As oil, gas leases expire, property owners should reflect before acting, lawyer advises

By Ed Runyan

runyan@vindy.com

CHAMPION

It’s been nearly five years since BP America signed gas and oil leases with about 2,000 Trumbull County property owners, which means many of those leases are about to expire.

Alan Wenger, the attorney who helped write leases for a group of property owners called the Associated Landowners of the Ohio Valley, or ALOV, outlined several legal moves those property owners might need to take to cause their leases to be released by BP.

However, the greater likelihood is that BP will make that unnecessary by filing one document in the Trumbull County Recorder’s Office in the coming weeks, releasing a lot of the leases at once.

Despite BP leasing 84,000 acres of Trumbull County land in late March 2012, only 15 horizontal wells were drilled in the county, compared with 2,600 drilling permits statewide, Wenger said.

“The boom did not happen,” he said. Of the 15 permits, only one to three wells are still operating, he noted.

A five-year lease typically expires at the end of five years unless a producing well is located on the leased land, according to materials Wenger handed out. If there’s a producing well, the lease can continue.

Wenger advised those in attendance to give BP at least a couple weeks after the five years expires before they think about taking steps to force the release.

Meanwhile, Dale Arnold, director for energy, utility and local government issues with the Ohio Farm Bureau Federation, touched on broader themes related to energy, saying property owners should understand that their property will be of value for a variety of forms of energy production.

“Some of you will get a second bite at the apple,” he said. “You’re going to see a lot of energy development.”

The oil and gas industry has experienced a lot of volatility since about 2014, so property owners should look as far as 30 years into the future when considering ways they can make money off their land, he advised.

“Please, ladies and gentlemen, take your time,” he said.

Besides the mining of natural gas here, be aware of other energy opportunities such as solar and biomass energy and even the storage of natural gas, he said, which takes place in areas of north-central Ohio, but could also take hold in sandstone formations here.

Also, he said, be aware that in places such as Muskingum and Ashtabula counties, leases are being signed in areas where the older style vertical wells have existed for decades. Energy companies are signing leases to get “the rest” of the oil still underground.