Ohio Supreme Court issues another major decision for surface and mineral owners in Ohio

On December 17, 2020, just days after its decision in West v. Bode, the Ohio Supreme Court issued another major decision for surface and mineral owners in Ohio. In Gerrity v. Chervenak, Slip Opinion No. 2020-Ohio-6705, the Court formally weighed in, for the first time, on the level of diligence required by a surface owner who is researching severed mineral interest holders in order to serve a notice of abandonment pursuant to the Ohio Dormant Mineral Act (DMA). R.C. 5301.56 et seq. Appealing a Fifth District decision that upheld the purported abandonment of oil and gas mineral interests created by a 1961 reservation, and attacking the due diligence performed by the surface owners, the mineral owner presented two propositions of law for acceptance by the Court. For more, read the full article

Ohio, Oil & Gas Litigation

Ohio Supreme Court holds that both the MTA and DMA apply to mineral interests in West v. Bode

Ohio oil and gas stakeholders received another landmark decision from the Ohio Supreme Court in West v. Bode. Specifically, the Court held that both the Marketable Title Act (MTA) and the Dormant Mineral Act (DMA) apply to severed mineral interests. Thus, surface owners may utilize either the MTA or DMA to extinguish or abandon previously severed mineral interests, depending on the circumstances. For more, read the full article.

Ohio, Oil & Gas Litigation

Five companies’ innovations are transforming U.S. fracking

New software and hardware products from five lesser-known technology developers are cutting costs and gaining efficiency for hydraulic fracturing pressure pumping units, the Journal of Petroleum Technology reports. Evolution Well Services “uses 100% natural gas-burning turbine generators to feed its custom-designed hydraulic fracturing pumps,” saving $1 million to $1.5 million monthly in fuel costs over diesel, while reducing the number of people needed to complete each well, according to the article. KCF Technologies “has developed vibration sensors that attach to several components of a pumping unit,” which when coupled with a centralized monitoring center, “has resulted in an 80% reduction in unplanned downtime due to machine failures.” An automated control system built by EKU Powerdrives “shuts down a pumping unit whenever it is not needed to pump. . . . resulting in a 90% reduction of idle running time” and extending the life of the unit. IOT-eq developed a field communications system “to move large volumes of data” that can be used to assess equipment fatigue or rapidly assess stage performance. A multipurpose power system developed by MGB Oilfield Solutions “enables companies to decouple tractor-trailers with the pressure pumps, while providing several other support functions,” reducing “the spread’s headcount and footprint on a pad by up to 35%.” For more, read the full article.


Marathon sells Speedway division to 7-Eleven in $21-billion transaction

Plans for Marathon Petroleum to spin off its Speedway division (see our November 12, 2019 blog post) have been realized. Company officials announced the sale of the division “to the parent company of 7-Eleven in a transaction worth $21 billion,” whio.com reports. In a media release, Michael J. Hennigan, president and chief executive officer, said, "[o]ur announcement crystalizes the significant value of the Speedway business, creates certainty around value realization and delivers on our commitment to unlock the value of our assets.” The transaction “was approved unanimously by the boards of directors of both companies,” according to the article. For more, read the full article and full release


DOE releases report on economic progress in Appalachia

On June 30, 2020, the U.S. Department of Energy released its report, The Appalachian Energy and Petrochemical Renaissance: An Examination of Economic Progress and Opportunities. The report discusses the energy, petrochemical and manufacturing sectors of the economy and the impact of low-cost energy from local natural resources, such as natural gas, plays a role in reviving the regional economy. It also highlights the need for the public sector to create a good business environment, develop a wide variety of public infrastructure from roads to broadband, support workforce development in the region and invest in innovation to facilitate economic growth in Appalachia. To read the full report, click here.


Pandemic hits oil and gas industry

Oil and gas has been greatly affected by the coronavirus, according to WTOV9. The industry was saved hardships when Governor DeWine considered it “essential” for the lockdown period. However, a drop in demand led to crude oil to trade at a negative price. Workers remained positive and compliant as new safety precautions were implemented for their well-being. However, oil and gas production is expected to rise steadily as the country reopens. For more, read the full article.


FERC commissioners dispute natural gas project approvals

On May 21, 2020, the Federal Energy Regulatory Commission (FERC) denied requests to reconsider the approval of two natural gas projects despite a commissioner’s concerns about the COVID-19 pandemic and decreasing demand for natural gas. For more, read the full article

National, Oil & Gas Litigation

Opinion: Ohio’s natural gas and oil energy production “essential to modern life”

The oil and natural gas produced in Ohio does more than fill our vehicle fuel tanks and heat our homes, “as nearly every consumer product we touch is manufactured using these raw materials,” interim executive director of Ohio Oil and Gas Energy Education Program Greg Mason writes in an opinion piece for insidesources.com. Some of those products include hand sanitizer, advanced medical equipment, medicine and bandages, Mason says. Additionally, he says, “America’s surge in energy production has created generational benefits for Ohioans.” A ban on hydraulic fracking would eliminate 700,000 Ohio jobs over five years and shrink our economy by $245 billion, according to analysis from the U.S. Chamber of Commerce. Rising energy costs could increase cost-of-living expenses by $6,000 annually. For more, read the full article.


One-two punch of warm weather, COVID-19 may lead to shale bankruptcies

Natural gas prices “bobbing not far from 25-year lows hit on March 23” as warmer spring weather and COVID-19 pandemic lockdown measures “have slashed commercial demand for heating” has led to major budget changes for exploration and production companies — and bankruptcies may be next, investing.com reports. Gas production in the lower 48 U.S. states averaged 92.92. billion cubic feet per day for the week ending March 27, slightly lower than the previous week. Bankruptcies “are expected to gain momentum in the second quarter, accelerating as some drillers are forced to shut in production amid reduced oil demand and low available storage capacity.” For more, read the full article.

National, Oil & Gas Litigation

Force majeure provisions: Dusting off a law school exam topic for the COVID-19 pandemic

As the COVID-19 pandemic increasingly causes business disruption across the United States and the world, the issue of force majeure will become increasingly relevant. On a near daily basis, national, state and local governments are implementing stringent containment policies. States of emergency have been declared, schools and institutions of higher education closed, travel restrictions imposed, businesses shuttered, sporting events cancelled, large gatherings banned and worship services cancelled. While the long term effects of the pandemic are yet unknown, it is certain that these containment strategies will present unique challenges as businesses struggle to adapt to the new realities presented by COVID-19, including the ability to comply with various contractual obligations. In evaluating the range of options available to deal with performance under a contract amidst the uncertainty, parties should consider how the concept of force majeure will impact their rights, obligations and remedies. For more, read the full story.

National, Ohio
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