Preserving/Extinguishing Oil and Gas Interests in the Age of Utica and Marcellus: An Explanation of the Ohio Marketable Title Act and the Ohio Dormant Mineral Act and Their Impact on Pennsylvania Legislation
7 Pages Posted: 29 Apr 2019
Date Written: March 27, 2019
The commercial development of oil and gas in Pennsylvania can be traced back nearly 160 years to Drake’s Well near the city of Titusville, where the first oil boom in the United States officially began. With continued growth and success throughout the 19th, 20th and 21st centuries, the industry matured, causing land and title issues to become increasingly more complex. As oil and gas evolved into a commercially valuable commodity, landowners began to severe and reserve the oil and gas underlying their property. In some instances, these reservations are more than a century old, and locating the current owners of those reservations poses problems for oil and gas operators seeking to secure drilling rights.
Similar to Pennsylvania, the state of Ohio has had a long-standing and impressive history of oil and gas development, beginning with its first commercial oil well near Macksburg in 1860. Ohio has experienced significant growth in the oil and gas industry thanks to the unconventional development of the Utica and Marcellus Shales. That growth has generated economic benefits not only for the state, but also for oil and gas owners. Not surprisingly, this has led to an increase in litigation surrounding ownership of oil and gas rights. Historical owners of oil and gas interests severed decades ago are hoping to realize a profit from their long-held interest, while surface owners are eager to reclaim those severed interests.
Both Pennsylvania and Ohio law provide for methods to facilitate the development of oil and gas where severed interests are concerned. However, recent legal developments in Ohio could serve as a guide to the Pennsylvania General Assembly in crafting a versatile, unambiguous statute that would not overburden the Commonwealth’s Courts. This article will first explore the statutory methods by which Ohio surface owners may claim an abandoned oil and gas interest, as well as recent developments in the associated case law. Second, this article will examine the current Pennsylvania framework for developing abandoned mineral interests in the Commonwealth and discuss statutory proposals moving forward.
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