Lawsuits in Ohio and Supreme Court of Ohio regarding Mineral Rights Holders

We received a lease check from Hess Oil last year as a payment for a five-year lease. Now they are drilling, but we are not receiving a royalty check. We have been told the oil companies in Ohio are holding royalty checks for those who own mineral rights but do not own the surface land. We are told they are waiting to see who gets the money until the State of Ohio Supreme Court makes a decision on if the recipient will be the mineral rights owners or the land owners. Does anyone have further information on this? Here we are paying mineral rights taxes to Harrison County, yet we may not even get any money from our mineral rights! If you have information, we will be most appreciative. 

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Permalink Reply by Dott on April 15, 2015 at 6:55pm

The tax on Minerals is something new that some Counties are assessing to people who ONLY own the Mineral Rights.  They feel that the Surface owners have been paying Property Taxes and so should the Mineral Rights owners. Some Counties are assessing only when there is Production but others are beginning to see this as a new revenue stream thus they are working at new taxation on Mineral Rights WITHOUT production.

And to Rita's comments on the one tax bill for the entire property (family owners). Tuscarawas County told me the same thing, that I will receive the bill and  have to collect from everyone else. I told them that I have no idea where the person who owns the other 1/3 even lives. My father completed that transaction years and years ago and that family has since relocated with no forwarding address. I asked the County Office what would happen if the 1/3 Mineral Rights owner doesn't pay his share, and they could not answer my question. Why should it be my responsibility to hunt that person down? That also is just not right.

Permalink Reply by RITA KERR on April 15, 2015 at 7:21pm

Dott, thank you for your response. Do you have a copy from the oil company you are signed with of the survey paperwork? One of the papers from Canter Surveying that we received from Hess Oil has a list of the Working Interest, which is the three oil companies drilling the Archer well. The same paper shows a list of the land owners and gas and oil royalty owners. The paper I'm talking about was sent to us in an email as a pdf file. At the top of the page is our well, Archer A 1H-31. The three parties, oil companies, surface owners and oil and gas royalty owners, are in three separate tables centered on the page. I thought this description might help you find the right one in your documents to find out who the other mineral rights owners are in your case. It seems to me that the Treasure's Office in Tuscarawas County would have the name and contact information for the other owner. If they were notified by the oil company and signed a lease, that information should be in the Office's records. Best of luck in this.

Is your well producing? Ours has been in production, but the funds are being held by Hess Oil until the Ohio Supreme Court makes a decision on whether we or the surface oil gets the royalties. We were the ones who got the five-year lease rent from Hess Oil, but now they are in a quandary as to who get the royalties. 

Permalink Reply by Dott on April 15, 2015 at 8:42pm

Rita, We are only leased, not producing so I do not have that Paperwork from the Oil Company, however thanks for the tip. I do know the name of the other owners but

the last address on the County Website is not accurate. But maybe if I call and request updated information they may have something recent.

Hope all goes well for you in the Court's Decisions.

As for Paul's question I do not know the answer but when I inquired about the amount (an estimate) of the tax they would propose it was not much at all. I believe it was based on a percentage of the total property tax, and they said the Surface Owners may actually get a reduction.

Permalink Reply by Paul Butler on April 15, 2015 at 7:28pm

I understand the taxation of the surface owners, they are occupying/using the surface.  That's reasonable.

Until minerals are leased, the value is unknown. How is a value assigned for tax purposes?

Permalink Reply by RITA KERR on April 15, 2015 at 7:36pm

That is a very good question, Paul. I'm not sure how they assign value. Any one else know the answer??

Permalink Reply by williet57 on April 16, 2015 at 11:06am

I called the Harrison County Treasurers office this morning,they said the tax assessment value is $300 per acre for a undrilled  leased land.Never heard of this until I read this post 

Permalink Reply by Ronald L. Rohr Jr. on April 17, 2015 at 2:49pm

I just called the Harrison County Treasurers office and they said the taxes would not be put on until you were recieving money for your minerals from the oil company seems like we are getting alot of information that makes no since or they just don;t know and tell us what they think we want to hear.

Permalink Reply by Mark Anders on May 4, 2015 at 3:47pm

You would have to do a quiet title action if you want that 1/3rd back. Also the Landman trying to lease your rights should be able to find them for you. 

Permalink Reply by RITA KERR on April 17, 2015 at 11:57pm

Ronald, that is interesting information, Harrison County Treasurers office stating taxes would not be charged until we are receiving money for the minerals. We have been paying taxes to Harrison County for two years. We did receive rent money for our mineral rights, but Hess Oil is holding all income from the natural gas and oil, awaiting the Ohio Supreme Court's decision. If we are not getting that oil and gas money, I wonder why we are being charged taxes? 

Permalink Reply by williet57 on April 18, 2015 at 4:35pm

Like I posted  a couple posts ago,when I called the Treasurer office they told me that it does not matter if it has been drilled and producing,or the rights have just been leased and nothing done yet ,the owner of the mineral rights will be assessed $300 per acre.We have not received a tax notice. It has only been 1 year since it was leased and it is still in probate,but she said that the lawyer or executor should have received a bill

Permalink Reply by Joseph-Ohio on April 18, 2015 at 6:08pm
The way I see it, if it's 'leased', the 'owner of the mineral rights' would be the 'lessee' not the 'lessor'.

As I read Ronald L. Rohr Jr. above there's no assessments in Harrison County (guessing any Ohio County as well) if unleased.

Wondering what kind of taxes RITA KERR is paying ?
Permalink Reply by Craig Cooper on April 18, 2015 at 7:37pm

Joseph,

It's the other way around: http://www.investopedia.com/terms/l/lessor.asp

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