Ohio Landowners / Lessors / Prospective Lessors - Let's All Be Very Careful

Of course - landowners need to be fairly compensated for the natural gas, oils, and other minerals they own part and parcel of with their purchase of their land as an investment in real estate - we totally agree.

Also landowners deserve a fair marketplace, free of hoodwinking shenanigans we find very prevalent these days.

For instance, the ruse we find both annoying and insulting is the (perhaps) lucrative sounding leasehold offer that never pays the lessor. There are many flavors of that one; sign now or get passed over; sign here for five or ten years and if we sell the lease to a driller / developer / G & O E & P we'll pay you your signing bonus and when the well is developed a high percentage royalty (in this case it appears many have signed their mineral rights into a purgatory waiting for development); then there's the one similar but with landowner royalty deductions (such as real estate tax increases / severance taxes / production costs / post production costs / market enhancement costs / etc.) some (even perhaps all) of which are assigned to be paid by the landowner lessor thereby consuming a great portion or even all of the landowner's / lessor's return.

What good does it do us to sign into such ? It does no good at all if you ask me.

We as landowners have read about it all on these pages. And we've read about how many have had to go to court to clean up the messes these shenanigans / ruses have delivered. Court is an expensive ($ and time) process. In those situations I'm hoping the legal fees are paid by the offending lessees and not by the landowner lessors and that the landowner lessors are awarded meaningful compensation for going through those processes.

Also, in my opinion, it's no good for 65% of a proposed forced unitization action signed up in a deficient lease always to point their fingers at the dissenting landowners unwilling to be forced into a losing proposition. They need to realize that they might have been the ones that tripped up the process.

Also there needs to be a fair way to settle situations like that - far short of courts and penalizing dissenting landowners.

Also, we need - together - all of us - to be wise and thoughtful - and also to show everyone involved that they have greatly under estimated our wisdom.

Also, exercise extreme care in seeking assistance in these matters.  Good help has always been and still is very hard to find.

Good luck to all of us - it is truly a hostile marketplace as I see it. 

What is law now to me represents a great legalized trespass and is not fair to landowners - any and all landowners - and needs to change -all of course only in my most humble opinion as a layman landowner / prospective lessor.

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Permalink Reply by Joseph-Ohio on January 15, 2014 at 4:15am

Another facet / perspective / inquiry pertaining to the forced pooling / unitization laws in Ohio has re-appeared to me and I would like to share it with everyone on these pages.

How is it not an uncompensated seizure (by the State) of the control of privately owned rights to develop ( or to not develop) privately owned natural resources ?

In our instance we purchased / invested in our land with all 'Mineral Rights' (including gas and oils) fifteen (15) years ago. Now control of the sale of the right to develop these minerals  has basically been seized by the State's new set of Laws which did not exist when we purchased our land and 'Mineral Rights'.  We liken this to State Seizure by way of 'Eminent Domain'; except as we understand 'Eminent Domain' owners are paid a fair market value for the property seized.

My problem here is that no landowner that I've read or heard of has been paid / compensated by the State for the loss of their right to sell or not to sell their gas and oil developmental / drilling rights.

Anyone read or hear differently ?

Permalink Reply by patrick on January 15, 2014 at 2:03pm

Eminent domain often pays the tax value of the property not market price.

When  an oil company wanted to lease my property in Harrison coounty I wanted to just be pooled into a unit instead of leasing the property. They paid a premium for me to lease instead of being forced pooled.As for being in a pool now the problem is no one that I know is being leased in Suffield. I had some friends that were offered $2000.00/acre. They held out tor $3,000.00 and with the poor performance of the Hosey well all the money left.

Permalink Reply by Joseph-Ohio on January 15, 2014 at 2:45pm
I was under the impression it (Eminent Domain buy price) normally paid much more than fair market value.
How do you really know what the Hosey Well will produce ?
You have to take the O & G boys at their word don't you ?
Do you ?
Can you rule out choking the well back / being shut-in by choice ?
O & G can do and say anything they want - they own the well - right ?
There'a so much BS flying around the 1st thing that comes to mind when I hear anything is that it must fall into the category of more of it.
The way I see it if the empowered can sling BS and by so doing steal the resources that's exactly what they'll do.
Sickening isn't it ?
Sorry, I see no meaningful oversight the way things are structured now.
I'm pretty bummed out about all of it.
Permalink Reply by patrick on January 15, 2014 at 3:01pm

The output of the well is monitored by the state because they get taxes on what the well produces.

My understanding of forced pooling allows the land owner 100% of profits from his portion of the well after the well has been twice paid for.I have a rose Run  well on my property the paid for itself in less then 90 days. If  I  had 100% of my portion I would  have been much further ahead.

The state isn't going to forgo the income and jobs that are being created.

Permalink Reply by Joseph-Ohio on January 15, 2014 at 3:17pm
Does the State force the E & P to produce at max. output ?
That's a function of the E & P Company's market isn't it ?
The E & P Company's market can be whatever they want it to be can't it ?
Unlike landowners no one forces them to sell anything they don't want to sell do they ?
I'm still bummed bigtime.
Permalink Reply by patrick on January 16, 2014 at 3:14am

I would think that if I  put millions into a well I would do the best efforts to maxamize my investment. .

Permalink Reply by Joseph-Ohio on January 16, 2014 at 3:39am
Maybe that's what they believe they're doing ?
There are a lot of different ways to serve themselves in their own best interest.
It all depends on what they (their BOD) determines to be the best.
Maybe they are profitable enough and think it better to beat up the lessors and the lease market ?
You can't tell unless you're seated on the Board.
Being a true cynic and judging from all the BS flying around, and also accounting for all the latitude afforded them within the prevailing Regulations I'm inclined to believe what they disclose to the public as mostly ruse - you know - SOP - business as usual.
Permalink Reply by Joseph-Ohio on January 16, 2014 at 6:59am
I think, something about Natural Gas and Oil - considering they are finite commodities - is that their value will continue to rise over the long term (unless they figure out a way to convert - for instances - seawater and / or something of unlimited / infinite supply / that is spontaneously / economically renewable to replace them). In other words the longer they wait to sell the more money they will make. If they have enough money to be able to afford to wait maybe that's what they'll choose to do. Once they own the right to develop they can do anything they determine to be in their best interest. Just my 2¢ on how they might see it.
Permalink Reply by Joseph-Ohio on January 16, 2014 at 12:28pm

http://www.ohioattorneygeneral.gov/FAQ/Eminent-Domain-FAQs

A link to the State of Ohio Attorney General's page discussing Eminent Domain in Ohio.

I think it's worth reading.

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