I have 12 acres in northeastern Ohio. I was approached by BP to lease my mineral rights, only to find out that a previous owner had leased the rights to then Atlas Gas (1962) / now Enervest. I requested the Enervest release my acreage from the lease since there were no wells on my property, but was denied because there are 2 producing wells on adjacent properties (use to be all one farm, then was divided up). In further talking with Enervest, I was told that they were unaware of my purchase of the land back in 1999 and that I may be entitled to the royalties, only to find out that the rights were assigned to someone else by that original owner in roughly 1986. My question is, do I have any way of reclaiming the mineral rights for my property? I heard rumor that Ohio was going to pass a law that all mineral rights would now need to stay with the land ownership, so if property is sold the mineral rights automatically go with it. Is that actually going to happen? HELP!
It sounds like when the farm was all in one piece, before it was divided up, it was leased by the then current mineral owners. And it sounds like that Lease did not have a Pugh Clause, or wording to that effect, which says that any acreage not contained within a drilling unit at the end of the Primary Term is automatically released to the mineral owner(s). Sounds like you are out of luck, but a trip to the Courthouse would be worthwhile, in my opinion. You could verify what you have been told (look for the 1962 lease and inspect it for a Pugh Clause, and look for the 1986 Royalty Deed to make sure what you were told is true).
Thanks Pete; I will have to look for a possible Pugh Clause. It's amazing just how much documentation there can be on past land ownership. I really don't have the money to pursue legal advice/help unless I'm fairly certain I will be getting a return to help cover it, hence why I'm looking for any insight someone may be able to give me on here first. Thanks again.
Shawn, I think it unlikely that a law passed in the future will solve your problem. At the very least, if they passed the law tomorrow they would have to give the operators years to drill your property or to come to some kind of agreement. If the operators lost billions of dollars worth of mineral acres they were holding in reserve at the stroke of a pen, I think the operators would vote with their feet and the state would not like that.
If Ohio has, or did pass a dormant minerals act, it would not apply to your acres since they are and have been under lease which is usually considered use and not abandonment of the minerals.
It never hurts to make sure but I wouldn't spend a great deal of time or money on it past getting a look at the 1986 deed and the lease if possible.
Good info from Pete and R.W.
This is a situation that will probably have a negative ending in your case. The oil company will not give up that lease and since there are wells on the original tract, that holds it in production. Back when there was little interest in drilling, most folks would not of give much thought about the mineral property or any lease. Nowadays people check on these minerals a lot more. Mineral rights can consume a person in this boom and make you feel empty when they find out situations such as yours. There are a lot of people out there with leases that were signed years ago or in your case by previous owners. We have one in our family and get $15.00 a year in the form of a royalty check. The Pugh clause is definitely an important addition to a lease. I hope by a stroke of luck someone had it put in the lease. I also had a former owner of property deed the minerals from a tract I wanted to buy. He called a year later and said he may be able to get them deeded back for non payment of taxes. I was not interested in dealing with him after all the calls and leg work I did the year before. I would never have found out if I had not checked into all of the records and a paper trail.
Shawn, if there is a Pugh Clause in the lease somewhere, there's a 99% chance that it won't actually say "Pugh Clause" and have red neon arrows pointing to it. But if there is a Pugh Clause, it will be somewhere of the actual WORDING of the lease. If the lease is a boilerplate with an Addendum attached containing "additional clauses," it is probably in the Addendum. I'm hoping also that you can find the wording in there somewhere.
Thank you all for taking the time to give me some direction and advice. I'm going to try and pour through the old lease this weekend and see if there is anything that may ressemble a Pugh Clause.