Can my property be seized for drilling by an oil and gas company?
While landowners enjoy rights that protect them from such activity in terms of drilling, mineral-rights laws are varied and sometimes complex.
In Ohio, the laws strike a balance between protecting landowners and ensuring that oil and gas companies can get access to the land they need to do their business and produce natural resources.
An oil and gas company must seek mineral rights from property owners. This is typically done by obtaining a lease to the land — a document that allows operators access to mineral rights in exchange for rent and royalties. A lease bonus is paid after the document has been cleared of all title issues, and if the well begins producing, landowners are entitled to royalties on that production.
Leases typically include several uniform provisions, but an operator will negotiate each one separately.
They can vary to include different royalties or provisions that allow or disallow surface operations, for example.
Experts advise landowners to always seek legal assistance anytime they are approached to sign a lease.
If property owners find themselves in an area where 65 percent of the land has been leased to other parties, and an operator has plans to drill multiple wells from one pad — they could be unitized under Ohio Revised Code 1509.28.
This means a landowner could be pulled into a drilling unit. If they do not agree to surface operations, no drilling activity will take place on their property.
If the state approves a unitization request, an operator will gain access to the mineral rights underneath any unleased piece of property in the unit.
Compensation is determined by the terms of the unit agreement.
If an operator has secured leases with 90 percent of property owners in a given area and requires more acreage to establish a drilling pad there, any holdouts can be included in the drilling unit under Ohio Revised Code 1509.27, commonly referred to as mandatory pooling.
Like unitization, surface activity is limited under mandatory pooling, and compensation is determined by the unit agreement.
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