American Oil and Gas Reporter - December 2015 - 18

page 14-21_Layout 1 12/1/2015 10:12 AM Page 18

IndustryDigest
Court Ruling Opens
LPC Land Enrollment

BOISE, ID.-Following a Sept. 1
federal court decision that removed
protection of the lesser prairie chicken
(LPC) under the Endangered Species
Act, the Western Association of Fish &
Wildlife Agencies has announced that
oil and gas companies may again enroll
leases and pipelines in conservation
programs.
WAFWA says candidate
conservation agreements with
assurances provide industry with
predictability for operations should the
LPC again be listed as threatened or
endangered under ESA. The
government listed the bird as threatened
in May 2014, but the September ruling
reversed that protection.
In the wake of the court decision, the
U.S. Fish & Wildlife Service has
approved new enrollments by
companies operating within the five
range states of Colorado, Kansas, New
Mexico, Oklahoma and Texas. Under
its conservation agreements, WAFWA
says, companies are required to
implement conservation benefits for the
birds, and pay enrollment and impact
fees for unavoidable impacts.
WAFWA says it has enrolled more
than 96,000 acres of farm and ranch land
to offset industry development over the
past year and a half. In addition, it has
acquired 1,600 acres in permanent
conservation, and has contracted for 8,900
acres of habitat restoration, which it says
will create new habitat for the species.
"Since this program began in 2014,
more than 180 oil, gas, wind, electric
and pipeline companies have enrolled 11

million acres across the five states, and
have committed $47.5 million for
habitat conservation," says Sean Kyle,
WAFWA's industry services director.
"We have had great support for this
program, and we encourage all
companies not currently participating to
take advantage of this enrollment
opportunity."
WAFWA points out it does not
know how long the enrollment
opportunity will be available. USFWS
has asked a federal judge to reconsider
the Sept. 1 decision, and depending on
the outcome, the new enrollment
period could end suddenly. ❒

Ohio's Mineral Rulings
Still Provide Little Clarity

COLUMBUS, OH.-The Ohio
Supreme Court has issued a second
decision interpreting Ohio's Dormant
Mineral Act in Chesapeake Exploration
LLC v. Kenneth Buell. However, the
Ohio Oil & Gas Association indicates,
the ruling's implications remain unclear
until other ODMA-related cases also
are decided.
According to the association and a
case analysis by Reed Smith LLP, the
ODMA allows a surface owner of a
severed estate to have subsurface oil
and gas rights deemed abandoned and
vested in the surface owner in the
absence of any specified savings
activities, including any recorded title
transactions, within 20 years.
OOGA General Counsel W.
Jonathan Airey of Vorys, Sater,
Seymour and Pease LLP explains that
the case addresses two questions of
state law certified from the U.S. District

Court for the Southern District of Ohio.
That court ruled that a recorded lease
was a title transaction sufficient to
prevent the subject mineral rights from
being deemed abandoned under the
statute. The court also held
unanimously that an unrecorded oil and
gas lease did not qualify as a title
transaction, Airey says.
"OOGA tends not to get involved
with ODMA because many of the
members have differing views on the
issue," he says. "However, in this case,
the association decided it needed
clarification and certainty."
The association filed an amicus brief
arguing that oil and gas leases should not
be considered a license, Airey continues,
which concurs with a previous court
decision. Instead, OOGA's amicus brief
argues that leases should be considered a
fee simple determinable, or an interest in
real estate.
According to the association,
Chesapeake is the second major Ohio
Supreme Court decision interpreting the
ODMA, following Dodd v. Croskey in
June, (AOGR, July 2015, pg. 15). Airey
remarks that there are at least three more
ODMA-related cases on which the
Supreme Court has yet to rule, and that
OOGA members will not experience
any major impacts from them until late
2016, at least.
"This is one of many ODMA cases,
and there are more rulings to come
about how the act should be applied and
interpreted," he remarks. "The court
will have to answer questions such as
'What is a title transaction?' and 'Is the
act self-executing?'
"All this uncertainty in the initial
ODMA and/or its amendment in 2006
has led to an immense amount of

QDME
Quick Data Management Evaluation

Achieve Better Business Decisions with Clean, Quality Data
Evaluating: Data Sources * Data Quality * Completeness * Correctness * Confidence
Delivering: Prioritization * Business Benefits * Observations * Conclusions * Recommendations

www.istore.com * info@istore.com * +1.713.787.6798
18 THE AMERICAN OIL & GAS REPORTER

American Oil and Gas Reporter - December 2015

Table of Contents for the Digital Edition of American Oil and Gas Reporter - December 2015