Much of our practice has been devoted to representing landowners on issues involving oil and gas leases. In the next several articles I will discuss some key concepts that may help make more sense of this challenging field.
The difference between ownership of mineral rights and leasing of mineral rights is one that often confuses landowners and even lawyers. The ownership of the minerals beneath your land is usually part of your ownership of the land as a whole.
The questions deals with the land-owner’s royalty interest in production from an oil and gas lease. Historically, this interest was 1/8 (12.5%) of the net production from a well or wells leased by the landowner. Note that the royalty is a net amount. This allows the producer to subtract production costs from the gross or total production before dividing the proceeds with the landowner.
Judge Robert Rinfret’s decision was the culmination of a civil lawsuit filed in Holmes County Common Pleas Court by Darrell and Dortha Helms against Thomas Whitney and Donald Ridgeway, who lease land and own a well on the Helms’ Brinkhaven property.