August 25, 2014 Articles

Five Things You Should Know about the Ohio Dormant Mineral Act

A guide to the law and court opinions surrounding mineral interests in the state of Ohio.

By Ariel Forbes – August 25, 2014

1. The Ohio Dormant Mineral Act (ODMA) has two different versions, and the variations among Ohio courts in interpreting and applying each version has resulted in a flurry of litigation.

The 1989 version of the ODMA was enacted on March 22, 1989, and is regarded by some Ohio courts as a “use it or lose it” statute. Under the 1989 version, a mineral interest “shall be deemed abandoned and vested in the owner of the surface” if the mineral interest owner did not “use” its mineral rights during a 20-year period. Ohio Rev. Code § 5301.56(B)(1)(c) and (B)(2) (1989). The 1989 version of the ODMA does not specify any procedure for notice to the mineral-interest owner about an abandonment claim, for the holder of the mineral rights to contest the alleged abandonment, or for anyone to record the abandonment.

In 2006, the ODMA was substantially revised to clarify the procedure for declaring a mineral interest abandoned and vested in the surface owner. According to the 2006 version, a surface owner must comply with a multipart process before the mineral estate will merge with the surface estate, including the following steps:

  • Confirm that the mineral interest has not been used within the preceding 20-year period by being the subject of a “savings event.” Such events include a “title transaction filed or recorded in the county recorder’s office,” production of oil or gas, underground-storage operations involving the mineral interest, issuance of a drilling or mining permit, the recording of an affidavit to preserve the mineral interest, and the creation of a separate tax-parcel number for the severed mineral interest. Ohio Rev. Code § 5301.56(B).
  • Serve notice by certified mail on the mineral-interest holder (or the holder’s successors or assignees) of the surface owner’s intent to declare the mineral interest abandoned, or publish such notice. Id. § 5301.56(E)(1).
  • Confirm that the mineral-interest holder has not—within 60 days of service or publication of the notice—recorded a claim to preserve the mineral interest, or an affidavit identifying a savings event. Id. § 5301.56(C).
  • File an affidavit of abandonment in the county recorder’s office at least 30 days, but not more than 60 days, after the date on which the surface owner served or published the notice. Id. § 5301.56(G).

As the result of the significant uptick in value of oil and gas rights in the Utica Shale in recent years, Ohio courts have witnessed a flood of lawsuits brought by surface owners claiming mineral abandonment under the 1989 or 2006 versions of the ODMA. One question that Ohio courts have faced is which version of the statute to apply to surface-owner claims brought post-2006, where the surface owner is claiming that abandonment occurred at a time when the 1989 version of the ODMA was still in effect. This question has yet to be determined by the Ohio Supreme Court but is currently one of several certified issues before the court, as discussed below.

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