, natural gas, or minerals) to disclose in an annual report information relating to any payment made by the… Continue Reading
Oil and Gas Surge Impacts Title Searches and Policies of Title Insurance – Part One of a Two Part Series
Posted in Contracts and Leases, Mineral InterestGiven the surge in oil and gas exploration, mineral rights and interests have taken center stage in the offices of county recorders and title insurance companies throughout Ohio. The demand for time to search the official record in Ohio counties, as well as the uncertainty posed by purported mineral severances, oil & gas leases and/or… Continue Reading