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Permalink Reply by Joseph-Ohio on April 24, 2013 at 11:17am

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 ?

Just don't sound right to me.

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Permalink Reply by Inchworm antenna on April 26, 2013 at 12:53pm

Is this ODNR's way of allocating more authority to a lease than what would be described therein? Leases probably have pooling and unitization clauses and use both words because their meanings are not exactly the same, however ODNR seems to suggest they do.

At what point does this become stretch of executive authority?  

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

Inch...

It's unleased landowners forced into a drilling unit and whatever leasehold agreement being enforced is most important to me.

Beyond signing bonus money, what if you're an unleased landowner 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

 

 

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Permalink Reply by Inchworm antenna on April 30, 2013 at 5:02pm

Lease amendment should be the first option.  I just hope ODNR inquires about that with the lessor to ensure those options were thoroughly explored before just granting granting unitization orders through any forced pooling.

How's this for eminent domain:  A friend of mine was sent a letter  from Columbia Gas two weeks ago.  He stated it indicating they have been storing gas under his property, however do not have a lease.  He indicated the letter states my friend has 10 days to sign a lease that was enclosed or they will initiate an eminent domain process. He stated the lease terms are for a one-time $50 an acre, and a $200 sign-on bonus.  

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Permalink Reply by Joseph-Ohio on April 30, 2013 at 10:52pm

I'd like to see replacement landowner aware personnel @ the ODNR installed.

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