“The basic underlying theme of oil and gas law is still undeniably rooted in property concepts developed over the past 1000 years.”

Bruce Kramer, “The Mangling of Common Law Property Concepts”,
33 Washburn Law Journal 540, 568 (1994)

If you own land in Ohio, do you own the oil and gas under your feet?
We expect that most landowners would say, “Yes.” It would seem to follow, as our concept of land ownership is that one’s property includes, as they say, everything to the heavens and to the center of the earth. That concept has served us well in many aspects of real property law, but it has its limits. If a plane flies over your property is it trespassing? Closer to the point, if there is a wild raccoon on your land, do you own it? Is oil and gas like coal and trees or more like moving water? If you do own the oil and gas under your property, your property is more valuable, isn’t it? Can you be taxed for that value?
Can you

  • use it as security and grant a mortgage in it?
  • leave it to your children in your will?
  • sever your rights from the ownership of the surface?
  • lease your rights to it like an apartment?

On the other hand, if the landowner cannot own oil and gas in place (which is apparently the case in Ohio, like other “non-ownership” states), what is being bought and sold in that oil and gas lease? If the lease, or some later document provides for an overriding royalty interest, what is that? Does it need to be recorded at the county recorder’s office as an interest in real estate? Need it be probated upon the death of its owner? Or, is it merely the right to receive a payment, i.e., personal property? More basically, what is the difference between a mineral interest and a royalty interest?Continue Reading Ownership of Oil and Gas in Ohio