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The Ohio Supreme Court heard arguments for the first accepted cases surrounding the state’s Dormant Mineral Act, beginning in late August, 2014. The cases under review (Dodd v. Croskey and Chesapeake Exploration v. Buell) originated in Harrison County, OH, which sits atop the Utica Shale. Depending on the decisions handed down by the Supreme Court, severed mineral interests could revert to the current surface owner for the tract(s) of land in question in these cases.

Read More: “Lost My Mineral Rights to Surface Owner”

The Ohio Dormant Mineral Act (Ohio Rev. Code § 5301.56) took effect in 1989, but underwent a substantial revision in 2006. The law governs when surface owners may regain ownership of severed mineral interests beneath their property. In the event the surface land and the minerals are owned separately, the law says mineral interests are abandoned under certain circumstances. Currently, the law requires the landowner to notify the mineral owner of the intent to re-claim minerals before establishing ownership. Minerals are not considered abandoned if certain actions have taken by the mineral owner during the 20 year time frame before the required notification.

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Chesapeake v. Hyder – Royalty Owner Wins Big

by Kirk Eggleston on July 17, 2014

Recently, a San Antonio court of appeals affirmed the decision of a Tarrant County judgement against Chesapeake Exploration, LLC, awarding royalty owners approximately $700,000 for deducting unauthorized post-production/post well-head costs.

The plaintiff (Hyder) claimed Chesapeake deducted improper fees and interests from the royalty, based on specific language in the lease agreement. The Hyder’s royalty clause was not a standard lessee-form lease. It said the following:

“The royalty reserved herein by Lessors shall be free and clear of all production and post-production costs and expenses, including but not limited to, production, gathering, separating, storing, dehydrating, compressing, transporting, processing, treating, marketing, delivering, or any other costs and expenses incurred between the wellhead and Lessee’s point of delivery or sale of such share to a third party. …In no event shall the volume of gas used to calculate Lessors’ royalty be reduced for gas used by Lessee as fuel for lease operations or for compression or dehydration of gas.”

 Chesapeake is currently seeking review of the decision by the Texas Supreme Court.

 Below are links to further reading material on the case:

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Natural Gas Production Soars in U.S.

June 26, 2014

Natural gas production in the U.S. was the best it’s ever been in April of 2014 according to estimates from Bentek Energy, an energy market analytics company based in Denver, CO. Production for the onshore Lower 48 last month averaged 67.3 Bcf/d, which was about .5 Bcf/d higher than March of 2014 production levels of […]

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State of Louisiana Seeks to Claim Privately Owned Lands

May 23, 2014

A dispute over mineral rights ownership, originating in DeSoto Parish, LA, has now evolved into a sticky situation that could potentially impact thousands of Louisiana mineral owners. The issue specifically centers around the state’s attempt to claim ownership of certain tracts of privately owned land that have previously been traversed by navigable waterways. In January […]

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Texas Royalty Owners Have the Right to Request Information from Operator

April 29, 2014

Royalty owners living in Texas receive a mandatory letter annually from operators notifying them that they can request certain information. Section § 91.504 of the Texas Natural Resources Code provides royalty owners the right to request information about itemized deductions, the heating value of the gas, and the identification number for the lease, property or well. […]

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Chesapeake Mineral Owners See Large Deductions on Royalty Checks

March 17, 2014

Chesapeake Energy has come under increased scrutiny in recent months for allegedly defrauding Pennsylvania mineral owners. The Wall Street Journal reported in March 2014 that some mineral owners are seeing deductions of more than 35% on their royalty checks! The publication compared the royalty checks of Pennsylvania mineral owners and found that Chesapeake’s lessors had […]

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Land Owners Seeking Public Use of CO2 Pipelines in Mississippi – Video

February 18, 2014

Land owners in Mississippi are seeking public access to CO2 pipelines controlled by Denbury. The two pipelines supplying oil fields in the state are 50% utilized and land owners believe shared use could create additional value for themselves and the state. The pipelines were built employing eminent domain, but there is only one owner and […]

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Kansas Could Inact Limits on the Number of Oil Wells on a Property

February 17, 2014

A state senator in Kansas has introduced a bill that could limit the number of oil wells drilled on property in the state. A hearing to discuss the bill has not been scheduled and proposal might not be addressed until the next legislative session. The problem is magnified by surface owners that do not own […]

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ND Supreme Court Rules Missouri River Shoreline Minerals Are Owned by the State

January 29, 2014

The North Dakota Supreme Court has ruled Missouri River mineral rights found below the shoreline are owned by the state. You might not think this is significant, but the prize is about 25,000 acres and $140 million oil companies have set aside in bonuses and royalties. Development in the Bakken makes each acre significant. Waterfront […]

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Oil Export Ban Is Hurting Your Royalty Checks!

December 12, 2013

The Oil export ban is in the news more this year than we have seen in decades. The main reason is production has increased 60% or 3 million b/d in the U.S. since 2008. The U.S. is producing more oil today (almost 8 million b/d) than we have as a nation in more than 25 […]

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