The Eastern Ohio Utica Group LLC (EOUG) was formed in March of 2012 to assist landowners in leasing their oil and gas rights. The two founding members are D. William Davis, attorney at law and retired county court judge, and A.J. Smith, professional land surveyor. We are local professionals with the goal of providing a lease agreement that is fair to the residents and business entities of the Ohio Valley. We operate our business within the corporate limit of Bridgeport and want to see the best for its citizens.
We recently attended a meeting of the Bridgeport Village Council to express interest in presenting a lease to the village. We were only there to introduce our company and to address any questions concerning our lease agreement. We also pointed out that this sort of contract would need to be advertised in the local newspaper and open to bidding by any interested oil and gas producers in accordance with Chapter 721.03 of the Ohio Revised Code.
As to the matter regarding the mineral rights underlying the streets and alleyways, it was related that this type of property is not considered real estate as sold and conveyed in fee simple. This land was originally dedicated to the public use for street purposes and remains in the public domain as a right of way. A right of way is a surface usage and does not always include mineral rights, such as coal, oil, gas, and other deep strata. These lands, or parcels, are not assigned a tax parcel number by the county auditor. With this being said, we have learned in our negotiations with the oil and gas industry, that they normally do not include such property in the context of the lease agreement due to the said uncertainty and the liability that may be involved. The company land agents prefer to work with parcel identification numbers in the course of title investigations. However, companies are known to pay a royalty on the substances produced and sold if the land becomes part of a drilling unit as permitted by the Ohio Department of Natural Resources and no objections are raised.
Furthermore, let it be understood that we are not trying to sway the village into signing a lease agreement through our landowner group. This is only an option, as we are proposing to submit a bid package on behalf of Great River Energy LLC. The mayor and Village Council are quite free to research the situation and compile a set of requirements as they see fit. The entire content of any lease agreement presented should be taken into consideration before acceptance.
We also recommend that Council retain a village solicitor to assist in making such a decision. A professional is needed who understands real estate and municipal law as it relates to the matter at hand, and to give advice on other legal issues the village may encounter. Chapter 705.11 of the Ohio Revised Code outlines the duties of the village solicitor and states, "No contract with the municipal corporation shall take effect until the approval of the village solicitor or city director of law is indorsed thereon."
D. William Davis
A. J. Smith
Eastern Ohio Utica Group LLC