ohio dormant mineral act/is my lease considered void

are there other people out there who signed a lease with chesapeake who received a letter about ohio dormant mineral act. 

 i have 2 parcels of land in cadiz ohio, harrison co.  one parcel is 64 acres and is held up by the ohio dormant mineral act.  ive finally found an attorney to help me, thats a another story!  the other parcel is 1.21 acres and chesapeake sent me a check for that one,  but it was dated sept 20 2011, and the lease ended sept 8 2011.  i havnt cashed the check and i am in the process of returning it to chesapeake. 

the bottom line is i havnt talked with many other landowners about this and frankly i dont know what im doing.  im stressed out to say the least. 

 if anyone out there has experienced what im going through, please let me know what you are doing.

 thank you

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Permalink Reply by JK on October 6, 2011 at 3:49pm

Wendy, It appears you are in a good situation.

I would make a copy of the check then return it signature certified.

Otherwise they can take a year to acknowledge you did not cash the check.

Then I believe the lease is not enforced and in effect.

Dates matter as we all know. You may want to write a letter to this effect to them.

I bet they will get in contact with you. 

Permalink Reply by wendy on October 6, 2011 at 3:57pm

thank you for the info.  i am definitly taking your advise.  its really difficult to know what to do when things like this happen.  im am happy and relieved to have found this website. 

Permalink Reply by Marc on October 6, 2011 at 4:49pm
I would suggest getting in touch with attorney Owen Beetham for any questions about oil and gas in Harrison county. His office is on Main St. in Cadiz, next to the Western Auto building.
Permalink Reply by wendy on October 8, 2011 at 4:34pm
hi marc i contacted him a month ago but he is really busy  i finally found an attorney in alliance to help with the ohio dormant mineral act.  wow all attorneys swamped with this stuff.  thank you for the suggestion
Permalink Reply by Finnbear on October 12, 2011 at 11:47am
How exactly is the parcel "held up by the ohio dormant mineral act"? Were the gas and oil rights severed away from the surface ownership at some point?
Permalink Reply by wendy on October 13, 2011 at 1:43am

when chesapeake did the due diligence title search they came upon a clause that stated- in march of 1956, that the mineral rights to one of my parcels (64 acres)was reseved to someone and i may be able to get them back under the ohio dormant mineral act. that letter was sent to me and dated aug 29th 2011 and it  stated  that i have 45 days to solve this matter.   my other parcel (1.21) acres on same property was just fine and i received a check for that one dated sept 20th 2011.  my lease was expired on sept 8th 2011.  other people in my area of cadiz bought from the same man out of the same piece of land i bought from and they have their mineral rights. 

 

i returned a certified letter including the check back to chesapeake.   my understanding was that my lease was null and void and i was free to sign through someone else or renegotiate a better deal with chesapeake.

 

today i received a call from scott tomilson from chesapeake who informed me that i was not allowed to sign with anybody else nor renegotiate with them.  he stated that i would be hearing from their attorney because i am signed with them and they will be returning my check for 1.21 acres.  scott also stated that i recieved very bad advice.  hahaha!  i dont know why that makes me laug, but it does!  anyway i called my attorney and he is looking into it.  i will keep you all posted.  this could be very interesting!

 

Permalink Reply by Jim Litwinowicz on October 13, 2011 at 9:52am

I am no expert on the Ohio dormant gas rights laws but from what I understand, after 20 years has passed with no activity on those rights, you can file to have the rights returned to the surface owner. It requires advertising the filing and a follow up hearing. I believe you have to first make an attempt to find the owner of the rights or his/her heirs.

One caveat, when the rights were severed from the surface, the owner could have filed for a separate tax ID or parcel number which would make the separation of the rights permanent, I think.

Much of this is unique to Ohio and you need a good attorney that knows the law.

Good luck!!

 

Permalink Reply by Finnbear on October 13, 2011 at 10:48am

No hearing required. No courtroom involved. BTDT.

Steps to take are:

1 - Do the title work and determine who reserved those rights

2 - Publish the notice per ORC instructions

3 - Wait 30 days

4 - If no response to the notice, file an "Affidavit of Abandonment" with the county recorder

5 - Wait another 30 days and if still no response, the county is required to memorialize (permanently and publicly file) the affidavit which legally vests the rights back to the surface owner

This is the process in a nutshell. Read ORC 5301.56 and related sections for the big picture.

Permalink Reply by Finnbear on October 13, 2011 at 10:05am

You need a good oil and gas attorney RIGHT NOW. You may be able to get your oil and gas rights back through the Ohio Dormant minerals act BUT it takes a MINIMUM of 60 days to complete that process IF you start today and have everything ready to publish and file immediately. Since you didn't have the title work done ahead of time and know about this issue before signing the lease, you won't be done in 60 days. On average, it will take more like 3 months to complete. Today you should go read Ohio Revised Code 5301.56 Mineral interests - vesting in surface owner. and read it over and over again until you fully understand it. Speak to your attorney about it and how it applies to your situation and if they don't immediately know what you are asking about, go find a more oil and gas experienced attorney. The lease you signed on the 1.21 acres probably has language that requires both parties to move forward with the lease IF the title work comes back OK which it obviously did on the 1.21 acres since they sent you the check. You signed a contract with them and you are now legally bound by whatever is written in that contract and you better understand it. Hopefully you did not sign a lease that said YOU would warrant title or you will be required to do so at your expense or be in breach of contract. The contract you signed with CHK probably allows them to extend that Sept. 8 expiration date if they discovered title issues before that date.

Go see a GOOD oil and gas attorney - NOW!

Permalink Reply by wendy on October 13, 2011 at 5:25pm

wow!  you guys are so knowledgable.  thanks to all of you for the sound advise.   i really appreciate it.  im feeling much better now that i have found this site, its been so helpful.

i am confident with my attorney.  he is really busy doing title searches for me and other landowners.  he told me that he has never seen anything like this.  its crazy!

im not totally unhappy with my lease with chesapeake, but at times when i get to thinking about it,  and all the money they will be making,  i wish i would have gotten more money.  i dont mean to sound ungrateful and whatever i get is better than what i had before this.  it just blows me away to hear the amount chesapeake is offering now.  its has doubled since i signed a few months ago.   they were telling us we had to hurry because this was it -they were closing the deal and nobody was offering better.  i feel dupted a little.  i guess its just human to feel that way.  i dunno.  im not gonna loose sleep over it.  ive spent enough time and energy on this already.  :)

Permalink Reply by Hunter on October 13, 2011 at 5:38pm

What happens with the 64 acres if she gets them back thru the dormant mineral act, will they be held under the original contract or will those be able to leased separately? Technically she did not own them at the time she with chk.

Permalink Reply by Finnbear on October 13, 2011 at 9:49pm
If the lease that was signed included language that said the lessor would warranty title, CHK may well be entitled to them. There is some gray area here and a consult with an experienced oil and gas attorney is in order. CHK has legions of excellent oil and gas attorneys and you can bet that if they want this lease, they will probably get it. They have the most aggressive lease acquisition division of any oil and gas company out there and this is how they got so big.

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