Lawsuits in Ohio and Supreme Court of Ohio regarding Mineral Rights Holders

We received a lease check from Hess Oil last year as a payment for a five-year lease. Now they are drilling, but we are not receiving a royalty check. We have been told the oil companies in Ohio are holding royalty checks for those who own mineral rights but do not own the surface land. We are told they are waiting to see who gets the money until the State of Ohio Supreme Court makes a decision on if the recipient will be the mineral rights owners or the land owners. Does anyone have further information on this? Here we are paying mineral rights taxes to Harrison County, yet we may not even get any money from our mineral rights! If you have information, we will be most appreciative. 

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Permalink Reply by nc man on May 4, 2015 at 8:36am

Rita,

I am so glad I saw your discussion! I am going through this same thing with AEU and K&R landowner. I will keep my eyes open for any more responses on your discussion. I have learned so much on Marcellus!

Inherited my mineral rights from my Dad in 1987, along with 2 brothers and agree that our land was sold but not the mineral rights. We have been told that K&R Conservation LLC was not aware that they did not purchase the mineral rights when they purchased the vast amount of acres that they did.

I know that I am aware, each time I purchase property, if I own the mineral rights or not! It is real hard to believe K&R Conservation LLC, that purchased hundreds of acres, was not aware if he owned just the land or if the minerals were included in the sale.

I contacted AEU, who has our lease, in  n.e Guernsey county,  bordering Harrison county,(on south side) why no drilling on the K&R property, yet drilling was going on all around it. All this contact  at AEU would say is that, no drilling due to a Dormant Mineral Right issue.

I am learning from y'all what that really is. Any idea, as far as a timeline goes, on a ruling from the Supreme court?

Appreciate your insight!

nc man

Permalink Reply by RITA KERR on May 4, 2015 at 9:50am

Hi nc,

I know this is frustrating. We received the full amount of our lease rental almost two years ago. It was a sizable amount and we were pleased to receive it. I had been in a coma for almost a month, so we had sizable medical bills, so it came at a great time for us.  We were told by Hess that they would most likely start drilling and we would start receiving monthly royalty checks last fall. We are told the drilling has begun, but started a few months later than expected originally. The royalty monies are being held awaiting the outcome of the Supreme Court Decision. This seems to be where you are at this time also. From the information I have been able to find, it appears Oral Arguments in Corban vs Chesapeake begin Wednesday of this week, May 6. Dahlgrens is being held pending decisions in Chesapeake vs Buell. I was told it may take weeks or longer for the final decision to be handed down. We inherited the rights from my husband's father, as well has his two brothers. There are cousins also involved in the ownership. As a group we have been paying mineral rights taxes for the past two years. Best of luck to you, that this be decided in your favor. You are so right at anyone purchasing land, whether it is one acre or hundreds of acreage, should know that they did not receive the mineral rights. If it isn't spelled out in their paperwork, I should think they need to file a suit against the title company. Let's hope the Ohio Supreme Court uses discernment and wisdom in making the right decision, in that something we rightfully own is not taken from us. 

Be blessed,

Rita

Permalink Reply by nc man on May 5, 2015 at 2:25am

Rita,

Thank you for the lovely, informative reply. Yes, I believe we are in the same boat. We, too, are hoping the Supreme Court will not take from us and others like you, what is rightfully ours, at least in our eyes!

Never thought much about the o/g deed my Father quit claimed me and my brothers in "89. Then when Shell offered to buy our lease in 2011, and we received the  bonus check, something I never would have thought I would see in one lump sum, in my life time, it was hard to comprehend!  This whole happening was such a wonderful surprise and I have looked to heaven and thanked my Dad many times over, for his foresight in holding on to the mineral rights, when he sold his 88 acres.

After waiting four years and seeing no activity on the lease I just could not figure out why. Told by the County Recorder, Collen Wheatley, when we recorded the lease, our o/g rights were located in a "hot spot". If true, then why no drilling?  Now, the question has been solved, with the help of you and the others on this site. Thur Marcellus, I have "met" a lot of people who are so willing to share their o/g knowledge. I cannot thank y'all enough. Without all the help I would still be in the dark. I had NO knowledge of the industry whatsoever!.

Whatever the court concludes, I know God had his hand in the decision. It is only $. Don't get me wrong, I have a lot of people and organizations, I would love to help but as the old saying goes--------------you can't fight city hall!

Good Luck to us all!

nc man

Permalink Reply by jerry lee nichols on May 5, 2015 at 3:21am

I am a person who wants to do away with mineral deeds entirely,because as a person who buys and sells house etc,it causes me to many problems. Here is my current opinion of the new court case. I am a property owner not a surface owner,anyone who is claiming to own a mineral deed is claiming to own extractable minerals which are being stored on my property,asa such,if the court does away with the 20years non-production rule then these people get to start paying rent.my attorney has the case ready pending the outcome of the current case. 35 years of rent is probably going to be more than the mineral value.,but we will see and I urge all property owners to join with me in this matter.

Permalink Reply by RAY RATELL on March 27, 2015 at 5:38am

NEED TO GET OHIO TO PUT IN RULES FOR OIL AND GAS. THE LAND OWNERS SHOULD OWN EVERYTHING. THE GAS ONLY COULD BE SOLD. NOW THE LAND OWNER SHOULD HAVE A LAW SAYING THAT OIL COMPANIES CAN ONLY HAVE ONE PERMIT PER DRILLING ZONE. SO IF THE DRILLING COMPANY WANTS MORE THAN ONE ZONE THEN EACH ZONE SHOULD BE PERMITED AND PAID FOR TO THE STATE AND THE LAND OWNER.

NOW THERE SHOULD BE A LAW SAYING WHAT IS COMMERCIAL PRODUCTION? EACH WELL SHOULD HAVE A PROFIT AND LOSS STATEMENT YEARLY SENT TO THE LAND OWNER AND ONE TO THE DNR DEPARTMENT OF RESOURCES. IF THE WELL CAN NOT PAY THE INSURANCE , TAXES, ROYALTIES, WELL GAGER, PUMPING OF WELL, ALL EXPENSES WOULD MAKE THE TOTAL.

MOST WELLS IN OHIO ARE ( NOT ) COMMERCIAL, THEY ARE CALLED STRIPPER WELLS AND NOT COMMERCIAL. THE LAND OWNERS ARE LOSING THE GAS FROM THESE WELLS BECAUSE THE PRODUCERS ARE RUNNING THE WELLS UNTIL THEY FLOOD IN AND NOW THEY ARE NO GOOD FOR THE LAND OWNER OR PRODUCER.

MAKE SURE THE WELL HAS GAS ENOUGH FOR YOUR HOUSE BEFORE YOU GET THE WELL.

THE STATE IS LOSING OUT ON A LOT OF MONEY FROM OIL PRODUCERS.

Permalink Reply by Tony Yurina on March 27, 2015 at 1:44pm

I believe this issue to be an Ohio Constitutional question, or in better understanding an issue involving the taking of property without the owners consent.

The 1989 DMA runs headlong into this issue regarding the taking of property without the owners consent.

It is no different than someone selling an acre of ground, having house with a life estate reservation, then a poor piece of legislation is passed that now states you must move out of the house because that is the law today.   It is pretty obvious that your initial sales transaction would have included much different terms of remuneration.  

It is counter intuitive to allow the taking of personal property without compensation and the owners consent.  So says the Ohio Constitution.

By the way, the 2006 DMA statute revision corrected this original legislative oversight.

Permalink Reply by Olive Sue on March 27, 2015 at 3:02pm

If the 2006 version clears the "intentions" of the 1989 version without question, why have all the cases or many been before the District Court of Appeals and now before the Supreme Court?

Permalink Reply by RITA KERR on March 27, 2015 at 5:25pm

I've wondered that myself, Olive Sue.

Permalink Reply by Den on March 29, 2015 at 2:29pm

because ODMA has been ruled on in different ways by different judges.  Also, most of these cases have different circumstances, none of them are the same, each needs to be ruled separately. Some of the cases are purely 89 version, some are 2006 version, depending on when land was bought and when the 20 yr period started, and if there is a sliding 20 yr period.

Permalink Reply by RITA KERR on March 27, 2015 at 5:24pm

Thank you for your response, Tony. As you can see by my comment to Jerry Lee Nichols, above, I do totally agree. I wrote a letter to each Ohio Supreme Court Judge, stating just that. But, we were notified that we had to contact the Legislature. I'm under the impression that the Supreme Court is going to make a decision on which statute is going to be acknowledged. Do you know if this is correct and when that decision will be made? 

Permalink Reply by deutchen on March 28, 2015 at 2:54am

Yes. Probably the question of which version will be used will be decided in Corban v Chesapeake. Oral arguments are scheduled before the Ohio Supreme Court on May 6. I'm not sure how long after oral arguments are given that a decision is given.

Permalink Reply by jerry lee nichols on March 28, 2015 at 5:08am

I guess trhat we agree to disagree.You feel  like that someone is stealing from you and I feel the same. In Monroe County Minerals are not taxed seperatly so there is no one size fits all, to me the fairest thing to do going forward is to ban all severed interests and return property rights as a whole to the buyer.

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