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 Billy Park Whyde on April 28, 2015 at 12:22am

 Last I heard which can be corrected is the famous Buel Well that CHK bragged about was a legal mess. Where Mr buel had bought the property without the mineral rights as they were leased to a coal company. The coal company then leased to CHK.  Now there were some other legal actions in the matter but my last info i heard was the court ruled that the coal company's lease had expired making the lease to CHK  void!

 So i surfed around a bit and it looks as if the Ohio Supreme Court will have to make a ruling on it. Seems as if they want to call a lease expiration a savings event.  Hmmm

Permalink Reply by Robert and Valorie Fulton on April 28, 2015 at 5:57am

We bought our property in the early '90s. We paid more than the asking price for the land because we insisted on getting all the mineral rights. There is NO QUESTION about us owning ours!! I can thank my Dad for that. He knew someone who had had a problem. He told us to make certain to get the rights!!

Permalink Reply by RAYMOND bAUMAN on April 30, 2015 at 8:57am

Check out the discussions on Dormant mineral act on here a decision has been made but it is also unclear. We have been a producer in Ohio and Michigan and Michigan's DMA went to US Supreme Court for a decision so it will be a while if I was a Royalty owner I would Join  The Ohio Oil & Gas Assoc as a royalty owner or chose another Ohio Royalty owners group.  If you want some information on the cases I would contact one of the law firms involved  in the Supreme court case. They OOGA have made some sense of the current standings in their newsletter.  Only the Two cases were  clearly decided by the Ohio Supreme Court. So it will come before them again.   If you must have your royalty see if you can have the Oil co held harmless . Another suggestion is to have the oil co pay and deduct the royalty 's taxes AS THEY ARE THE SAME FOR WHOEVER IS THE ROYALTY OWNER..  On our small Clintion wells I pay all the tax for the landowners but it is a small amount. PS for the taxing of the undeveloped ( non producing mineral rights) I would ask the auditor if the court  decides that you don't own the royalty will they pay your money back?   Contact you state REP or Senator and ask them to make the taxing of undeveloped minerals illegal. Another reason to join OOGA or the like. PS OOGA is the strongest industry lobby in Columbus. Check Them  out on OOGA.org by the way this group has been  considerate OF BOTH THE LANDOWNER AND PRODUCER SINCE ITS FOUNDING

Permalink Reply by RITA KERR on April 30, 2015 at 9:43am

Thank you, Raymond. You state a decision has been made. I was told the Ohio Supreme Court starts oral arguments regarding the cases being brought before them on May 6. Oral arguments, we have been told, could go on for perhaps weeks. You are correct in saying decisions have been made but are unclear. The Supreme Court is suppose to decide on which decision is the one they are going with. Thank you for your suggestion of joining the Ohio Oil and Gas Association. We definitely look into it. From records we have received it appears our well is now producing. I appreciate you comments and suggestions. Be blessed, Rita

Permalink Reply by Joseph-Ohio on April 30, 2015 at 11:21am
It occurs / appears to me (these days / at this point in time) there is benefit to being unleased in the Utica (setting aside being force pooled / force unitized into a deficient leasehold with an unwanted and surprise tax burden).

Personally, I can't see how such can be forced upon any land / mineral rights owner / become legalized anywhere in our country.

What do you think / how do you folks see it ?
Permalink Reply by Billy Park Whyde on April 30, 2015 at 12:21pm

Personally I believe in the rights of property owners. I might not agree with what a neighbor does with HIS PROPERTY but it is HIS or HER's PROPERTY not mine.

Permalink Reply by Joseph-Ohio on April 30, 2015 at 12:25pm
Billy,

How do you feel about a neighbor's decisions being forced upon you / your property by government and worse, perhaps burdening you / your property with tax ?

That's what I'm writing / inquiring about.
Permalink Reply by RAYMOND bAUMAN on April 30, 2015 at 1:47pm

How about one person with 2 acres or the  unknown heirs of john doe holding up  development of 1280 acres of willing landowners rights to develop their minerals. There has to be a method here somewhere to allow others to develop their minerals  and not let one party with a minor interest hold up  all the landowners in two sections or more. Forced Pooling is an established practice  in he oil and mineral industry since a well on you neighbors property can produce your minerals. Hey if a oil man could drill through your land without compensating you.  You would scream  about it and sue.  On a forced pooled property there is not allowed any surface disturbance. Every state and most county roads  require some unitization and the public good  is a factor. Even an oil Company leases and existing  wells can be forced pooled ( it is Called Unitization)  and my wells have had this done in Michigan.

Would you like your oil and gas royalty held up because  an  obstructionist will not sign a lease for a small less than one acre parcel?  If you are forced pooled you could even participate in the well.

Permalink Reply by Joseph-Ohio on April 30, 2015 at 2:11pm
I can agree that 'minor interest' landowners shouldn't 'rule the roost' but government should not impose taxes on land / mineral owners because (for instance / hypothetically) a majority of 'pooled' lessors agreed to a lease without an 'ad valorum' clause or other lessor punitive measure.

I can also agree that there must be a way to accommodate both sides of the issue.

Perhaps any leasehold agreement involving 'forced pooling / forced unitization' would also be automatically amended to include landowner / lessor protections from such abuses ?
Permalink Reply by Billy Park Whyde on April 30, 2015 at 2:26pm

 The catch to forced pooling is it is not Eminent Domain! In no case should anyone's land be taken or used without fair value. A lease agreement should no less than what the highest  lease rates at market price along with percentage along with the best worded lease not a boiler plate thrust upon a person.

Crap such as being forced to be a part owner of something you don't want, having a liability placed upon you and more is bull. It is of further insult that a bureaucrat not even voted upon by the public can make a decision effecting a persons property without due legal process.

  Sorry Raymond but even  a land owner with two acres has rights and if they care not to be involved that's their right.

  I might add if the O&Gs don't clean up their act their will be more resistance to drilling as CHK seems to be making a very bad impression to land owners.  

Permalink Reply by Joseph-Ohio on April 30, 2015 at 2:52pm
Billy,

I can easily agree with what you've written and do.

However, forced pooling / forced unitization are already enacted in Ohio and other tresspasses are being contemplated / deliberated as I understand.

What's the remedy ?

Only thing I can come up with is described above. But, that would only afford a modicum of protection for those whose lands are unleased and 'force pooled' / 'force unitized'.

Pretty much of a mess should you ask me.
Permalink Reply by Joseph-Ohio on May 7, 2015 at 11:26pm
Why shouldn't 'forced pooling' / 'forced unitization' be treated as 'eminent domain' siezures and Ohio landowners paid by the State for their loss of a portion of their rights of private ownership ?

Seems to me 'valuable consideration' has been siezed from all Ohio landowners by State legislation and without 'fair market value' compensation. Personally, I've always thought about it as an uncompensated siezure.

Like magic.

Wave the State's legislative magic wand at landowners and they lose their right to determine the disposition of what they own.

What am I missing here ?

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