In our previous two segments on Section 16 lands — Part 1 and Part 2 — we examined the dedication, by Congress, of one section in each Ohio township, usually Section 16, for the support of public education. Initially, while retaining title to such lands in trust, Ohio vested administrative control in township trustees. However, the allocation of authority to the townships did not go well and in 1914 and 1917 the legislature reallocated responsibility to the Auditor of State as administrator of school lands remaining in state hands.
From 1827 to 1917, when the township trustees were authorized to sell or lease school land to private individuals, mineral title typically passed with the fee simple title. However, this practice ended in 1917 when the auditor assumed authority.
The 1917 legislation, known as the Garver Act, was enacted to provide for better administration of school lands. H.B. No. 192, 107 Ohio Laws 357, G.C. 3203. One of the issues was confusion about the status and ownership of leases of Section 16 parcels granted by township trustees. Section 23 of the Garver Act —provided procedure by which someone claiming title could file a claim with the state supervisor who, after public notice and if satisfied that the claim was valid, would execute a new lease. The Garver Act also provided a mechanism whereby a lessee could surrender his lease and obtain a fee simple title. Continue Reading
Porter Wright is pleased to announce a September seminar that focuses on how construction companies can take advantage of opportunities emerging in the oil and gas sector. The half-day event — which Porter Wright is presenting in conjunction with The Builders Exchange of Central Ohio and Shale Directories — is set for Sept. 12, 8am to noon at The Builders Exchange of Central Ohio, 1175 Dublin Rd., Columbus, Ohio 43215.
The “Breaking Into Shale: Construction Opportunities in the Oil and Gas Industry” program features:
- An overview of the Ohio Shale Play, construction opportunities and an update on Ohio permits and drilling
- Gulfport Energy and Caiman Energy will provide an overview of their work in the Utica Shale and discuss how local companies can work with them
- Tips and insight from Kelchner Construction of Dayton about its first-hand experience breaking into the oil and gas industry
- 5 Steps to Success in Shale
- Safety requirements in the oil and gas industry
Though other programs have provided information about what is taking place in the Marcellus and Utica Shale regions, this workshop is geared specifically toward discussing construction opportunities in the industry and how your company can get involved.
As with prior posts about oil and gas leases in bankruptcy (located here and, on Porter Wright’s Banking & Finance Law Report blog, here), this post presents another thorny issue — namely, “Is an oil and gas lease a lease at all?”
Whether an oil and gas lease is a “lease” is significant in the bankruptcy context, because the Bankruptcy Code has several provisions regarding the treatment of leases.
This post considers two cases that interpret 11 U.S.C. § 365(d)(4), which provides that unless the bankruptcy court orders an extension, “an unexpired lease of nonresidential real property under which the debtor is the lessee shall be deemed rejected, and the trustee shall immediately surrender that nonresidential real property to the lessor, if the trustee does not assume or reject the unexpired lease by … the date that is 120 days after the date of the order for relief [(typically, the commencement of the case)]….” The Code further provides that “the rejection of an … unexpired lease of the debtor constitutes a breach of such contract or lease … immediately before the date of the filing of the petition.” Continue Reading
In our first post about Section 16 lands, we provided background on such public lands here in Ohio. We summarized that in 1785, a Federal land ordinance granted one square mile — usually Section 16 — out of every six square mile township to be held in trust by the state and to be dedicated to support public education pursuant to federal law. The Ohio Legislature then began leasing the land, and in 1827 it authorized sale of the land with proceeds going to the “Common School Fund.” Interest from the fund was to be paid to the schools within the townships. See, Dr. George W. Knepper, The Auditor of State, The Official Ohio Lands Book, 2002. (“Knepper”).
In regard to the funds collected from the sale of all school lands, the Ohio Constitution provided:
“The principal of all funds, arising from the sale, or other disposition of lands, or other property, granted or entrusted to this state for educational and religious purposes, shall forever be preserved inviolate, and undiminished; and, the income arising therefrom, shall be faithfully applied to the specific objects of the original grants, or appropriations.” Ohio Constitution, Article VI, Section 1 1
Whether oil and gas drilling poses a legitimate risk for exposure to radiation has been a hot topic of recent debate. Though we occasionally hear anecdotal evidence reported in the newspapers about radioactive drilling waste being rejected by landfills, there seems to be scant evidence that radiation is a common or serious oil and gas industry problem in Ohio. Nonetheless, the Ohio Legislature and Gov. Kasich recently passed new law that all horizontal well operators should understand.
On June 30, 2013, Gov. Kasich signed H.B. 59, the budget bill, into law. The bill created a new section of the Ohio Revised Code — R.C. 1509.074 — which imposes requirements for testing, transporting and disposing “material that results from the construction, operation or plugging of a horizontal well” that might contain unusual levels of radioactivity.
The new law generally requires operators to sample and test such material for Radium-226 and Radium-228, and to dispose of radioactive material “in accordance with all applicable laws.” However, the new law has several important exceptions. An operator of an oil and gas well is not required to perform sampling and testing if: Continue Reading
Congratulations to our colleague Dan Conway, a Partner in our Energy & Telecommunications group, who was recently selected as one of Columbus Buisiness First’s “People to Know in Energy.” Read more
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. Continue Reading
On July 2, 2013, the United States District Court for the District of Columbia vacated Securities and Exchange Commission (SEC) Rule 13q-1, which required certain companies to disclose payments made to foreign governments in connection with the commercial development of oil, natural gas or minerals. The court found:
- the SEC erroneously read the statutory language as requiring public disclosure of these payments; and
- the SEC’s decision to deny any exemption to the disclosure requirements, specifically in the case of countries that prohibit disclosure of these payments, was arbitrary and capricious.
With the Obama administration’s recent surprise delay regarding the enforcement of the employer mandate under the Affordable Care Act, our colleagues at Employee Benefits Law Report have posted a summary. Given the impact to many businesses, regardless of industry, we wanted to take a moment and share the post with you.
We’re interested in your feedback; please do not hesitate to contact either Rich McHugh or me.
Our colleagues on the Federal Securities Law Blog have been tracking new and updated SEC regulations that are likely to have an impact on your business now and in the near future. The compilation of articles in their most recent eBook — SEC Updates: Staying Ahead of the Regulatory Curve — discuss three important SEC regulatory changes: compensation committee rules, conflict minerals reporting and whether companies that use social media to communicate with investors are complying with Regulation Fair Disclosure.
Download the SEC Updates: Staying Ahead of the Regulatory Curve eBook.