Having an oil and gas company exploit your mineral interests on your property can be an exciting prospect since you can reap some of the proceeds. However, if you have no experience with oil and gas development in Ohio, you should consider taking some important initial steps in the event an oil and gas developer inquires about your oil and mineral rights. You can avoid some pitfalls and take advantage of important opportunities.
Mineralwise suggests that after being contacted by a developer, you should do some online research. A good place to start is to look up the name of the person who contacted you about your mineral rights. You should also do some checking on the developer as well. From there, you can check out news articles on oil drilling in your area and research the geologic formation that the developer has identified on your land to be drilled.
If your background check of the developer reveals no red flags, make sure your ownership documents are in proper order. These can consist of your land deeds, maps of the land, any previous leases, deeds of trust, easements, mineral or royalty conveyance documents, and any estate documents that relate to your mineral ownership. You should also review these documents in advance of talks with a developer.
Pay special attention to the complexity of your mineral ownership. If you possess more than one tract of land, consider asking for a separate oil and gas lease for each tract to minimize the possibility of complications involving production in the future. Also, you may want to create a business entity if the development deal is large and involves complex issues of how you will receive income from the excavation. If you want to form a new business entity, you will need to switch your mineral ownership to this new business before the lease commences.
Simple preparation can do a lot to preserve your rights and help you avail yourself of opportunities. However, you may need to consult with an experienced oil and gas representation attorney to understand your options, particularly if you are new to oil and gas development. Keep in mind that this article does not present you with actionable legal advice, only general information on this topic.