Court Decisions in Ohio in re: leases with wells 'in production' - looking for information

I will apologize ahead of time if I am not as on top of this particluar issue as I should be, and if this forum has already covered it at length. My simple searching was limitedly helpful.

Does anyone know if Ohio courts have made any rulings fore or against a landowner who has brought suit challenging an Oil & Gas Co. lease in either or both of these areas?.....

    Area 1 - What does "a well in production" really mean?  Does the well have to be commercially profitable, or will token amounts of product produced validate the lease and keep it active.  Who decides what is commercially profitable?

    Area 2 - My lease was executed by my grandfather in 1981.  At that time NO ONE (as far as I know) gave any thought to deep wells and horizontal drilling.  Has any court ruled on excluding deep well (mineral) rights from existing leases where there is NO mention of specific formations permitted to be explored/tapped/drilled or excluded from exploration/tapping/drilling, NOR, language as to depth limitations/exclusions?

Thanks in advance for any help you can provide in this area.  D.B.

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Permalink Reply by Paul Martinelli on June 7, 2013 at 1:48am

Make it simple.....all old lease are valid for vertical wells only....Any horizontal well requires new lease with landowner.

Permalink Reply by David Brooke on June 7, 2013 at 2:12am

Interesting..... Is this just IYHO, or do you have some legal foundation to support it.  While I agree with the statement, it would be more helpful if there was a court decision or legislation to back it up....  Once again, Thank You all for weighing in.  This thread has gone much farther than I thought possible and has offered a lot more information and ideas that I had expected.  D.B.

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on June 7, 2013 at 8:09am

Paul - am I understanding you correctly (I like 'simple', as well)...

...ALL OLD LEASE ARE VALID FOR VERTICAL WELLS ONLY...

 ***ANY HORIZONTAL WELL requires a new lease with LANDOWNER.

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seriously? -- Then WHY are folks all concerned about a 'OLD/PREVIOUS LEASE' & being tangled up BY that lease ***concerning the 'DEEP' rights? Am I wrong in this 'thought concept'? 

SO, if I'm understanding you correctly here...that LANDOWNER'S RIGHTS ***ARE*** protected/limited to ONLY being for shallow wells?

That DOES seem strange/odd...then WHY would 'postcards' from various G/O matters address landowners ONLY is their land is NOT 'under lease'...and what about those OLD LEASES that do NOT 'limit drilling depths'?...that sounds almost too good to be true, Paul.

--------------------------------

Sure hope that that what you are implying WOULD be true for landowners out there...but I'm NOT being a 'doubting Thomas' - why kick a gift horse in the teeth?...BUT...IS this indeed the case? ***IF SO then there should be alot of ***HAPPY LANDOWNERS (i.e. happy campers!) out there in *Northeastern USA Gasland. Whoo-wee!

We'll see...how deep are those scars in those hands, again...?

As one light lights another, nor grows less - so nobleness enkindles nobleness. HOPE (springs eternal...)?

Permalink Reply by Paul Martinelli on June 7, 2013 at 8:18am

GG....

Maybe you misunderstood what I was saying....

 

I WISH that is how all the leasing for deep/horizontal wells were being treated....I didn't mean to imply that they are being treated that way.

 

It would be "simple" to address all the HBP issues we have today......nothing would be HBP when it came to horizontal wells.

I'd even be fine if the Vertical well lease holders were paid something as a result of the new horizontal leases...something like a referral fee if you will.

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on June 7, 2013 at 10:22am

Paul M. - Yes, wipe a tear from the corner of my eye - for ALL LANDOWNERS with this.... WISHES CAN become real...

HOPE DOES 'spring eternal' from the deep WELL of the heart. As I've said before - the lease I have DOES limit 'drilling depth' to 1,200'...and says that lease can NOT be sold traded - without SIGNATURE consent of Lessor. ***EVEN THAT they attempted to 'get skrewed up' (***PURPOSELY?!***hmmm)...actually - THEY DID, just working on this now...

COMPLICATED:

*PIPELINE was sold/transferred - THIS is under original lease format NOT to be done....

*They 'nixed' their own deal...isn't THAT amazing! SO just need to unravel MY advantages...but that it talk for another day...my worries. No worries. *Pray for me.

------------------

***BUT to address 'matters at hand' for many others...there SHOULD be instilled into place SOME ADVANTAGES for LANDOWNERS whom ARE 'captors under lease' (water under/over the dam) - I think not! As Oliver W. Perry once said, "NEVER give up the ship!"...***NEVER GIVE UP! (our beloved forefathers didn't 'give up'!!!) ***200th Anniversary for Brig Niagara up in Erie...2013.

Where there is a WILL there is always a way...LANDOWNERS should push for legislation for PROTECTION FROM these G/O 'predators' - for PREDATORS they are indeed!...IF a current well/lease is 'in play' - then ANY drilling of 'deeper shale levels' SHOULD garner 15% as WELL as minimum $1,500/acre PREVIOUS TO *ANY* 'DEEP WELL EXPLORATION'. ***STATES SHOULD want to BACK UP their constituents. IF they did that - everyone would WIN! ***WIN/WIN!

------------------

***Where there is a WELL there is a WAY.***

Pretty simple - isn't it? YES IT IS. No need to 'overcomplicate' WELL drilling matters...give JUSTICE to LANDOWNER'S qualms of 'regret' for signing WHEN they did.... THIS simple concept WOULD give better 'peace' to individual landowners whom DESERVE such respect/justification. 

***ANY addition *PIPELINES* - beyond what was initially installed for TRANSPORT of shallow well-drilled product - should be able to be ***FRESHLY NEGOTIATED as WELL***. Gotta' TRANSPORT the gas once it's outta' it's cubby-hole', eh?...

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YES, individual, independent LANDOWNERS have every right to stage an Ohio Gas Party or Pa. Gas Party...now THAT would be a well = deserved tactic of insight and 'matters NEEDING to be addressed' in ALL FAIRNESS - to  the G/O owning LANDOWNER! HEAR YE', HEAR YE'!!!...but this really could be addressed & solved much more amicably IF reason is applied. Preferable, indeed.

*LANDOWNER/ DEED / LANDOWNER / plead? - NO - *DEMAND JUSTICE!

To each their own...gotta' draw a line somewhere. Gotta' start somewhere...WE really HAVEN'T been exposed to G/O matters - as far as 'land dealings' are concerned. The G/O Co.'s REALLY had US/LANDOWNERS by the short hairs & THEY knew it! Tables CAN 'be turned'...the ARABS learned, knew, & UNDERSTOOD just WHAT they had in their 'belly' - and HOW NECESSARY they were to US (remember the 70's?).... WE MATTER!

*WE MATTER, I repeat. *YOU COUNT! *YOU have been diligent of/to your land - 'they' supposedly have RIGHTS to 'deeper drilling levels' that THEY DID 'know about' & YOU were NOT even enlightened to (***PURPOSEFULLY***) when you-or your mother & father -OR- your grandparents...signed that old lease...WRONG.

*HANDS DOWN WRONG! WRONGS CAN 'be righted'!!! What I proposed isn't 'greedy' or in ANY way 'out of line' in requesting/demanding/thinking...

it is COMMON SENSE! Think about it - talk about it...THEN figure out HOW to get this addressed - for YOU & your FUTURE HEIRS!

***ANY 'existing G/O Contract: re-sign for 'deeper depth' drilling areas - 

           --- 15% ROYALTY

           --- $1,500-/acre - this is NOT 'a signing bonus', but rather a JUSTIFIABLE PAYMENT FOR 'LOSS. of being 'tied up' BY a pre-existing lease & potential, INTENTIONAL THEFT of any LANDOWNER'S 'stolen/denied' rights of ownership.

***PRETTY SIMPLE, ain't it? YEP - it is, shep. THAT would help to 'take the salt OUT of G/O wounds/theft' to MANY LANDOWNERS from those 'STEALTH G/O LEASES' *STEALTH THEFT*...you all 'play around' with variations of this potential SOLUTION...MAYBE the 15% royalty fine...but $2,000/acre would be just... like I said - most people are reasonable...IF something like this WERE worked over &  'put in place' - it WOULD take away alot of 'STING' of LAND-LEASE wounds... many of these landowners are farmers, military, patriotic/God-fearing...you DO know that 'oil drilling' is just a take-off of SALT DRILLING - just ask 'Uncle Billy'...& Drake.

WE ARE AMERICANS. JUSTICE - All for one & one for ALL! *THINK*

As one light lights another, nor grows less - so nobleness enkindles nobleness.

Permalink Reply by george m. on June 7, 2013 at 8:55am

Paul,

Of course you are right.  That (Vertical) was an "implied convenant" when the original lease was signed.  However, unless OHIO legislature passes modern, O&G lease law, the only way to proceed is to obtain a partial release from the original lessee.  This area begs for reform but is being ignored by lawmakers.  They are holding back OHIO O&G exploration and development.  Old HBP leases are only helping lawyers, cause even oil cos are having legal problems transferring/assigning these old leases, defining units etc.  Come on Buckeyes, get your stuff together.  Lease reform now, it's the 21st century.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on June 7, 2013 at 9:09am

How would the state legislature pass a new law that retroactively changes all contracts that were ever signed and continue to be enforced today without moving the entire state to China (or otherwise outside of the jurisdiction of American Constitutional law)?

Permalink Reply by Paul Martinelli on June 7, 2013 at 9:23am

Here is some thing to think about....

 

Lets say that passing a new law  directed at horizontal wells only is legally possible.

 

How much support would the Law have from landowners if Gov. Kasich had it coupled with the new severance tax ( also on horizontal wells only)?

 

Now that be interesting........................

Permalink Reply by george m. on June 7, 2013 at 10:00am

nobody is talking about changing the constitution.  We're talking about "intent of the parties", "defined terms"...such as the State of Ohio requires for a drilling permit.  This is all basic contract law that we inherited from the Brits not the Chinese.  If the original lease says lessee's rights shall go to "the center of the earth" and the farmer signed it, he's stuck with it.  If the lease doesn't say anything about depth or height, then  it violates the statue of frauds that says basically "everything must be in writing."  Sorry Marcus, but most old leases don't say "to the center of the earth".

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on June 7, 2013 at 4:47pm

Most leases give no specifics to any depth, which has always been interpreted to mean that the driller has every produceable depth. It stinks for a lot of landowners but we ought to be careful when we start inviting government into private contracts. That's my concern. I want less, more efficient government, not more bureaucracy.

Permalink Reply by John OBrien, landowner advocate on June 7, 2013 at 11:34pm

Marcus,

Nobody is asking for more government.  We give up an old obsolete, unfair law and replace it with a fair modern one designed for the times at hand.  The good ole boys can have their fun and profit from their wells that have paid the landowner little to nothing.  The landowners, who should have rights, can lease to whom they choose fairly.  End of story.

2z248p19vqnh9Permalink Reply by 2z248p19vqnh9 on June 8, 2013 at 5:14am

John O'Brien (ye Irish clan who hails from Brien...'of Brien, yes?)

WHO gives a Hoot??? *CODE of Conduct & Standards - for *ALL inv...

This is oh so very true. It is going to take EVERYONE 'being on the same page', will it not? NO ONE wants 'more government'...WE CAN 'govern ourselves quite well. Right is Right & Wrong is Wrong. When WE address & take matters into our own hands in PROPER MANNERS - it all is fine. *RESPECT.

You are what you are when no one is looking as WELL as you are what you are when EVERYONE is looking... *SIMPLE - 'kiss' it (keep it simple, schweethart!). Take THAT to the bank....

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We NEED to 'draw lines in the sand' - EVERYONE concernsing standards, values parameters of acceptance...

The G/O business is like a WILD WEST SHOW...like kids on a playground - NOT like 'standard operating procedure in a BUILDiNG run by a business

Butt Naked Worker Greets Me At New Compressor Station - YouTube ...now WHATTA' YA' DO WITH THAT???...***Who gives a hoot? (*he's showin' his 'boot'!!!)

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STANDARDS. Nothing unreasonable...can you imagine an employee doing something like what was caught on tape (*was PURPOSELY SHOWN to Vera Scroggins - and hence by HER to the WORLD...x5 minutes of fame?...). NOW what if something like this were done in a PLANT anywhere?...WOMEN would scream bloody...'butt' somehow - because the CREW is of the 'male agenda'...everyone snickers & giggles like school kids! TEE HEE?...peewee?

SO...things ARE 'out of hand'. It's NOT just a 'boy's world' out there anymore...we've got ladies, women, gals & dolls (of ALL sorts these days now...just NUTS!)...children +. HOW to address?

As one light lights another, nor grows less - so nobleness enkindles nobleness. ***Maybe he thinks Vera's something sweet...? - and just wanted to shine her on?...

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