Regaining Ownership of Severed Oil and Gas Mineral Rights in Ohio
Ohio’s Dormant Minerals Act (Revised Code 5301.56) provides a landowner with the opportunity to acquire title to previously severed oil and gas mineral rights if the mineral interest owner does not “use” those rights during a specific 20-year time period. If oil and gas rights are not “used” during the 20-year period, then title to those rights vests with the surface owner.
As originally enacted in 1989, the Ohio Dormant Minerals Act constituted a “use it or lose it” statute: if the mineral-interest owners did not “use” their mineral rights during a 20-year time period, then they automatically vested in the surface owner.1 The 1989 version, however, underwent substantial revision in 2006 when the General Assembly added certain notice requirements to the statute.2 Under the current version of the statute, the following multi-step process must be specifically followed in order to accomplish the merging of the surface and mineral interests:
- Confirm that the mineral interest at issue is not coal.
- Confirm that the mineral interest is not owned by the United States, the State of Ohio, or any political subdivision (for example, a county, township, municipality or school district).
- Ensure that the following "savings events" did not occur in the 20 years prior to the notice described below being sent to the holders of the mineral interest:
- The oil and gas mineral interest has been the “subject of” a recorded “title transaction,” which refers to any transaction affecting title to any interest in land, including title by will or descent,” as well as warranty deed, quit claim deed or mortgage.
- There has been actual production or withdrawal of oil and gas by the holder of the mineral interest.
- The mineral interest has been used in underground gas storage.
- A drilling or mining permit has been issued to the holder of the mineral interest
- A statutorily compliant affidavit to preserve the mineral interest has been filed.
- A separately listed tax parcel number has been created for the mineral interest by the county auditor.
- Serve notice by certified mail, return receipt requested, to each holder of the mineral interest (defined to include “any person who derives the person's rights from, or has a common source with, the record holder” of the mineral interest) at the last known address of each, of the owner’s intent to declare the mineral interest at issue abandoned. The notice must contain: (i) the name of each mineral interest holder and any successors and assignees; (ii) a description of the surface with references to recorded documents; (iii) a description of the mineral interest to be abandoned; (iv) a statement that no savings events occurred within the 20 years preceding the date of service; and (v) a statement that the surface owner intends to record an affidavit of abandonment.
- If certified mail notice is not possible (e.g., the certified mail notice is returned undelivered or unsigned), publish notice in a newspaper of general circulation in each county in which the land is located.
- Confirm that one of the mineral interest holders has not recorded one of the following documents within 60 days of service or publication of the notice: a claim to preserve the mineral interest or an affidavit that identifies an event that has occurred within the 20 years preceding the date of service or publication.
- File in the county recorder’s office an affidavit of abandonment between 30 and 60 days after the date notice was served. The affidavit must contain: (i) a statement that the person filing the affidavit is the surface owner; (ii) the volume and page number of the recorded severance deed; (iii) a statement that the mineral interest has been abandoned; (iv) the facts constituting the abandonment; and (v) a statement that notice was served on each mineral interest holder or their successors or assignees.
Although it is unclear whether the 1989 version, 2006 version or both can be used by surface owners seeking to reacquire severed mineral interests, it is clear that the proper use of the 2006 version provides surface owners with an important tool to regain ownership of these valuable real property interests. In all, the procedural steps under the 2006 version of Ohio’s Dormant Minerals Act require diligence and attention to detail, but abiding them strengthens the surface owner’s claim to the mineral interests at issue.
- R.C. 5301.56 (“Abandonment of mineral interest and vesting in owner of surface of lands”), eff. 6-30-06 (“2006 version”).