Ohio Supreme Court Decisions Achieve Practical Solution to Dormant Mineral Act Problem

On Thursday, September 15, 2016, the Supreme Court of Ohio released several opinions, one of which is sure to be the seminal opinion in the oil and gas industry for years to come. The Corban v. Chesapeake Exploration, LLC decision resolved the Ohio Dormant Minerals Act (“ODMA”) issues that have plagued Ohio courts for the past several years. The Corban decision imposed a permanent moratorium on the 1989 version of the ODMA without finding it unconstitutional by determining that version of the statute was NOT self-executing. Rather, a quiet-title action was a prerequisite to reuniting the sub-surface mineral estate with the surface estate. This is crucial because it means that Ohio surface owners must comply with the detailed notice provisions included in the 2006 version of the ODMA before successfully acquiring right to the oil and natural gas below their properties under Ohio Revised Code § 5301.56.

Under the 2006 ODMA, which is now unquestionably the only option available to Ohio citizens, a surface owner can acquire exclusive title to previously severed mineral interests underlying their property by complying with the following steps:

  • First, the surface owner must ensure that no “savings event” – as defined by Ohio revised Code § 5301.56(B)(3) and clarified, in part, by recent Ohio Supreme Court opinions – occurred in the immediately preceding 20 years.
  • Second, the surface owner must serve notice of his or her intent to claim ownership of the mineral interests on each holder of the mineral interests. Service is to be completed by certified mail with return receipt requested. If a mineral interest owner cannot be located or identified, the surface owner can satisfy the notice requirement by publication in a newspaper of general circulation in the county the property at issue is located.
  • Next, at least 30 days but less than 60 days after notice is served, the surface owner must file an affidavit of abandonment in the county recorder’s office of the county where the property is located. At this point, a mineral interest holder can preserve his or her interest by filing a preservation claim within 60 days of the date the surface owner served notice.
  • Finally, if the mineral interest holder fails to file its preservation claim within 60 days, the surface owner can file a notice of failure to file in the appropriate county recorder’s office. This notice cannot be filed before the 60-day window expires, but once filed, the mineral interest shall immediately vest in the surface owner.