Who has standing to challenge abandonment of a mineral interest under the Ohio Dormant Mineral Act (“DMA”)?1Ohio Rev. Code § 5301.56. Earlier this year in two cases, both styled Cardinal Minerals, LLC v. Miller,22024-Ohio-2133 (7th Dist. 2024), jurisdiction declined, 2024-Ohio-5104; and 2024-Ohio-3121, (7th Dist. 2024). the 7th District Court of Appeals of Ohio held that only the record holder of the mineral interest at the time the DMA process is completed, and not a subsequent purchaser of the interest, has standing to challenge the abandonment process.
The court’s holding implies two key points:
- A purchaser who acquires a mineral interest subject to completed DMA filing acquires nothing, because under under Ohio Rev. Code § 5301.56(H)(2)(c), that interest was deemed abandoned and vested with the surface estate upon completion of the DMA process; and
- The only way to revive a statutorily abandoned mineral interest under the DMA is for a holder with proper standing to obtain a judicial determination that the abandonment process was invalid.
I. Background and Facts
The Cardinal cases involved a 36-acre tract of land, and an 80.32-acre tract of land located in Monroe County, Ohio. Through a series of conveyances, S.E. Pfalzgraf and his wife, Emma Pfalzgraf reserved all of the oil and gas in and under both properties (the “Pfalzgraf Interest”).32024-Ohio-2133, ¶ 5 (7th Dist. 2024), jurisdiction declined, 2024-Ohio-5104.
The Millers (Appellees) acquired the surface of the property in the late 1990s and attempted to enter into an oil and gas lease with Eclipse Resources I, LP (“Eclipse”) in 2012. When the Millers received a defect notice indicating that they did not own the oil and gas leasing rights, they hired a title company to perform research on the Pfalzgraf Interest and initiate the abandonment process provided under the DMA. Beginning in August of 2013, the title company published notice of abandonment on behalf of the Millers in the Monroe County Beacon, filed an affadavit of abandonment in the Monroe County Official Records.4Id. at ¶ 8. Notable, notice was only served by publication, rather than on the Pfalzgraf Heirs at their last known addresses, even though they were identified in the Miller’s title search.
Cardinal Minerals, LLC appealed the 7th District’s decisions to the Ohio Supreme Court. The Ohio Supreme Court, however, denied to hear appeals on both cases.
Law clerk Kaitlyn Richard contributed to this article.
Josh Peterson has been a part of the oil and gas industry for the past ten years. His practice focuses on due diligence, complex mineral titles, pooling issues, lease analysis, JOAs, surface use issues and title curative, drilling title opinions, supplemental title opinions and limited acquisition title opinions for oil and gas operators.
Ally is a versatile attorney who helps clients navigate complex legal issues in corporate and property law in the upstream energy sector. She has extensive experience with title curative, mineral title due diligence, drilling, and division order title opinions across Appalachia and Texas. She also represents clients in quiet title actions and oil, gas, and mineral rights transactions.