Southern Ohio Energy Consultants, LLC
Frequently Asked Questions
Question: Can I lease my land to develop the Utica if I already have a lease?
Answer: For most the answer to this question will be no, but that will not be true for everyone. If you're currently in a lease you should consult with an attorney familiar with oil and gas law. Depending on the language in your lease you may or may not be eligible to lease the Utica. The attorney will look for a depth restriction, pugh clause, and the term of your lease along with other items.
There are no cookie cutter answers with oil and gas leases. Each situation is different. Do not assume if you have a well on your property that you are 100% tied up. Do not rely on your neighbor or a friend for the answer to this complicated question. Find a competent attorney and follow his or her advice. The good news is that there are dozens of experienced and competent attorneys in southeast Ohio that can help you understand your lease.
Question: I have a lease and I'm in production but my lease has a unitization clause that only permits a 160 acre unit or pool. I have been told that the Utica development is going to require pooled units of 600, 700, or 800 acres. If this is true will the oil company need my permission before they can put me in a unit larger than the unit size set forth in my lease?
Answer: Yes. If your lease does not permit pooling or unitization or has a clause that restricts a pooled unit to something less than 640 acres it is very likely that at some point in time you will be approached by an oil company to amend the lease so that your land can be put into a larger unit. For those of you who are held by production this may be your only chance to negotiate with the oil and gas company to obtain a cash bonus, a better royalty or more landowner friendly terms.
Question: May the Lessee (Oil Company) use water from my property? Is there compensation for such use?
Answer: Many leases allow the use of water; free of cost to the oil and gas company. It is important to fully understand what you are allowing the oil and gas company to do and take from your property before signing a lease. By joining a landowner group and having an attorney on your side, mineral owners can better protect their property and ensure they are compensated for all resources taken from their land including water.
Question: If I sign a lease can it be assigned to another oil and gas company?
Answer: In most cases the lease you sign will allow the lessee (oil company) to assign all or portions of the rights granted in the lease. Typically, when another company takes an assignment of a lease that is a good thing for the landowner because now another company has paid for the rights to drill and will most likely be motivated to put your minerals to work for you as it would be financially advantageous for them.