Land Leasing & Easement

How can hiring an Ohio Oil and Gas Attorney benefit a landowner when leasing land to an Oil & Gas Company, or negotiating a pipeline easement?

The Utica and Marcellus shale plays are a hot topic in southeastern and eastern Ohio at this point in time, and have resulted in the signing of many leases and pipeline easements in this area in the past 12 months. Many have heard of the huge royalty and bonus payments being made under certain leases. An experienced Oil and Gas Attorney can be invaluable to a landowner in the leasing process. This is in terms of negotiating the lease terms, as well as the bonus and royalty payments and percentages. Many provisions must be negotiated and then documents drafted that properly memorialize the terms of the agreement or lease. It is a must to have an attorney involved on your behalf, not only to protect your interests but to maximize your profits and avoid lease terms that are problematic but that you may have to live with for generations. Many times a lease addendum includes all those special provisions that have been negotiated for the landowners protection. Important provisions include a deadline for the drilling of the well, or a dry hole provision, and also including terms to preserve the royalty payments for the owner to avoid depletion of that percentage in the lease language. You will live with the terms of your lease, possibly for generations to come and therefore it is very important that you protect yourself and your interests in the negotiation and drafting process. Making sure your lease is not assigned for an overriding royalty interest is also very important to avoid someone else pocketing profits that you should have been receiving had you had a good attorney to look out for your interests. You can not change the terms of your lease after you sign it and signing one without the benefit of an experienced attorney is very dangerous and fraught with pitfalls for the mineral owner.

Types of mineral property ownership and the Ohio Dormant Minerals Acts

The Ohio Dormant Minerals Act, passed in 1989, declares a property’s mineral rights that have been severed from the surface, abandoned unless the owner takes steps to preserve those severed rights. Landowners need specialized attorneys to ensure that their rights are protected. Although the law has been changed to require additional action by the surface owner to revert the minerals back to the surface interest, much litigation has ensued over the earlier version of the act and the effect it may have on severed mineral interest owners in Ohio.

There are several types of mineral interests, including coal, oil and gas, and all minerals underlying the surface of real estate. They can be owned with the surface or without the surface, often by reservation by the grantor when the property is transferred or sold. Royalty interests arise also in Ohio, where individuals are entitled to royalty payments but do not own the surface or the minerals. This is called a royalty interest.

If you have a question about the Dormant Minerals Act or concerning what type of mineral interests you own, contact an experienced oil and gas attorney to discuss these matters and the impact on your interest