Landowners who leased their mineral rights but have not had any drilling activity may be able to improve their positions as the end of their leases’ primary terms approach, a leading Ohio oil and gas lawyer says.
Alan D. Wenger, chair of the oil and gas law practice group at Harrington, Hoppe & Mitchell, Ltd., noted that thousands of leases local property owners signed with energy companies in 2011 and 2012 are expiring - often at the five-year mark – a key milestone at which many landowners can take steps to establish that the lease is terminated.
"There are several reasons a landowner may want to act on provisions in these leases or in the law that facilitate their termination when certain conditions prevail," Wenger said. "For one, an expired but unterminated lease could restrict the owner’s ability to sell or mortgage the property.
“Also, if another developer becomes interested in the oil and gas rights, negotiations could be easier with an expired lease out of the way. Clear title might also give the landowner better leverage if the original lessee were to express renewed interest.
"Finally, just taking the affirmative step of declaring the lease expired might spur the lessee to offer some payment to extend the lease in hopes of an industry rebound."
Connect with us on Facebook and Twitter!