Oil & Gas Law Report

Archives: Other Articles

Subscribe to Other Articles RSS Feed

The dawn of .sucks — protecting your brand

Our colleagues at Porter Wright’s Technology Law Source blog have watched the launch of hundreds of new generic top-level domains (gTLDs) through the past several months. Introduced to increase competition in the domain name market, and enhance the Internet’s stability and security, these new gTLDs are projected to change the face of the Internet and how we use it. Today, our attorneys share an article that should be of interest to anyone with a recognizable brand: The .sucks gTLD entered its sunrise period. What does that mean? If unclaimed, brand owners could wake up to a full-fledged — and completely legal — gripe site come September. Read more

2015-2016 Ohio budget bill proposes severance tax increase

On Feb. 11, 2015, the biennial budget bill appropriating money for 2015 and 2016 was introduced in the Ohio House of Representatives. The bill incorporates Gov. Kasich’s proposals, which were released earlier this month in his Blueprint for a New Ohio. Generally, if enacted in its current form, there would be an overall reduction in personal income tax, with an increase severance tax, commercial activity tax and sales tax. This article focuses on the severance and commercial activity tax components of the bill.

Severance tax

The structure of the severance tax would be altered to incorporate an average price — the spot price — into the calculation of tax owed for extraction of natural resources horizontal drilling techniques. In the bill, a “horizontal well” is defined as “a well that is drilled for the production of oil or gas in which the wellbore reaches a horizontal or near horizontal position in the Point Pleasant, Utica, or Marcellus formation and the well is stimulated.” The new severance tax formula for those horizontal wells would be:…

Ohio’s appellate courts wrestle with oil and gas issues concerning domestic relations and dual-agent Realtors

We have spilled a lot of “digital ink” on this blog addressing how Ohio courts have confronted oil and gas disputes about Ohio’s Dormant Mineral Act (DMA) and regulatory/zoning matters. As we noted previously, there are no less than five cases now pending before the Ohio Supreme Court about the DMA, presenting some 15 propositions of law. And the court still has not ruled on the long-pending Munroe Falls appeal, which addresses the extent to which municipalities may be preempted from applying zoning regulations to state-permitted oil and gas wells.

It has been interesting for those of us who practice in the firm’s Appellate and Supreme Court Practice Group to watch Ohio’s oil and gas boom touch other areas of the law, beyond the predictable DMA, leasing, and regulatory contexts. Two recent appellate decisions from Guernsey County – one of which is set to be argued before the Ohio Supreme Court in May – reflect how Ohioans’ interest in valuable mineral rights is affecting other facets of the law.

Is income from an oil and gas lease marital property?

On May 5, the Ohio Supreme Court is scheduled to hear arguments in Kuhn v. Kuhn n.k.a. Cottle. In Kuhn we see the effects of the oil and gas boom in the context of a divorce. Mr. Kuhn owned certain property, including mineral rights, before the parties were married. After their marriage, the husband’s property became the marital residence. Four years into their marriage, Mr. and Mrs. Kuhn …

Health Care Reform Surprise: Obama Administration Delays Enforcement of Employer Mandate For One Year

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.…

Due Diligence in Lending to the Oil and Gas Industry

Lenders venturing into Ohio’s oil and gas industry need to be aware of unique features of the industry and how to conduct due diligence to properly evaluate risk. Successful lenders understand how the maturity of an oil and gas play, unique features of oil and gas assets, and a borrower’s experience can impact risk. Unique lending arrangements can help mitigate risk for all parties. My guest post on Porter Wright’s Banking and Finance Law Report helps lenders appreciate these basic concepts.…

Is There a Right To Appeal an Oil and Gas Drilling Permit in Ohio? [UPDATE: No]

Ohio Supreme Court Rules Drilling Permits Are Not Appealable to the Oil and Gas Commission

The Ohio Supreme Court this week ruled in the case Chesapeake Exploration, LLC v. Oil and Gas Commission, Slip Opinion No. 2013-Ohio-224, agreeing with Chesapeake and holding that there is no right to appeal a drilling permit in Ohio. In doing so, the Court decided that R.C. 1509.06(F) does exclude drilling permits as appealable orders. This means that once a drilling permit is issued by the Chief, it cannot be appealed to the Oil and Gas Commission. You can read the whole opinion (it’s short). 

To learn more about this topic, read our original post.…

Dealing With a Mineral Interest Not Administered as Part of Predeceased Owner’s Estate

You are interested in acquiring a gas lease on certain parcel. When you look at the real property records, however, you discover the record owner is deceased. Now what do you do? Who owns the interests? How do you evidence this ownership?

This issue might be best discussed in the context of an example. Roger Farmer sold his farm, located in Muskingum County, Ohio, in 1978 and retained the mineral interests. That is, Roger “severed” the mineral interest from the rest of the property. He died in 1995 without transferring those interests. He left a will, admitted to probate in Franklin County, Ohio, which left all his property, real and personal, to his son, John.

John died in 2002, also without transferring the interests. There is no record of any will being admitted to probate, or of the administration of his estate. To determine the current owners of the mineral interest, we have to analyze Roger’s will and John’s family situation.…

Lawsuits Over “Fraudulent” Oil & Gas Leases Often Lack Merit

The Ohio shale boom started slowly when a few small companies quietly began acquiring mineral leases for as little as $25 per acre.  This soon gave way to a full blown land rush in the fall of 2010.  But as lease prices skyrocketed through the Fall of 2011, disillusioned lessors who signed before the peak of the market were the ones rushing – to the courthouse to file lawsuits to cancel their leases.

In order to gain leverage and legitimize their lawsuit, lessors frequently allege that their lease is “unconscionable” or they were fraudulently induced to sign it.  “Exhibit A” to these lawsuits is often a technical error in the lease signing or a “fraudulent” statement made by a landman.  There are exceptions, but many of these kinds of lawsuits have no legal basis.…

LexBlog