Implied Covenant to Reasonably Develop – Acreage
Many of my clients come to me hoping that I can help break their oil and gas lease. As a general proposition, oil and gas leases are hard to terminate. Given that they are drafted by oil and gas companies, it should not be surprising that they often favor the oil and gas companies themselves. Every landowner’s situation will be different, but as long as the lessee to the oil and gas...Read More
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Class Action Landowner Royalty Litigation
Twice I have successfully represented large groups of landowners regarding the proper calculation of landowner royalties. The first case was Charton v. MB Operating Co. Inc., (1990 CV 110417), which involved about two thousand landowners in Tuscarawas County, Ohio; the matter was filed as a class action. In that case, it was alleged that MB Operating was deducting about 25% of...Read More
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Ohio’s Dormant Minerals Act – Ohio’s Courts Weigh In
Below is an excerpt from a presentation I gave on November 8, 2013 for the Ohio Association of Justice Seminar. A broader overview of Ohio’s Dormant Mineral’s Act can be found here. I. Introduction Commencing in the spring of 2010, eastern Ohio experienced an unprecedented oil and gas leasing boom due to the discovery of the Utica Shale. In the recent past, Ohio landowners might...Read More
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Ohio’s Dormant Minerals Act – Overview
This is the first part of a series of articles about Ohio’s Dormant Minerals Act. Click here for a more detailed description of how Ohio Courts interpret Ohio’s Dormant Minerals Act. Oil and gas companies go to great lengths to determine if the person who signed a lease is in fact the true owner of the minerals. It is not uncommon for a landowner to sign a lease and only be paid...Read More
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Oil and Gas update – October 2013
We have been quite busy since our last update. Most -if not all- of the most valuable lands have already been leased, and energy companies have essentially staked out their positions. An incredible 169 wells are currently producing from the Utica shale in eastern Ohio. Chesapeake Energy is far and away the biggest producer in the region, as they operate 114 of these 169 wells. The...Read More
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Landowner Royalty Calculations
One of the questions we’ve been getting a lot of recently is: “how are my oil and gas royalties calculated?” There are actually a few different ways to answer this question. The first angle has to do with how a royalty is calculated as part of a drilling unit. Let’s say that you own 50 acres in a 100 acre drilling unit. Your lease probably says you are to earn 1/8...Read More
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Mortgage Subordinations
Lately we have spoken with a number of clients about mortgage subordination. Drillers typically ask the landowner’s bank to subordinate their interest in the land (the mortgage) to the driller’s interest (the oil and gas lease). The driller, of course, was concerned that they would lose their interest in the land if the bank foreclosed on the property. If the bank’s...Read More
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Arbitration Considerations
Just what is arbitration and how does it differ from court proceedings? Generally speaking, both court proceedings and arbitration proceedings are adversarial processes in which a third party (or parties, in the case of a jury trial) is asked to settle a dispute. In both court and arbitration, an award of some kind will be issued to the prevailing party. Courts issue final judgments...Read More
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