Ohio has become an epicenter for oil and gas leasing and drilling activity. Many landowners are faced with leases and legal documents for resources they may not have realized existed on their property.
Here are five tips to consider from Ohio Farm Bureau’s brochure, “A Landowner Guide to Oil and Gas Leasing.”
1. The best protection a landowner has is to establish a relationship with an attorney to review and negotiate any oil and gas leases.
2. Landowners should explore whether they own the mineral rights associated with their surface property, and if any old leases are in force on their property. In some cases, severed mineral rights can be rejoined with the surface property and old leases may have issues that can be renegotiated to the landowner’s advantage.
3. Some of the terms landowners may consider when negotiating an oil and gas lease are: free gas provisions, duration of lease, reimbursement for damages to property, bonus payments, delay rental and royalty payments. Creating provisions protecting soil and water resources, as well as giving the landowner input or approval of placement of additional infrastructure on their property should be considered, too.
4. Landowner or negotiation groups are becoming more common to allow for greater bargaining power. Landowners should enter into these groups with the same caution they would use when negotiating personally with an oil and gas company. Even if a landowner group is represented by an attorney, landowners should consider having individual legal counsel as well.
5. Ohio law requires minimum land area before an oil or gas well can be drilled. Oil and gas producers may pool properties into a drilling unit, which may affect royalty payments.
More Landowner Information
Get the full list of landowner topics covered in the toolkit, with tips blogs for each in Ohio Farm Bureau’s Legal Information Series.
Also, listen to Legal with Leah, a podcast featuring Ohio Farm Bureau’s Director of Ag Law Leah Curtis discussing topics impacting landowners.