Placing a rig on a parcel of land in Ohio not included in the drilling unit.

Included in the 4000 page budget bill passed in Ohio in September of 2011 was a law that states that a drilling rig for horizontal drilling can be placed on a parcel of land not included in the drillinlg unit. The following is a link to that law. http://codes.ohio.gov/orc/1509.022 I fail to see who can benefit from this other than the gas and oil companies  It looks to me like those of us with old leases that state that another well can be drilled under the terms of the old lease can get a rig on our property and end up with no spud fee and no royalties. What do others think?

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Permalink Reply by Kathi Albertson on September 29, 2012 at 2:14pm
Thanks Jack. One reason for our concern about this issue is that several of us are HBP with these old leases on parcels of land adjacent to state parks in Ohio. We have been told by people at the Division of Gas and Oil that the plan for taking oil and/or gas from state parks, when they get to it, is to not drill on park property, but under from adjacent property. Although we are not totally opposed to the idea, and see it as a compromise for those absolutely against drilling in the parks, we don't want a rig on pur land without being able to be part of the negotiation. We would hope that it would be amicable and mutually beneficial but Orc 1509.022 came to us as a big surprise.

BTW, what does IMHO mean?

Kathi
Permalink Reply by Jack Straw on September 29, 2012 at 2:21pm

In My Humble Opinion.

Permalink Reply by Jack Straw on September 29, 2012 at 5:50pm

You have provided us with an excellent example as to why an O&G Operator might need to site a pad on a property adjacent to the planned production unit.

I believe that as long as existing property rights are respected, the O&G Operator would need to reach an amicable agreement with the Landowner; if no agreement, no drilling.

 

I must admit that I do have one fear – and that fear is that over time we risk an erosion of our personal liberties and our property rights. There are many who are jealous of the success and/or good fortune of others. There are many who believe in “redistribution” from the more fortunate to others less fortunate or less inclined to make their own way. There are politicians who will pander for the votes of a certain class of voter. There are Oil & Gas Operators who would benefit from fewer individual property rights. There are lobbyists employed by Oil & Gas Operators, lobbyists who are employed to influence politicians in a manner beneficial to their clients.

I fear that unless we are vigilant we will see an erosion of our personal liberties and additionally our property rights. If I have to crawl on my hands and knees, I will make it to the polls in November.

 

All IMHO,

                   JS

Permalink Reply by Butch Ratell on October 1, 2012 at 2:42am

THIS IS HOW YOU GOT MONEY, I WONDERED HOW THEY GOT AROUND THE EXISTING WELLS. NOW I KNOW, YOU WILL GET YOUR ROYALTIES SO LET THEM DRILL. DRILL BABY DRILL.

Permalink Reply by Kathi Albertson on October 1, 2012 at 3:40pm
How do you get royalties if you are not included in the drilling unit? If you are referring to the royalties from the existing shallow wells, that check might buy a cup of coffee but it won't be Starbucks.
Permalink Reply by FXEF on October 2, 2012 at 2:40pm

Kathi,

You must be included in the unit and leased before you are entitled to royalties. The surface well bore and pad does not have to be within the unit, however the lateral and frac perforations must be within the unit. If you own land that is outside the unit the O&G operator must compensate you for the use of your land, but you will not be paid royalties for the minerals drawn from the unit.

Permalink Reply by FXEF on October 1, 2012 at 3:31pm

It's no big deal, other states have been doing it for years. Ohio has just updated their mineral code. 

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