Just suppose a person had a piece of ground on which is located a gas well. Suppose that well is owned by an energy company. Suppose that well is providing free gas to one home that is located on what is now a neighboring parcel, and no other gas. Suppose the ODNR records show production of zero oil, zero gas, and zero brine for the past six years.
Suppose this landowner is trying to terminate a lease written over 90 years ago. Suppose the company owning the well has tacitly agreed that the lease expired by it's own terms about 75 years ago, but this company only acquired the lease last year. Now suppose this company has offered to give up their claim to the lease if the landowner would take responsibility for the well, but refuses to do so if the company is held responsible for the well.
Then suppose the landowner agrees and takes ownership of this well. Is the landowner allowed, under the laws, rules, regulations, or what have you, to continue to provide free gas to the neighboring parcel?
I know you guys are not attorneys, so your reply will not be a legal opinion. I also know ODNR/DOGRM is extremely reluctant to provide a straight answer, probably because they do not want to be hung out to dry for giving legal advice. They talk around it, but I cannot get a basic YES or NO answer.
While I'm asking questions, have any of you heard of splitting a lease based on surface boundaries? The lease in question here has been split by depth and it has seen the oil rights separated from the gas rights. I'm wondering if there is a precedent to separate some of the acreage of the original lease from the rest of it.
That's a really interesting (and long) question. Can you provide gas to your neighbor from a well on your land? I think you need a lawyer for this one because it's sort of complicated. My lay opinion (which carries no legal weight, obviously) is that you cannot provide the gas because you are not a utility company and there are certain requirements (bonding, insurance, etc) that go with that. But I could be totally wrong.
As to your second question, no you cannot separate a lease based on surface boundaries if all the land in question is part of an old lease. The lease goes with the land no matter who owns it there after.
That's kind of annoying. If the lease can be split by depth even though depth isn't mentioned in the document, and it can be split by what is extracted, it would seem only logical that the acreage could be split, too. I mean if you can divide it horizontally, why not vertically?
It can't be split by depth by the landowner unless it is in the lease. Producers can split depth because they hold a lease over all of it.
since you are the owner of the well, you can do as you wish, as it is your well. you can give anyone you want free gas, or you can charge them. It is your gas, your well. why do you feel you need to get vindication from ODNR or any other organization. you are not drilling a well, it is already there. get your gas, give it to your neighbors and be quiet. if you wave a flag long enough, you will get attention, and that attention may not be what you want.
I guess I dont understand the second part of your question enough to answer it.
John makes a good point. If you want to run a pipeline and serve your neighbor some gas, you can. What the legal liabilities are, well, that's a whole separate can of worms. What happens when your neighbor's house blows up on Christmas Eve? The lawsuit to end all lawsuits with you sitting in the defendant's chair. I would get a lawyerr to straighten it out, lest you be on the receiving end of a massive legal headache.
I seriously think you need to ask an attorney. I had a friend who took ownership of a well that was on his property-that provided gas to his business. He had to post a bond and get a very serious insurance policy. Can't provide the details of how or why just know he wasn't happy with what he had to spend to do it.
If you own the well, you can sell or give gas to whomever you want. It sounds like the well needs to be classified by the State as Domestic (DM). I believe the well owner can request the classification change to the State at any time.
I believe when you take ownership of a well you not only have liabilities to consider but the cost of maintenance and shutdown if it becomes unusable, unsafe or is abandoned....My dad told me when he was a kid he was paid to roll up clay balls and drop them down the well to plug them, hopefully the process today is better engineered, and regulated - therefore more expensive. Does anyone know the cost of plugging a well? Also does ODNR continue to inspect domestic wells.?
Okay, here's the situation. I do not own the well. I do not want the well. The lease on the property was signed in 1921. In my opinion, it should have expired in 1936 of its own terms but gas was being produced, so the situation continued. Chesapeake Energy recently signed off on the deep rights and filed a legal document to that extent, stating in said document that the lease expired in 1936. The company that is currently operating the well just acquired it in 2010. ODNR at one point said it is a non-producing well and ordered it plugged.
Now the issue. I want the lease totally gone. The company that owns the well tacitly agreed with the idea, except they do not want to bear the expense of plugging the well, so they would simply give it to me and sign off on the lease. I have no buildings on the parcel and live 3 miles from it.
The property on which the home getting free gas sits (across the road) is now under different ownership, having been sold off in 1985. I offered to give the homeowner a flag lot containing the well for $1, retaining all other rights, such as farming etc. for myself, just making them owner of record of the well so they could continue to get free gas due to the well being contiguous to their land. They refused, not wanting to be responsible for the well, but wanting to continue getting the free gas from it. It was at this point that ODNR issued a compliance order to have the well shut down due to lack of production and improper filing of records.
Now, the well owner and the gas getter are claiming the auction advertising is a legally binding agreement which prevents the company from shutting down the well. There is nothing in their deed about free gas. But based on a single auction flyer and the gas going to the home, ODNR reversed their position and said the well is producing therefore does not have to be plugged. The ODNR production records for the well from 2005 show 0 gas, 0 oil, 0 brine, but ODNR says it is a producing well. Go figure.
There are two reductions on the lease saying the free gas is well rent and is to be paid only so long as gas is marketed from the well. ODNR records combined with a statement from the well owner support the idea that the only gas coming from the well is going into the homeowner line and the former commercial line was shut down in 2005 due to lack of production. There are two pipes coming from the well. One has an open valve, presumably to the home. The other is closed and locked, presumable the formerly commercial line.
So IMO, since 2005, no gas was being marketed and therefore the gas to the home should have been shut off according to the terms in the two reductions. Since 1936, the lease should have been terminated under its own terms since it says "oil AND gas..." and there was never any oil so the free gas should not have been there in the first place when the home was purchased.
I'm stuck with a shallow rights lease and a well doing nothing except taking up space on my land because a neighbor is getting free gas when they shouldn't be. The well owner says it isn't worth upgrading the commercial line as the cost of doing so is far more than the gas that might come from it. I really don't care if the neighbor continues getting the free gas, but I want this lease gone. It galls me that the neighbor isn't willing to accept any responsibility for the source of their gas and that they can keep this long dead lease illegally active and the well and associated tank on my land based solely on an advertising flyer written by a real estate agent 30 years ago.
It is my understanding that if I own the well, I am not permitted to give gas to the neighbor, even if I post bonds and have insurance. I want to know if this is true. I want to know if it is illegal for me to continue to give the neighbor free gas if I take ownership of the well. ODNR basically says they aren't allowed to tell me.
I also want to know if a flag lot containing the well would constitute contiguous property so as to allow the homeowner to get free gas from the well if they owned the well. My offer to sell said lot so as to enable the continuation of free gas and their subsequent refusal of said offer could be important, but only if I am not allowed to give them free gas if I own the well.
Sorry this is so long, but it's quite complicated, as you can see.
Get the producer to release the lease of record. Now it's your well. Plug it in accordance with state regulations. Sign a new lease (which will more than cover the plugging cost). Enjoy your money while your neighbor languishes in his cold, feculent home, sans gas, because he was unwilling to take responsibility for a well that had been saving him from a gas bill for two and a half decades. And get a damned lawyer before you do any of that. You tried to be amenable to other solutions, he refused to be a good partner. It's not your problem.
Attorney involved for about a year now ($).
I simply want to find out, officially, the answer to this simple question: Can the neighbor own and get free gas from a domestic well if that well is on a narrow strip of land about 1/4 mile long connecting the well with the remainder of their land?
I can understand ODNR not being able to give legal advice, but this seems to be a simple question about what the rules say, or even which rule addresses it.
The neighbor has enough land to avoid the $5,000 bond requirement, so this would just let them own the well and enable the free gas to continue until the well goes dry. If we can relieve the current owner of record of the well of responsibility for the well, they would officially agree with us and Chesapeake that the lease is long dead and would then bow out without having to pay to plug the well. BUT, I can't seem to get a direct and simple answer.
Can anyone here direct me to the part of ORC which addresses the situation described herein?