Deciding an issue of first impression in the state, Ohio’s Seventh District Court of Appeals recently held that oil and gas royalty interests may be abandoned under the Ohio Dormant Mineral Act (ODMA). See Devitis v. Draper (Mar. 20, 2017).
In Draper, the court first looked to its prior decision, Pollock v. Mooney, which found that royalty interests are subject to extinguishment under the Ohio Marketable Title Act (OMTA), of which the ODMA is a part. In Pollock, the court relied on broad language in the OMTA that applied the act’s provisions to “all interests, claims, or charges whatsoever.” While noting that the language of the ODMA is different, the Draper court found that “parallels can be drawn” because the ODMA’s definition of “mineral interest” was also broad, and included the catch-all phrase “regardless of how the interest is created and of the form of the interest.” Moreover, the court found that conceptually, a royalty interest is simply one “stick” within the bundle of attributes comprising the mineral estate, and that it may be separately transferred. Therefore, a royalty interest fell within the definition of a “mineral interest” under the ODMA.
The Draper court went on to find that the particular royalty interest at issue, while potentially subject to abandonment under the ODMA, was preserved through the timely filing of a claim of preservation.