Ohio Supreme Court to Decide 1950’s Oil Lease Fate

The Ohio Supreme Court’s decision on an oil and gas rights case argued in Columbus is pending. The case involves landowner rights and natural gas leaking. Two Marietta law firms are arguing on behalf of their clients.

Patricia Schultheiss, a landowner with 48 acres of land, filed a lawsuit to terminate a contract on her land with Heinrich Enterprises. Schultheiss, represented by the Fields, Dehmlow and Vessels law firm, asked the Washington County Common Pleas Court to end the contract with Heinrich Enterprises.

The landowner claims that there was no profitable production on the land between 1977 and 1981, which she said satisfies the lease agreement.

Schultheiss isn’t seeking monetary damages from the lawsuit. The goal of the suit is to clear her land from the current lease on the property.

Heinrich Enterprises, represented by the Theisen and Brock law firm, argues that their client provided Schultheiss with free natural gas since 1977 and that the lease is not terminated. Justice Judith French asked if Schultheiss continuing to receive natural gas in place of her royalty was discussed in the lower courts.

Heinrich Enterprises claims that while they didn’t bring up the estoppel argument, Schultheiss received natural gas under her lease agreement, which is one of the benefits in the original lease. The defense argues that the termination of the lease should have been brought to court when the well was not producing commercial gas rather than 30 years later.

Schultheiss’ attorneys argue that the lease was terminated under its own terms. The law firm also questions whether proper maintenance was done on the well. The attorneys suggest that the gas to heat Schultheiss’ home may have been there without proper maintenance performed.

The court may take six months to come to an agreement.

The well on the property dates back to a 1950 lease, with the well completed in 1951. The documents state gas from the well was never produced after 1981 and that production came from another well on the property.

Heinrich, who acquired the lease to the well in 1981, argues that the company provided royalty payments in the form of free natural gas that kept the lease active. Schultheiss’ attorneys state that the courts have decided in favor of landowners in the past in comparable cases.

The case’s decision is eagerly awaited by local oil companies and will have an impact on small oil and gas companies if the courts side with Schultheiss.