Replies to This Discussion

Permalink Reply by Joseph-Ohio on April 23, 2013 at 9:40am

Wondering if your land ends up being force pooled and the unit leasehold agreement holding all of the other lands has no restrictions / landowner considerations included if that would end up binding on your land ?

See, we would want a 'non surface development' type of leasehold agreement.

If your lands become force pooled and you don't want wells / big well pads / pipelines / waste frac fluid injection wells / roads / storage / crop damage / timber and future timber damage affecting the value of your lands and you are forced into a drilling unit whose leasehold agreement doesn't discriminate and in effect permits any or all of the above (without negotiating fair compensation) how can that be right / legal ?

Permalink Reply by Joseph-Ohio on April 24, 2013 at 11:27am

Well, I'm hearing numerous interpretations here and on the Trumbull Group's pages.

But, I've been thinking about it and have come up with an idea of what I think would be correct - but, I still have questions.

I think how you're treated as a landowner should your land be force pooled depends on your lease terms / if you're already leased.

Seems to me landowners can lease their land to Company A and be paid their signing bonus and agreed to royalty share and then Company A may be force pooled into a drill unit that Company B wants to develop.  The landowner's agreement / lease terms don't change as they are already leased with Company A.  Only Company A would be bound by the forced pooling statutes not the landowner.  A bad deal for Company A could occur / probably would / probably has.

However, if a landowner is unleased and Company B wants their lands included in a drill unit - then Company B would have to make an equitable offer to the unleased landowner.  Seems to me that serious problems could arise for the unleased landowner should Company B include the unleased landowner's acreage in a drill unit whose leasehold agreements are deficient (by the unleased landowner's standards) and force the unleased landowner into having to accept the deficient terms and conditions.  Personally I can't see how any entity / jurisdictional authority can legally force a landowner to accept terms and conditions deficient by said landowner's standards - unless by something like 'eminent domain'.

Is it actually possible to force deficient (as interpretted by the landowner) terms and conditions upon the landowner ?

Permalink Reply by Joseph-Ohio on April 27, 2013 at 3:36am

It's unleased landowners forced into a drilling unit and whatever leasehold agreement being enforced is most important to me right now (as an unleased landowner).

Going beyond signing bonus money, what if you're an unleased landowner and end up being force pooled into a leasehold agreement that doesn't contain language that you as a landowner thinks very important ?

Say you as a landowner think it's right to withhold rights to or be paid for pipelines, easements, roads, storage, damaged standing timber / future timber, crops, your fresh water supply, fresh water ponds / reservoir usage, no wells / injection wells on your property, non surface development, etc.; while the leasehold agreement being forced on you doesn't address those or other such considerations ?

How wrong would that be ?

I think very, very wrong myself.

How could it even be legal unless something like 'eminent domain' is enacted.

Can the ODNR enact 'eminent domain' ?

Seems like that would have to come from higher up - maybe like the Governor or something.

Who is the ODNR's boss anyway ?

Thinking the offended landowner(s) would have to appeal up and that would really stall things for others in the Unit.  Would that be right or wrong ?  Are the other landowner(s) in the Unit then offended ?  Why would they sign into a lease that doesn't protect their rights as landowner(s) / the land ?

Sounds to me like some pretty ugly choices to have to make.

The best protection would be to get leased into a landowner cognizant / friendly leasehold agreement that includes such land / landowner concerns / caveats.  Then if unleased landowners get force pooled they wouldn't have a cause to litigate.

Just thinking out loud.

What do you think ?

J-O