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 Philip Brutz on March 24, 2015 at 11:22pm

Is the well currently being drilled?  You only get royalties after the well goes into production.  Did Hess tell you that they are withholding your checks until the Supreme Court makes a decision?

Permalink Reply by evan on March 24, 2015 at 11:38pm
I was told the same thing in my situation until I got things straightened out. I can definately see companies doing this to save from having to pay 2 sets of people depending on the decision the judge hands down. I know of another situation going on now, companies drilling and they may wait to pay royalties until theirs a decision made.
Permalink Reply by RITA KERR on March 25, 2015 at 7:55am

Evan, is your lease also with Hess?

Permalink Reply by evan on March 25, 2015 at 11:09am
No it's chk
Permalink Reply by RITA KERR on March 25, 2015 at 7:54am

Yes, Philip, we were told there is currently drilling and that Hess is withholding checks until the Supreme Court makes a decision.

Permalink Reply by Philip Brutz on March 29, 2015 at 2:41pm

Back to the original question, is the well in production?  Is anyone in the drilling unit getting royalties?   A well in the process of being drilled does not pay royalties until it goes into production.  Did Hess tell you directly that they are withholding your royalty checks? Have you received a division order? 

Permalink Reply by bo boboski on March 25, 2015 at 12:24pm

Not sure, but you may have this confused with the STATE owned surface of the interstates and like around Salt Fork State Park. They aren't sure yet who gets the royaslties and who actually owns the mineral rights. They original landowners who were forced to give up their land,or the State? Just a thought. I'm sure there are people getting royalties who own mineral rights , but not the surface. This may be something new.

Permalink Reply by RITA KERR on March 25, 2015 at 12:34pm

Bo, I'm not sure of the case you wrote. I question if anyone has recent information on the Ohio Dormant Mineral Act in which there are several cases pending before the Ohio Supreme Court that we have told will be decided simultaneously. As Mineral Rights Holders it seems the state would have at least provided us with a letter stating what is going on, but we have received nothing, just what we have heard via word-of-mouth. Hess didn't even notify us. I would think if we are not receiving royalties, other Mineral Rights Holders who don't own the surface would no longer be paid royalties either. Has anyone heard?

Permalink Reply by jerry lee nichols on March 27, 2015 at 10:34am

well you can't own these rights forever when the surface owners bought their land in good faith. If there has been production in the last 20 years you still have a claim,if not then you do not according to the 1989 act. There has been no production on my land in 60 years but some woman whose ancesters owned rights years ago has tried to file a reserve and that is annoying.

Permalink Reply by RITA KERR on March 27, 2015 at 5:19pm

Jerry, when our land was sold, the mineral rights were never including in the sale. We still own the mineral rights and pay Harrison County tax on the ownership of those rights. The 1989 act took something that belonged to us without notification. When surface owners buy property there is a title search done. At that time the buyer should know that the property they are buying does not include mineral rights. The idea that a property owner gets those mineral rights due to inactivity of the mineral owner is encroaching on the mineral rights owner by the taking of their property. Even though we no longer own the land, mineral rights were retained for our family for the unforeseen future.  The mineral rights were wisely retained for a purpose such as this, that we might benefit, not for the land owner who did not pay of the rights when they purchased the surface land. My father-in-law at age 94, remembers the sale of the land and the reasons why the mineral rights were retained. If land lies vacant for years, it isn't just taken away due to lack of use. The mineral rights owners should have those same rights. With quiet title action, only after the surface owner has made a diligent attempt to locate and notify mineral rights owners or heirs of their intent to purchase those rights should title be granted, by the court, to the person that brought the quiet title. Our dad was apparently not difficult to locate, as we have been bombarded by requests from oil companies to rent or purchase our interest in the mineral rights. Rightful owners should have priority. We did have our attorney file a reserve and for that reason, the oil company paid us for a five year rental. 

 

Permalink Reply by Judy mcdowell on March 29, 2015 at 11:22am
When you purchase property, your new deed will have written on it if the mineral rights are reserved. There is no excuse for ignorance in not reading your deed before signing. My in laws have been in the Harrison area for almost 100 yrs, and their children also. We have been very easy to find, if it was needed.
We feel the mineral rights are ours by the passing down thru the years. The property was used for coal in the past. If an honest effort has been done to find the land owners, then I can see turning the mineral rights over to the land owner, but if someone is paying their taxes on that property, then no. That constitutes someone is aware of that property, and can be found.
Permalink Reply by K2 on April 28, 2015 at 2:04am

In Ohio, oil and gas are taxed at production.  So is coal. But if the other mineral rights (limestone, clay, iron ore etc) are separated from the surface owner, they can be taxed yearly even though no production is occurring.  Each county has their own assessment rate on these other minerals.  The taxes can be quite high on these.  Therefore before you retain them when selling your surface property, you will want to check with your county auditor to understand what the tax implications will be.

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