Question about a mess

 Here's the deal a tract of land of land  about 100 acres was leased and a well was drilled upon that land. The land was then chopped up into smaller parcels, the lease was reassigned to a  company registered in Ohio as a LTD with fictitious names and later was voided by the Ohio Secretary of State.  The lease recording ends there with that now defunct LTD. However one of the individuals bought the parcel of land where the oil well is located  then bought the well upon his tract of land and is still a producing well.

  A biggie here, he thinks he has the lease but there is no recording of the lease ever being assigned to him. No mention of mineral rights was suggested in any of the chopped up parcel that were sold.

  So whats the answer? Does he get the whole full tract under the original lease that was never recorded as being transferred to him? Will he get 20 acres surrounding the well only freeing up the other parcels to the other land owners?  Other outcomes?

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0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on June 24, 2012 at 5:04am

As the operator the well owner could sell the lease for further exploration, however if there needed to be amendments made (and there almost surely would be given its age) then the current landowners would have to sign for each of their individual parcels.  the lease stays with the land and its royalty rights go to the current owners.

Jim ShoosPermalink Reply by Jim Shoos on June 24, 2012 at 5:09am

Not necessarily, as you will note from the thread, the supposed well owner never placed his acquiring document of record.  He may NOT have obtained an assignment of the lease itself, either in its totality or in terms of a partial assignment.  He may have nothing more than a bill of sale for the well itself. 

Permalink Reply by Billy Park Whyde on June 24, 2012 at 7:24am

 This situation is real I expect that this will not be the only case where this is happening as people bought up parcels some under land contracts where leases where not even thought about in the acquisition of those parcels.  

  To further screw up matters a oil company that had reassigned the lease had a overriding 1/32 of the production which appears to have slipped through the cracks over the years! 

Jim ShoosPermalink Reply by Jim Shoos on June 24, 2012 at 7:33am

well, if the company truly is defunct/nonexistent then the only thing that the operator of the well can do is suspense the payment due under the ORRI.  After a prescribed period of time those revenues will escheat to the State.

3uq96odaochmjPermalink Reply by 3uq96odaochmj on June 25, 2012 at 1:01am

best to consult an attorney

Permalink Reply by Michael L Phelps on July 1, 2012 at 2:06am

It is correct that well owners be registered and bonded with the state, the are  Non-domestic ( actual Producing well  owners) and domestic owners (landowner owned for domestic use) A change of owner should have been filed with the state proving ownership, either by affadavit or supplying the lease transfer.  As far as holding the entire farm by the lease, that is covered in the lease.  If original company went out of business i suggest seeking legal counsel, if you were entitled to royalty from this and not receieved them it is a lease violation and procedures have to be followed to gain compliance and or possible cancel the lease, with that being said each permitted well depending on depth holds a certain amount of acreage according to  oil and gas law in order to insure proper well spacing.  Vertical wells: 2000 ft to 4000ft hold 20 acres, 4000ft and deeper hold 40 acres.

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