Supreme Court of Ohio Holds 1989 DMA Is Not Self Executing

On September 15, 2016, the Supreme Court of Ohio issued a number of decisions concerning the application of the Ohio Dormant Mineral Act (R.C. 5301.56) (DMA). In the lead case, Corban v. Chesapeake Exploration, L.L.C., et al., 2016-Ohio-5796 , the Court held that:

•  The 1989 version of the DMA was not self-executing (i.e., did not automatically transfer ownership of dormant mineral rights to the surface owner of the property by operation of law). Rather, the surface owner must have filed a quiet title action seeking a decree that the dormant mineral interest had been abandoned in order to merge the interests;
•  The 2006 version of the DMA (“2006 DMA”) applies to claims to abandon dormant mineral interests asserted after the effective date of the 2006 DMA (June 30, 2006); and
• The payment of a delay rental during the primary term of an oil and gas lease does not qualify as a “savings event” under the DMA.

These holdings have a significant impact upon the ownership of severed oil and gas interests located within the State of Ohio. We are currently reviewing these decisions and will be publishing a more detailed client alert shortly. Please check back here for additional information.

Click here to read Corban.

UPDATE:  Click here to read our Client Alert on Corban.  Also, see here for a Client Alert on successfully complying with the abandonment procedures under the 2006 version of the DMA.