Take a close look before transferring well ownership
Conferring with a knowledgeable attorney is beneficial and important to ensure you understand your rights and obligations that may result from this type of transaction.
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Editor’s Note: This article was reviewed March 5, 2025 for accuracy.
Landowners who take ownership of gas wells on their property can gain access to a low-cost supply of energy, profit from oil sales and be exempt from certain regulatory and tax requirements.
But well owners will need to be prepared to deal with new costs as well.
According to Ohio Farm Bureau Director of Energy Policy Dale Arnold, these exempt domestic wells have been bought up by farmers over the past few decades, particularly for enterprises such as dairy farming, greenhouse production or crop conditioning.
Recently, Arnold has been working with Farm Bureau members in eastern Ohio as more wonder if purchasing wells on their property makes financial sense.
He cautions that for the average user of natural gas, there are significant questions to consider before working with an oil and gas company to transfer ownership of a well.
“When you take a look at this well, how much natural gas are you going to use a year?” he asks, noting that a domestic well could save a typical farm owner between $1,500 to $2,500 annually.
Oil from the well could generate another $800-$1,200 per year. However, landowners will incur new costs for maintaining and, eventually, decommissioning the well.
“Basic price for decommissioning a well, plugging it, making sure it’s environmentally sound — a $25,000 hit,” Arnold said.
Landowners also have typically been covered for liability through their relationship with the oil and gas company. That may not be the case for exempt domestic wells, which are often not covered under farm and ranch policies.
“Buying a specialized insurance policy for a domestic well will be something you look at, too,” Arnold said.
Add to that responsibilities for filing production reports with the Ohio Department of Natural Resources and required emergency management planning information.
Arnold also notes that the natural gas from an exempt domestic well may not be sold or used for rental properties.
“You need to weigh the income with the expense, and for many smaller landowners, that could be quite a challenge,” Arnold said.
Resources
To help them make an informed decision, landowners can find annual production information on oil and gas wells through a searchable database maintained by the Ohio Department of Natural Resources.
The agency also assigns two field inspectors to each county in Ohio who can help evaluate the condition of wells. Learn more at oilandgas.ohiodnr.gov.Hear more from Arnold in the video below.
My first recommendation in your journey is to start out with a local farming friend or mentor along with joining an organization like Ohio Farm Bureau.
We’re just so thankful for the Farm Bureau and the foundation for helping put this together. And of course, the Boyert family for the vision they had with this grant. It’s jumping us forward 10 years. It’s unbelievable.
I could not have done it without the resources I have found through Farm Bureau.
It wasn’t until I joined the Wilmington College Collegiate Farm Bureau that I truly saw how my passion could translate into leadership, advocacy and a career.
The issue of property taxation remains as one of the biggest challenges our members face today. Ensuring agricultural property is valued for its agricultural potential and not development is critical to the continued success of Ohio agriculture.
Through the Select Partner program, we became educated in farm insurance and weren't just selling policies. It became more and more clear why farmers need an advocate like Ohio Farm Bureau.
So many of the issues that OFBF and its members are advocating for are important to all Ohioans. I look at OFBF as an agricultural watchdog advocating for farmers and rural communities across Ohio.
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