The Ohio Dormant Oil and Gas Act, codified in Ohio Revised Code Chapter 1509, specifically addresses the issue of abandoned oil and gas wells. Under Ohio law, a well is presumed to be dormant if it has not been operated for a period of five consecutive years. This presumption is a key element in determining the status of a well and the potential responsibilities associated with it. The Act aims to facilitate the plugging and reclamation of these wells, thereby protecting the environment and public safety. The five-year dormancy period is a statutory benchmark that triggers certain legal considerations and potential actions by the Division of Oil and Gas Resources Management. Understanding this specific timeframe is crucial for landowners, operators, and regulatory bodies when assessing the status of oil and gas wells within Ohio.

The core issue in this scenario revolves around the interpretation of an oil and gas lease, specifically concerning the definition of “production in paying quantities.” In Ohio, for a lease to remain in force beyond its primary term, there must be production of oil or gas in paying quantities. This means that the revenue generated from the well must exceed the costs associated with operating and maintaining that well. The calculation to determine if a well is producing in paying quantities involves comparing the gross revenue from the sale of oil and gas against the operational expenses. Let’s assume a hypothetical monthly period for the well: Gross Revenue from Oil Sales = 50 barrels * $70/barrel = $3,500 Gross Revenue from Gas Sales = 100,000 cubic feet * $4/1,000 cubic feet = $400 Total Gross Revenue = $3,500 + $400 = $3,900 Operational Expenses: Pumping and Electrical Costs = $800 Labor and Supervision = $600 Repairs and Maintenance = $400 Taxes and Royalties (for the purpose of this calculation, we consider these as direct operational costs impacting profitability for the lessee, though royalty is technically a share of production) = $700 Marketing and Transportation = $200 Total Operational Expenses = $800 + $600 + $400 + $700 + $200 = $2,700 Net Revenue = Total Gross Revenue – Total Operational Expenses Net Revenue = $3,900 – $2,700 = $1,200 Since the net revenue ($1,200) is positive and exceeds the operational expenses, the well is producing in paying quantities. The key legal principle in Ohio, as established in case law and implied in standard lease provisions, is that “paying quantities” is determined by whether the well generates revenue exceeding its operating costs, allowing the lessee a reasonable profit, not merely covering direct lifting costs. The lease will continue in force because the well is capable of yielding a profit to the lessee over and above the expenses incurred in operating it. The existence of a profit, however small, is sufficient to maintain the lease. The lease termination hinges on the economic viability of the well for the operator.

The Ohio Dormant Oil and Gas Act, codified in Ohio Revised Code Chapter 1509, addresses the issue of abandoned oil and gas wells. Specifically, ORC Section 1509.39 establishes the procedures for identifying and plugging such wells. The act requires the Division of Oil and Gas Resources Management to maintain a list of wells that have been inactive for a specified period, typically five years, and for which no production records have been filed. When a well is deemed dormant, the landowner or any other interested party can petition the Division to have it plugged. The Division then initiates a process to notify the last known owner or operator of the well. If the owner or operator cannot be found or fails to plug the well within a statutory timeframe, the Division is authorized to plug the well itself. The costs associated with plugging a dormant well by the Division can be recovered from the owner or operator, or if they cannot be identified or are insolvent, the costs may be borne by the state through specific funds established for this purpose, such as the Oil and Gas Reclamation Special Account. This process aims to protect the environment and public safety by ensuring that abandoned wells are properly sealed to prevent groundwater contamination and surface hazards. The act also outlines potential liabilities for failure to comply with plugging requirements.

The Ohio Dormant Oil and Gas Act, codified in Ohio Revised Code Chapter 1509, addresses the abandonment and reclamation of oil and gas wells. Specifically, Ohio Revised Code Section 1509.121 outlines the requirements for a surety bond or other acceptable financial assurance for a well that has been inactive for a specified period. The Act requires that a well be plugged and abandoned if it has not been used to produce oil or gas in paying quantities for a period of twelve consecutive months. However, the Act also provides for a grace period or an extension if the well operator demonstrates an intent to resume operations or if the well is being maintained for future production. Ohio Revised Code Section 1509.121(C) mandates that if a well has been inactive for five consecutive years, the Division of Oil and Gas Resources Management shall provide notice to the owner of record and the operator of record. Following this notice, if the well is not plugged or if an application for extension or exemption is not filed within sixty days, the Division may order the well to be plugged. The Act also allows for extensions of time for plugging if the operator can demonstrate a good faith effort to resume production or if the well is being held for future economic viability, subject to approval by the Chief of the Division. The concept of “paying quantities” is crucial here, meaning the well is producing enough oil or gas to cover the costs of its operation and yield a profit. If a well has been inactive for five consecutive years, the Division of Oil and Gas Resources Management is statutorily required to initiate a notice process.

The Ohio Department of Natural Resources (ODNR) Division of Oil and Gas Resources Management oversees the issuance of drilling permits. Ohio Revised Code (ORC) Section 1509.05 governs the application for and issuance of such permits. Specifically, ORC 1509.05(A) requires an applicant to file a permit application with the Chief of the Division of Oil and Gas Resources Management. This application must include a map showing the location of the proposed well, the surface casing and cement program, and a sworn statement that the applicant has a right to a royalty interest in the oil or gas produced from the proposed well or has made a good faith effort to obtain such a right. The statute also mandates that the applicant provide notice to the owners of record of the tract of land on which the well is to be drilled and to the owners of all adjoining tracts of land. This notice must be given at least ten days prior to the filing of the application. ORC 1509.05(B) further details the contents of the application, including information about the proposed well’s construction, production, and potential impact. The Chief then reviews the application for completeness and compliance with all applicable laws and regulations, including those pertaining to well spacing, environmental protection, and safety. If the application is complete and meets all requirements, the Chief shall issue the permit. Failure to provide proper notice or meet any of the statutory requirements can lead to denial of the permit.

The Ohio Dormant Oil and Gas Act, codified in Ohio Revised Code Chapter 1509, specifically addresses the issue of abandoned oil and gas wells and provides a framework for their plugging and reclamation. The Act establishes a process for identifying and reporting dormant wells and outlines the responsibilities of landowners, operators, and the state in managing these wells. A key component of the Act is the creation of the Oil and Gas Well Plugging and Reclamation Fund, which is administered by the Chief of the Division of Oil and Gas Resources Management. This fund is designed to finance the plugging and reclamation of wells that are deemed abandoned and for which no responsible party can be identified or held liable. The Act defines a “dormant well” and sets forth procedures for its assessment and potential plugging. The Chief has the authority to order the plugging of a dormant well if it is determined to be a threat to public health, safety, or the environment. The funding for such plugging operations primarily comes from the aforementioned fund, which is supported by severance taxes and other fees collected under Ohio’s oil and gas laws. Therefore, the primary mechanism for addressing the plugging of dormant wells in Ohio, when no responsible operator can be found, is through state-administered funds derived from the industry.

The Ohio Department of Natural Resources (ODNR) Division of Oil and Gas Resources Management is responsible for regulating oil and gas activities in the state. A key aspect of this regulation involves the permitting process for horizontal wells, which are increasingly common in Ohio due to the Utica and Point Pleasant shale formations. Ohio Revised Code (ORC) Section 1509.05 outlines the requirements for obtaining a permit to drill an oil or gas well. This section, along with associated administrative rules found in the Ohio Administrative Code (OAC) Chapter 1501:9, details the information an applicant must submit. For a horizontal well, the application must include a map showing the proposed well location, surface owner consent or waiver, and a detailed drilling plan. Crucially, ORC 1509.05(B)(1) requires the applicant to provide a geological report or other information demonstrating that the proposed well can be drilled and operated in compliance with the law. For horizontal wells, this often involves a detailed description of the proposed horizontal displacement and target formation, along with an analysis of potential impacts on adjacent properties and the environment. The permit application must also specify the casing and cementing program designed to protect groundwater and prevent the migration of oil, gas, and water. The ODNR reviews this information to ensure compliance with all applicable statutes and rules, including those related to well spacing, setbacks, and the prevention of pollution. The issuance of a permit is contingent upon the satisfactory demonstration that the proposed operation will be conducted in a safe and environmentally sound manner, protecting public health and safety and the natural resources of Ohio. The definition of “displace” in the context of horizontal drilling refers to the lateral extent of the wellbore from the vertical axis of the surface location. Ohio law requires that this displacement be identified and controlled.

In Ohio, the concept of unitization is crucial for the efficient and economic development of oil and gas resources, particularly in the context of horizontal drilling and hydraulic fracturing which often span multiple leaseholds. Ohio law, primarily through the Ohio Department of Natural Resources (ODNR) and specific statutes like Ohio Revised Code (ORC) Chapter 1509, empowers the Chief of the Division of Oil and Gas Resources Management to order the integration of separately owned or leased tracts into a drilling unit. This order is typically issued when an applicant demonstrates that a proposed unit is necessary to drill and operate a well to obtain a fair share of the oil and gas, and that the applicant has made reasonable efforts to obtain voluntary agreements for unitization. The process involves notice to all affected parties, a hearing, and a determination by the Chief that the unit is necessary and fair. The unitization order dictates the location of the well, the allocation of production among the royalty owners within the unit, and the costs associated with drilling and operation. The allocation of production is generally based on the relative surface acreage of each tract within the unit, or another method deemed fair and equitable by the Chief, considering factors like the location of the well and the geological data. This ensures that owners whose lands are included in the unit receive their proportionate share of the produced hydrocarbons, preventing the wasteful practice of drainage and promoting correlative rights. The primary objective is to ensure that each owner of an interest in the pool of oil and gas is afforded the opportunity to recover their just and equitable share of the production.

The Ohio Dormant Oil and Gas Act, codified in Ohio Revised Code Chapter 1509, specifically addresses the abandonment and reclamation of oil and gas wells. The core of this legislation aims to prevent the proliferation of orphaned and abandoned wells that pose environmental and safety risks. Under Ohio law, a well is presumed abandoned if it has not produced oil or gas in commercial quantities for a period of twelve consecutive months. However, the Act provides a mechanism for a well owner or operator to avoid this presumption of abandonment. This involves filing a declaration of dormant status with the Chief of the Division of Oil and Gas Resources Management. This declaration must specify the well’s identifying information, its current condition, and a plan for future operations or maintenance. Crucially, the Act requires that such a declaration be filed within a specified timeframe after the cessation of production. If a well is deemed abandoned and no responsible party can be identified or held accountable, the state may undertake reclamation efforts, often funded through severance taxes or specific state funds. The intent is to ensure that wells are either actively producing, properly plugged and abandoned according to regulatory standards, or managed in a way that mitigates potential harm, thereby protecting Ohio’s natural resources and public safety.

The Ohio Dormant Oil and Gas Act, codified in Ohio Revised Code Chapter 1509, specifically addresses the abandonment and reclamation of oil and gas wells. When an oil and gas well is deemed inactive and no production or plugging operations have occurred for a specified period, typically five years under Ohio law unless extended by specific circumstances, it can be considered dormant. The Act places the responsibility for the proper plugging and abandonment of such wells on the current owner of the well or the current owner of the land on which the well is located. Ohio Revised Code Section 1509.12 mandates that the Chief of the Division of Oil and Gas Resources Management must be notified of any well that becomes inactive. Furthermore, Ohio Revised Code Section 1509.15 outlines the procedures and requirements for plugging oil and gas wells to prevent the escape of oil or gas and to protect the groundwater and surface waters. This includes the proper sealing of the wellbore with cement and other materials. Failure to comply with these plugging requirements can result in penalties and the state undertaking the plugging, with costs assessed against the responsible parties. Therefore, the current landowner is ultimately responsible for ensuring that any dormant wells on their property are plugged in accordance with state regulations to protect public health and the environment.

The core issue in this scenario revolves around the application of Ohio’s statutory framework for oil and gas well spacing and pooling, specifically concerning the concept of a “unit.” Ohio Revised Code Section 1509.24 grants the Chief of the Division of Oil and Gas Resources Management the authority to establish drilling units for the prevention of waste and the protection of correlative rights. The statute defines a drilling unit as the “surface acreage contained within a circle having a radius determined by the chief, which shall be not less than 660 feet nor more than 2,500 feet.” Furthermore, ORC Section 1509.25 addresses the pooling of interests within a unit, stating that if a well is drilled to a pool, all owners of oil and gas rights in the drilling unit shall share in the production. The statute specifies that the pooling shall be in proportion to the undeveloped acreage in the drilling unit held by each owner. In this case, the established drilling unit has a radius of 1,000 feet, meaning its area is \( \pi \times (1000 \text{ feet})^2 \). The total acreage of the unit is therefore \( \frac{\pi \times (1000 \text{ feet})^2}{43560 \text{ square feet/acre}} \approx 72.17 \text{ acres} \). Ms. Albright owns 20 acres within this unit. Therefore, her proportionate share of the production, assuming the well is productive and the unit is fully developed, would be \( \frac{20 \text{ acres}}{72.17 \text{ acres}} \times 100\% \approx 27.71\% \). However, the question asks about the initial allocation of production *before* any such determination is made by the Chief, and before the well is even drilled. The law requires that the operator file an application to create a unit and then pool interests. Until such a unit is officially established by the Chief and an order for pooling is issued, or the parties voluntarily agree to pool, each mineral owner retains their right to develop their acreage independently or to negotiate a lease. The scenario implies a well is being planned for a specific geological formation, and a drilling unit is being considered. The crucial point is that the allocation of production is contingent upon the formal establishment of a drilling unit by the Division and the subsequent pooling order. Without an established unit and a pooling order, or a voluntary agreement, Ms. Albright’s right to the oil and gas beneath her 20 acres remains distinct from her neighbors’ rights, and any production from a well on her property would be hers alone, subject to her lease terms. The question tests the understanding that a drilling unit and pooling order are prerequisites for shared production in Ohio, absent voluntary agreement. The Chief’s authority to set the unit size is discretionary within the statutory bounds. The correct answer reflects the status of ownership and rights *prior* to the formal creation of a pooled unit.

The Ohio Department of Natural Resources (ODNR) Division of Oil and Gas Resources Management is responsible for regulating oil and gas activities in Ohio. Ohio Revised Code (ORC) Chapter 1509 governs oil and gas wells. A key aspect of this chapter is the requirement for a permit to drill, alter, or plug an oil or gas well. The permit application process involves submitting specific information to the Chief of the Division of Oil and Gas Resources Management. This information includes details about the proposed well, the land where it will be located, and the methods to be used for drilling and plugging. Furthermore, ORC 1509.06 outlines the requirements for the bond or other security that must be posted to ensure compliance with the law and the proper plugging of the well. This bond serves as financial assurance that the operator will fulfill their obligations, including plugging the well and restoring the site. Failure to obtain a permit or post the required bond can result in penalties. The intent of these regulations is to protect public health, safety, and the environment, particularly regarding groundwater protection and preventing the contamination of surface waters. The Chief has the authority to deny a permit if the application does not meet the statutory requirements or if there is evidence of a history of non-compliance by the applicant.

In Ohio, the concept of “force majeure” in oil and gas leases is crucial for understanding contract performance under unforeseen circumstances. A force majeure clause typically excuses a party from fulfilling its contractual obligations when events beyond its reasonable control occur. For an oil and gas lease in Ohio, such events might include natural disasters like severe flooding that physically prevents access to a well site, or governmental actions such as an emergency moratorium on drilling. The interpretation of these clauses is heavily fact-dependent and relies on the specific language used in the lease agreement. A key principle is that the event must be the direct cause of the inability to perform, and the affected party must have taken reasonable steps to mitigate the impact of the event. Simply experiencing economic hardship or a decrease in commodity prices generally does not qualify as a force majeure event unless explicitly stated in the lease. The Ohio Supreme Court has consistently held that force majeure clauses are to be interpreted narrowly, meaning that the event must fall squarely within the enumerated list of qualifying events in the clause, or be analogous to those listed events. Therefore, a lessee seeking to invoke force majeure must demonstrate that the event was indeed unforeseeable, unavoidable, and directly prevented operations, and that they took all reasonable efforts to overcome the impediment.

The Ohio Dormant Oil and Gas Act, codified in Ohio Revised Code Chapter 1509, specifically addresses the abandonment and reclamation of oil and gas wells. When an oil and gas well is deemed inactive or dormant, certain responsibilities fall upon the owner or operator. Ohio law requires the plugging and abandonment of such wells to prevent environmental harm, particularly to groundwater and surface water resources, and to ensure public safety. The Act outlines a process for identifying dormant wells and specifies the duties of the well owner or operator in plugging and abandoning them. Failure to comply with these provisions can result in penalties and the state undertaking reclamation efforts at the owner’s expense. The Act’s intent is to manage the legacy of oil and gas extraction and to ensure that inactive wells do not pose ongoing environmental risks. This includes a duty to plug and abandon wells that have been inactive for a specified period, typically defined by regulation or statute, and to properly seal them according to prescribed methods to prevent migration of oil, gas, or water. The responsibility for proper plugging and abandonment rests with the current owner or operator of the well, even if they were not the original driller. This is a critical aspect of responsible resource management in Ohio’s oil and gas industry.

The Ohio Department of Natural Resources (ODNR) Division of Oil and Gas Resources Management is responsible for regulating oil and gas activities in Ohio. Ohio Revised Code (ORC) Section 1509.08 establishes the requirements for the plugging of abandoned wells. When an oil or gas well becomes plugged and abandoned, the owner or operator is required to file a final report with the Chief of the Division of Oil and Gas Resources Management. This report must include a detailed description of the plugging procedures, the materials used, and the location of the well. The Chief then reviews this report to ensure compliance with the regulations. If the Chief finds that the plugging has been done in accordance with the law, they will issue a certificate of completion. This certificate serves as official documentation that the well has been properly plugged and abandoned, thereby protecting groundwater and preventing surface damage, as mandated by Ohio law to ensure public safety and environmental protection. The process is designed to prevent migration of oil, gas, and water between geological strata and to the surface.

The Ohio Dormant Oil and Gas Act, codified in Ohio Revised Code Section 1509.13 et seq., provides a mechanism for landowners to reclaim mineral rights that have been effectively abandoned by lessees. The core concept is that if a lessee fails to actively produce oil or gas from a leased tract, or engage in operations to commence production, for a continuous period of five years, the lease may be deemed abandoned, and the mineral rights may revert to the landowner. However, the Act includes specific provisions for extending the five-year period. One such provision relates to the payment of shut-in royalties. If a well is capable of producing but is shut-in due to market conditions, regulatory requirements, or other valid reasons, and the lessee continues to pay shut-in royalties to the landowner as stipulated in the lease, this payment interrupts the five-year abandonment period. The Act requires that these shut-in payments be made in accordance with the lease terms, typically on an annual basis. For a lease to be preserved through shut-in payments, the payments must be current and made to the correct parties entitled to receive them. If the lessee fails to make these payments as required, the lease can still be considered abandoned. Therefore, the critical factor in preserving a lease through shut-in royalties is the timely and proper payment of those royalties, which demonstrates the lessee’s intent to hold the lease and their continued efforts to develop the mineral estate, even if production is temporarily suspended.

The Ohio Department of Natural Resources (ODNR) Division of Oil and Gas Resources Management oversees the permitting and regulation of oil and gas wells in the state. A significant aspect of this regulation involves the spacing and pooling of wells to prevent waste and protect correlative rights. Ohio law, particularly under Chapter 1509 of the Ohio Revised Code, addresses these issues. Specifically, Ohio Revised Code Section 1509.21 grants the Chief of the Division of Oil and Gas Resources Management the authority to establish drilling units and to pool interests within those units. When a permit is issued for a well to be drilled within a unit, and there are non-participating royalty owners within that unit, the permittee must make a good faith effort to obtain a voluntary agreement for pooling their interests. If a voluntary agreement cannot be reached, the Chief may, after notice and hearing, issue an order pooling the interests. The pooling order dictates how production is allocated and royalties are paid to the various interest owners within the unit. The law aims to ensure that each owner of an interest in the tract or tracts comprising a drilling unit receives their just and equitable share of the oil and gas produced from the unit, free from unreasonable expense. This is achieved by prorating production based on the proportion of the tract’s acreage to the total unit acreage, subject to deductions for the actual cost of development and operation. The Chief’s authority to pool is a crucial mechanism for preventing the drilling of unnecessary wells and for ensuring that all owners benefit from the resource, even if they do not directly participate in the drilling operation. The concept of “correlative rights” is central, meaning each owner has the right to produce their fair share of the oil and gas from the common pool.

The Ohio Dormant Oil and Gas Act, codified in Ohio Revised Code Chapter 1509, addresses the abandonment and potential reversion of oil and gas leases. A critical element of this act is the definition of “production in paying quantities.” For a lease to remain active under the Act, there must be continuous production that generates revenue exceeding the costs directly associated with that production. This is often determined by a reasonable period of time, typically one year, to assess profitability. If a lessee ceases operations or production falls below the threshold of paying quantities, and fails to resume operations or plug the well within a specified timeframe after notice, the lease may be considered abandoned and subject to reversion to the mineral owner. The Act aims to prevent the indefinite holding of leases for speculative purposes without diligent development. In this scenario, the lessee’s cessation of pumping for eighteen months without resuming operations or plugging the well, coupled with the fact that the well’s revenue historically barely covered operating costs, strongly suggests that production has not been in paying quantities. Therefore, the mineral owner has a strong basis to assert abandonment and seek reversion of the leasehold estate, provided proper notice and procedural steps under the Dormant Oil and Gas Act have been followed.

The Ohio Department of Natural Resources (ODNR) Division of Oil and Gas Resources Management oversees oil and gas well permitting and regulation. A critical aspect of this oversight involves the review of permit applications to ensure compliance with Ohio Revised Code (ORC) Chapter 1509 and associated administrative rules. Specifically, ORC 1509.06 mandates that an applicant for a drilling permit must provide a map showing the location of the proposed well, as well as the location of all other wells within a specified distance. The rule regarding this specified distance is found in Ohio Administrative Code (OAC) 1501:9-1-07. This rule dictates that for a proposed new well, the applicant must show all existing wells within 500 feet of the proposed well bore. This requirement is designed to prevent potential interference between wells, ensure proper spacing, and facilitate the accurate identification and management of all oil and gas operations within a given area, thereby promoting safety and efficient resource extraction. The map must be prepared by a licensed surveyor or engineer and accurately depict property lines, lease boundaries, and the precise location of proposed and existing wells.

In Ohio, the definition of “oil and gas” for the purposes of oil and gas leases and related statutes generally includes crude petroleum, natural gas, and all other liquid or gaseous hydrocarbons found in or produced from the earth. This broad definition is critical in determining the scope of rights conveyed by a lease and the applicability of various regulatory provisions. The Ohio Department of Natural Resources (ODNR) Division of Oil and Gas Resources Management is the primary state agency responsible for regulating oil and gas activities, including permitting, drilling, production, and plugging and abandonment. The division’s regulations, found within the Ohio Administrative Code (OAC) Chapter 1501:9, further define terms and establish standards for the industry. For instance, OAC 1501:9-1-01 provides definitions for key terms used throughout the chapter, ensuring consistency in interpretation and application of the law. Understanding these foundational definitions is paramount for anyone involved in oil and gas operations in Ohio, as it dictates legal obligations and property rights. The scope of what constitutes “oil and gas” can impact royalty calculations, the duration of leases, and the extent of the lessee’s rights to explore and produce.

The Ohio Dormant Oil and Gas Act, codified in Ohio Revised Code (ORC) Section 1509.291, provides a framework for addressing dormant oil and gas wells. A well is presumed dormant if it has not produced oil or gas in commercial quantities for a period of five consecutive years. ORC Section 1509.291(A)(1) specifies that the Division of Oil and Gas Resources Management, under the Department of Natural Resources, is responsible for maintaining a registry of dormant wells. The Act allows for the plugging and reclamation of these wells. ORC Section 1509.291(B) outlines the process by which the Division can initiate plugging operations, often after providing notice to the current owner of the mineral rights or the surface owner if the mineral owner cannot be identified or located. The Act also establishes a Dormant Oil and Gas Well Fund, financed through various fees and assessments, to cover the costs associated with plugging and reclamation when responsible parties cannot be found or are unable to perform the work. The primary objective is to protect public health, safety, and the environment from the potential hazards posed by abandoned and unmaintained wells, such as migration of oil or gas, contamination of groundwater, and surface damage. The Act is a critical component of Ohio’s regulatory scheme for managing the legacy of oil and gas exploration and production within the state.

The Ohio Dormant Oil and Gas Act, codified in Ohio Revised Code Chapter 1509, specifically addresses the abandonment and potential reversion of oil and gas rights. Under ORC §1509.12, an oil and gas well is presumed to be abandoned if it has not been operated or has not produced oil or gas for a continuous period of twelve months immediately preceding the filing of a complaint under the section. This presumption can be rebutted by evidence showing that the well was operated or produced during that period. The Act further outlines procedures for a landowner to petition the Chief of the Division of Oil and Gas Resources Management to declare a well abandoned, which can lead to forfeiture of the mineral rights to the surface owner if certain conditions are met and no objection is raised by the mineral rights holder. The core concept is the continuous period of non-operation or non-production to establish abandonment, with a specific statutory timeframe triggering the presumption. The Ohio Supreme Court has interpreted “operated” broadly to include maintenance and preparatory activities, but the statutory twelve-month period remains the critical threshold for the initial presumption of abandonment.

The Ohio Dormant Oil and Gas Act, codified in Ohio Revised Code Chapter 1509, specifically addresses the abandonment and potential reclamation of oil and gas wells. When an oil and gas well has not produced oil or gas for a continuous period of twelve months, it is presumed to be dormant. This presumption can be rebutted by evidence of diligent efforts to return the well to production. If a well is deemed dormant, the landowner or a subsequent operator may have rights to plug and abandon the well and, in some circumstances, to recover costs. Ohio law emphasizes the importance of proper plugging and abandonment to protect groundwater and prevent environmental contamination. The Act also outlines procedures for notifying the Chief of the Division of Oil and Gas Resources Management and for obtaining permits for plugging operations. Furthermore, the Act establishes a financial assurance requirement for operators to ensure funds are available for plugging and reclamation. Understanding the triggers for dormancy, the notification requirements, and the potential liabilities associated with dormant wells is crucial for operators and landowners in Ohio. The specific duration of dormancy that triggers these provisions is a key element of the Act.

The Ohio Department of Natural Resources (ODNR) Division of Oil and Gas Resources Management oversees the permitting and regulation of oil and gas wells in Ohio. When a permit application is submitted for a new well, the Division reviews it to ensure compliance with Ohio Revised Code (ORC) Chapter 1509 and its associated administrative rules. Key aspects of this review include the proposed well’s location relative to existing structures and property lines, the integrity of the proposed well construction and casing program to prevent groundwater contamination, and the plan for waste disposal and site reclamation. Ohio law, specifically ORC Section 1509.05, mandates that an applicant for a drilling permit must provide evidence of financial responsibility, typically through a surety bond or other approved financial assurance, to cover plugging and reclamation obligations. The amount of the bond is determined by the Chief of the Division of Oil and Gas Resources Management, considering factors such as the type of well, the geological formations to be penetrated, and the potential environmental risks. For a horizontal well drilled in Ohio, the bond amount is generally higher than for a vertical well due to the increased complexity, longer horizontal displacement, and potential for greater environmental impact. The ORC also outlines procedures for public notice and objections to permit applications, allowing interested parties to raise concerns. The Division’s review process is designed to balance the state’s interest in oil and gas development with the imperative to protect public health, safety, and the environment, including the state’s water resources.

The Ohio Dormant Oil and Gas Act, codified in Ohio Revised Code Chapter 1509, addresses the abandonment and reversion of oil and gas rights. Specifically, ORC § 1509.12 governs the notice requirements for a mineral owner to reclaim dormant oil and gas rights. This statute mandates that a notice of intent to reclaim must be filed with the Division of Oil and Gas Resources Management and served upon the current holder of the mineral rights. The notice must contain specific information, including the legal description of the property, the names of the current mineral rights holders, and a statement of the owner’s intent to reclaim the rights. The purpose of this notice is to inform the existing mineral rights holder of the owner’s claim and provide an opportunity for them to respond or object. Failure to comply with these notice provisions can render the reclamation attempt invalid. Therefore, understanding the precise content and procedural requirements of the notice under ORC § 1509.12 is crucial for a successful reclamation of dormant oil and gas rights in Ohio.

The scenario describes a situation where an oil and gas lease in Ohio has been in effect for its primary term, and production has ceased on a particular well. The question hinges on the interpretation of the “cessation of production” clause and its implications under Ohio law, specifically concerning the lease’s continued validity. Ohio law, like many oil and gas producing states, recognizes the importance of maintaining leases through diligent development or continuous operations. A common lease provision is a “cessation of production” clause, often referred to as a “dry hole” or “shut-in” clause, which allows the lessee a grace period to resume operations or commence drilling on another well on the leased premises after production ceases from an existing well, thereby preventing the lease from terminating. This grace period is typically specified in the lease itself. Without such a clause, or if the period has expired, the lease could terminate automatically for failure to produce. The Ohio Department of Natural Resources (ODNR) Division of Oil and Gas Resources Management oversees these matters, and case law in Ohio, such as interpretations of force majeure clauses or implied covenants, can also influence outcomes. However, the direct mechanism for continuing a lease after production stops from a producing well is usually the cessation of production clause. If the lease explicitly states a period, such as 90 days, within which operations must resume after cessation, and the lessee fails to meet this condition, the lease will terminate by its own terms, unless other provisions like a shut-in royalty clause or a force majeure event excuse the delay. Assuming no such excusing event or clause is present, and the lease specifies a 90-day grace period which has passed without resumption of production or commencement of a new well, the lease would indeed terminate. The concept of paying shut-in royalties is relevant if the well was shut-in due to lack of market, but the question implies a cessation of production, which may or may not be due to market conditions. The critical element is the lease’s specific language regarding the period allowed to resume operations.

The Ohio Dormant Oil and Gas Act, codified in Ohio Revised Code (ORC) Section 1509.26, establishes a framework for addressing inactive oil and gas wells. Specifically, ORC 1509.26(B) outlines the process for a landowner to petition the Chief of the Division of Oil and Gas Resources Management to require a responsible party to plug and abandon a well that has been inactive for a specified period. The Act defines “inactive” as a well that has not produced oil or gas for a period of twelve consecutive months. However, the Act also provides a mechanism for a well operator to maintain a well as “active” even without production, by periodically filing a notice of intent to maintain the well as active with the Chief, along with a reasonable fee, as per ORC 1509.12(D). This notice must be filed within sixty days after the end of each twelve-month period of inactivity. Failure to file this notice or pay the associated fee means the well is presumed to be abandoned. Therefore, for a well to be considered actively maintained and not subject to the landowner’s petition for plugging under ORC 1509.26, the operator must demonstrate compliance with the notice and fee requirements outlined in ORC 1509.12(D) to rebut the presumption of abandonment after twelve months of non-production. The critical period for the landowner’s petition is when the well has been inactive for twelve consecutive months and the operator has not taken steps to maintain its active status through the prescribed notice and fee process.

The Ohio Department of Natural Resources (ODNR) Division of Oil and Gas Resources Management oversees the permitting and regulation of oil and gas operations within the state. When an operator seeks to drill a new well, they must submit an application for a permit to drill. This application process is governed by Ohio Revised Code (ORC) Chapter 1509. Specifically, ORC 1509.05 outlines the requirements for a permit to drill. A critical component of this application is the provision of a map or plat showing the proposed well location and its proximity to specified features, including existing wells, property lines, and public roadways. The statute mandates that the map must be prepared by a registered professional surveyor. Furthermore, ORC 1509.06 details the conditions under which a permit can be denied. These conditions include failure to comply with the provisions of Chapter 1509, insufficient geological or drilling information, or if the proposed operation is found to be detrimental to the public health, safety, or welfare, or to the conservation of oil and gas resources. The requirement for a map prepared by a registered professional surveyor ensures accuracy and adherence to spacing and setback regulations, which are crucial for safe and responsible oil and gas development in Ohio. The applicant must demonstrate that the proposed well will not contaminate any public or private water supply, nor will it unreasonably affect the value of adjacent property. The division reviews these applications to ensure compliance with all statutory and regulatory requirements before issuing a permit.

In Ohio, the concept of correlative rights is fundamental to oil and gas extraction. This principle dictates that each landowner in a common source of supply has a right to a fair and equitable share of the oil and gas in that common source. When one landowner drills wells that drain a significant portion of the common reservoir, they must not take more than their just proportion of the oil and gas. This is to prevent the waste of natural resources and to ensure that no single owner can, through excessive or negligent drilling, capture more than their proportionate share, thereby injuring the rights of other owners in the same pool. Ohio law, particularly through its administrative agencies like the Ohio Department of Natural Resources (ODNR), enforces these correlative rights by regulating drilling and production. The prevention of waste is a key objective, and this includes preventing the inefficient or inequitable extraction of oil and gas. Therefore, a landowner or operator who is draining a common pool must ensure their operations do not unreasonably deplete the reservoir to the detriment of other leaseholders within that pool, adhering to the principle of allowing each owner to recover their fair share.

The Ohio Dormant Oil and Gas Act, codified in Ohio Revised Code Chapter 1509, specifically addresses the abandonment and potential reversion of oil and gas rights. A critical component of this act is the definition of a “dormant oil and gas interest” and the procedures for asserting rights to such interests. For an oil and gas interest to be considered dormant, there must be no production or operations for a continuous period of ten years. During this ten-year period, the owner of the interest must also have failed to record a notice of claim or to file a verified statement with the county recorder, as prescribed by statute. The act outlines a specific process for an owner of the surface estate to acquire a dormant oil and gas interest. This process involves providing notice to the owner of the dormant interest and, if no objection is raised within a statutory period, the interest may be deemed abandoned and pass to the surface owner. The intent of the Dormant Oil and Gas Act is to clarify title and encourage the productive use of oil and gas resources by providing a mechanism to address long-neglected mineral rights. The ten-year period is a key statutory benchmark, and the lack of recorded activity or production is paramount in determining dormancy.