The Supreme Court of Ohio rendered its first decision today regarding Ohio’s Dormant Mineral Act in the case of Dodd v. Croskey, with significant implications for landowners and owners to mineral rights involving Utica Shale.
In a unanimous decision, the Supreme Court ruled that under the 2006 amendments to the statute, after an owner of surface land gives notice of their intent to declare the mineral interest abandoned, the holder of the mineral rights can preserve their rights by timely filing an affidavit with the county recorder. The affidavit must state the nature of the mineral interest, the recording information upon which the claim is based, and that the mineral holder intends to preserve the mineral interest. This decision has significant implications affecting and preserving the rights of oil/gas mineral holders in Ohio. McDonald Hopkins represented a group of the mineral holders in this case.
The Dormant Mineral Act governs the ownership rights of minerals that have been severed from the surface lands. It is a common practice for landowners to retain mineral rights when they sell their land. The Dormant Mineral Act established conditions and procedures by which the ownership of mineral rights are preserved with the mineral holder or abandoned to the owner of the surface lands. Under the original 1989 statute, the conditions (referred to as “savings events”) by which a mineral holder could preserve the mineral interest from being deemed abandoned included, for example, actual production or withdrawal of minerals, the issuance of a drilling or mining permit, or the mineral interest being the subject of a title transaction.
Most significantly, the Supreme Court determined that at least under the 2006 amendments to the Dormant Mineral Act, the mineral holder can preserve their mineral interest upon the timely filing of the affidavit even if there had been no prior savings events that would otherwise have been required to preserve the mineral interest. The Supreme Court ruled that the affidavit did not have to refer to a prior savings event nor did the affidavit itself have to be filed in the 20 years preceding notice by the surface owner.
The Supreme Court specifically noted that it was not ruling on the issue of when to apply the 1989 original version of the Dormant Mineral Act and when to apply the 2006 version. These issues will be determined in subsequent cases still pending before the Court.
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