I recently purchased a home on 10 acres with 4 above ground oil storage tanks. When looking at the property as a potential buyer, the owners didn’t have much information on them. We were pretty much told they have always been there, and they do not generate any income from them, the oil drilling occurs behind the property ( not on our 10 acres) and that’s what they are used for. The property was perfect in every other way and we decided to purchase it. Since then, I have done some research and obtained property deeds going back to the original owner of the home. The original owner, Henry, originally had 110 acres which the house, that we now have, was apart of. Henry originated the oil and gas lease back in 1964. Years later, he decided to sell 100 of the 110 acres. The 10 acres he kept included the house and oil storage tanks. The 100 acres included the actual drilling site, now two different parcels of land. Some time down the road, Henry sold the home and 10 acres as well to the man that we bought the property from. His name is Robert. Robert stated he never received any compensation for the oil tanks being on the property, never cared much to look into it. I have been able to determine that we have 1/2 the mineral rights to our 10 acres that the oil tanks are on. Again, the actual drilling does not take place on our property. They are just using the surface of our property for the storage tanks. I have obtained the original oil and gas lease that states : If the leased premises are now or shall hereafter be owned in severalty or in seperate tracts, the premises nevertheless shall be developed and operated as one lease, and all royalties accruing hereunder shall be treated as an entirety and shall be divided among and paid to such seperate owners in the proportion that the acreage owned by each seperate owner bears to the entire leased acreage. There shall be no obligation on the part of the leasee to offset wells on seperate tracts into which the land covered by this lease may be hereafter divided by sale, devise, descent or otherwise or to furnish seperate the holder or owner of any such part or parts shall make default in the payment of the proportionate part of the rent due from him or them, such default shall not operate to defeat or affect this lease insodar as it covers a part of said land upon which the lessee or any assignee hereof shall make due payment of said rentals.
This accidentally posted before I was finished. My question is, with all of this being said- Doesn’t it sound like we should be receiving some royalties? Also, is there something that grandfathers the storage tanks into being on the property as they are not specifically mentioned on anything? Or should we be receiving some kind of rental for them using the surface of our property?
For someone to answer your question you’ll need to provide more detail on your location, at least State.
You mentioned production on the adjoining property, do you know whether your ten acres is included in that producing unit? If you don’t know someone might be able to determine that for you if you’ll post the well name and the survey/abstract number it’s in.
This is located in Cardington, OH. Lincoln Township. I am not sure if our 10 acres is included in the producing unit. The well name is HL Fischer and API Well Number: [34117220280000].
Ohio Well Completions Report 03/03/2021
API Well Number: 34117220280000 Well Name: FISCHER H L Well No. 1
Owner. FISHBURN PRODUCING INC Permit Issued: 08/28/1964 Status: PR
County: MORROW Township: LINCOLN Section: Tract: Lot:
Measured: Twp. Qtr. 3 Quadrangle: ASHLEY
Zone N Surface Coord X: 1891650 Y: 285100 Bot Hole Coord X: 0 Y: 0 Lat 40.44856 Long -82.88929
GL 1010 DF KB 1018 LTD 0 DTD 3131 PB Depth Acres 10
I got this directly from the ODNR website. At the end, it says “Acres 10” so maybe it covers 10 acres? Shouldn’t include any of my 10 acres though.
I’ve attached some documents to this reply. One is a drawing that shows the well spacing unit of 10 acres, as you had also read from the well data summary. The second is the assignment of the 1961 lease of 110 acres. The third is a map showing the overlap of the 10 acre well space with the 10 acre square assumed to be for the house site. Fischer_Ohio_1.pdf (97.9 KB) Fischer_Ohio_2.pdf (41.1 KB) 
To my amateur and unofficial eyes it looks like you should get part of the royalties since your mineral rights may overlap the 10 acres of the well spacing (about 1 acre of overlap) , or because you are part of the original 110 acres that is supposed to have the payments divided proportionally among the owners. Unfortunately, I didn’t see any production listed for 2020 or 2021, so there may be nothing to divide. My guess would be that the tank rental is still subject to whatever the original agreement was, which appears to be no money involved. It is probably worth a phone call to the current operator to find what their thoughts are. An oil and gas attorney or an oil landman will be able to give you a better answer, but you would have to gauge those expenses based on the possibility of little or no proceeds being due.
I appreciate that information, that was extremely helpful. I am going to contact an oil and gas attorney. It is definitely producing! Those trucks are in and out of here almost everyday! I contacted the Fishburn oil company who is operating it and they said it’s one of their biggest producers. They also told me royalties are being paid out amongst several people…however we are not receiving anything? Very clear in the deed history which only goes back to 2 previous owners, that only half of the mineral rights were sold. So we should have half of them at least for our 10 acres of the original 110 acres on the lease.
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