Old lease that a company still thinks they have

I signed and got paid on a lease almost 2 years ago. I recently got a letter in the mail from an O&G company saying that they were unaware that the ownership of the interests had changed. I have owned the land for about 13 years. They say that they have a lease from 47 years ago from their predecessor company and that 44 years ago my acreage was included in a drilling unit of 60 acres. They say that the royalties have previously been paid to Mr X. To my knowledge there isn't a well within 60 acres of my land. They are requesting my ss# because the IRS needs it for persons to whom they pay. They included a W2 form for me to fill out and return, saying if I don't they are required to withhold 28% of their payment. I did try to call the company but they said I could only leave a message on a machine and someone would get back to me. They wouldn't let me talk to a person at that time.

Since I'm almost positive there isn't an existing/producing well, I'm not sure what to do with this. Any advice or ideas are great appreciated.

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Permalink Reply by RAYMOND bAUMAN on October 29, 2013 at 10:50am

The first step should be for the producer to provide you with a copy of the lease. Then you should check your title to see if the minerals were ever severed or reserved  in your  chain of title.  The standard unites in ohio ar based on well depth. 20, 40 and 80 acres. see ODNR rules for the required acreage but the leases may include larger unites.  Never provide SS # or bank account information.  If you get no response see a good real estate lawyer or your title insurance company.  If the minerals were severed from the surface estate they could have been retained with the rest ( lager parcels) of a previous owner.

 

Have them ( the producer) provide you with a recorded copy of the lease, well plat and compare them to the lease on record in the courthouse and  the plat on file for the well in DNR records.   Then get good legal advice from a knowledgeable attorney on a set fee basis.

Permalink Reply by RO on October 29, 2013 at 1:56pm
So I went to Ohio DNR website, entered the API# and an indicator showed up in the middle of my property with the well info including saying the well is producing. We have been all through our land and there ISN'T a well on our property. When I was researching this, I came across a permit application dated 1986 requesting to plug and abandon the well. A few days later there is a form filled out saying the application for section code 108 (stripper gas) is "affirmative" and notice sent to applicant. Other dates are filled out: protest date, reconsideration date, and appeal date; protest received from "none" and reconsideration requested "no." Another note of interest is that on the annual production report there are gas and oil figures for 1985 and then nothing until 2002 where under gas is the number 19?????
Any help appreciated. Thanks
Permalink Reply by Nancy Mosley on October 29, 2013 at 2:00pm

I hope someone from Ohio can help, but I think you could inquire to someone in the Ohio DNR about this situation, and find out what they think. 

Permalink Reply by caualie on October 29, 2013 at 5:58pm

  Yes, I'd write to ODNR & simply ask for all records for well # whatever it is, & say nothing more for the time being & see what they send you. I don't know how many acres you have, but producing gas wells are somewhat hard to hide. Sounds like maybe an old well was once there & was plugged & abandoned years ago & the site restored. Just a guess. This smells very bad & I certainly wouldn't cash any checks they may send, just hold onto anything they send you & see where they go with it, while doing a little research on your own with ODNR & maybe the title guarantee company who did the work when you bought it. Any neighbors get any similar letters ? Just keep in mind that there are a lot of very clever people around who will do most anything to make a dollar as long as they don't have to get up & go put in a days work.

Permalink Reply by bo boboski on October 29, 2013 at 10:39pm

they call them --politicians--

Permalink Reply by Steven A Joliat on October 30, 2013 at 3:46am

While the status may be producing, that may not meet the legal requirement under the dormant minerals statutes for production.  If the production record shows several consecutive years of 0 reported oil and gas since 1986, you may have your mineral rights under the dormancy rules.  Whether the filing for stripper well status affects your claim is a question for a lawyer with oil and gas experience.  If the abandonment order was signed by a state official, I believe the old lease would be cancelled, whether the well was properly abandoned or not.  You could discuss your findings with your current lessee who has paid for your most recent lease to get their opinion, depending on the lease terms, they may be the ones who would proceed in court.  However, if it were me, I would discuss this with a lawyer who is representing my sole interests first.  It may be extra expenses, but an experienced oil and gas attorney should be able to tell you whether the alleged old lease is valid, or if this is a land grab attempt.

Permalink Reply by James Foster on October 30, 2013 at 8:16am

Did you see any indication of the current owner? Using GPS coordinates can you find any remnants such as pipe etc where the well was. Call ODNR and see if the well was actually plugged. Ask the inspector from ODNR in your area to meet you at site and see what you can find. You need plug and abondoned confirmed. If it has not been pluggeg then you need to demand that current owner plugs it and updates ODNR status.

You need a copy of original lease. You can find that in recorders office. Staff can help you. It needs to be stamped released. Current well owner must do this. ODNR inspector or someone in office can explain the other papers you described.

Current owner may be on well card. If they are who applied for plug and abandon. and also if you can follow lease trail in recorders office ... old lease not your current one the owners name will be there.

We had similar issue with well from the 70's that said producing on odnr map but it was not. Lease was not stamped released. Three plug and abadon permits on file. Company told us they find well. We said bs meet us there we will find it for you dumba$$es. We did get ours fixed w/o attorney.

Permalink Reply by James Foster on October 30, 2013 at 8:26am

Also do you mind saying what county? Someone on here may be able to help with recorders office. I am pretty familiar w two counties.

Permalink Reply by RO on October 30, 2013 at 1:49pm
Land is in Stark Co. It's about 22 acres and we've been all through land many times. There's no way it's on our land. The old meter base is on our land but there isn't a meter or wires on it any longer and there is a broken pipe sticking up out of the ground several feet away.
Permalink Reply by James Foster on October 31, 2013 at 5:06am

Talk to ODNR. Confirm it was never plugged. I am assuming the company you got letter from is new owner. These companies aquire leases in big bunches and they get some like yours with dead wells. They do not like plugging them because it costs money. Once you confirm it has plug and abandoned that was never completed at ODNR you TELL them dont ask demand the plug and abandoned be completed. They will need to get a new permit as the old one is expired more money for them. Our well had three plug and abandon permits on file at ODNR that had never completed then a fourth that was actually completed. Demand they update the status on ODNR. File release in recorders office. Reclaim any damage to land while doing the plug. Put in writing certified letter. Also talk to neighbors as you have 22 acres of a sixty acre lease. They may have been approached too. Our well was 160 acre lease smaller drilling unit, well on neighbors property because uncle died and land was split up then later sold. The activity near our well was brought to our attention by another neighbor who saw the company out there bringing a tank and other equip yo the site. We shut them down fast. Our well and still "active" lease affected about 10 neighbors potentially. When I got the lease marked released I sent a copy to these neighbors. I knew my uncles name and knew he signed the lease so finding the original was easy for us. Do you have any names of previous owners.

Permalink Reply by RO on October 31, 2013 at 2:03pm
Yes we do know who previous owners were. The mail we received is from Enervest. Are you saying they may have acquired the lease from who we leased to (and that's who you're calling the new owner)? Someone else on here has a post about Enervest's venture in Stark & Tusc Co. but this letter is talking about an old well not a potential new one.
Thanks for your help!
Permalink Reply by James Foster on October 31, 2013 at 4:30pm

I am a little unclear about "owner". You signed a lease. With Intervest or someone else?
You said Inervest sent you a letter about a well and previous lease that is not active but apparently well has not been plugged and lease has nof been released.
How did the company you leased with recently miss this?
I guess my point is the "owner" of said well must plug it. If this well was used at ond time by landowner for domestic gas could he have purchased it ... challenged the plug and abandoned .... you mentioned a challenge to something. If so that landowner is the well owner and must plug it.
ODNR Inspector can help you I think. Ours was helpful. On odnr oil and gas website on left hand side click on contact and about us. Click on field inspectors. Click on your county. Email addresses are given.

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