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Client Alert from the Municipal Law Group - November 2011

Recent Law Places Notice Requirements On

Oil And Gas Leases On Public Lands

By Heather R. Baldwin Vlasuk

In these tough economic times, municipalities, townships, and other governmental entities are considering all options for increasing revenue. Many have turned to leasing government-owned land for oil and gas production. However, in these instances, it is important to remember that Ohio law places specific requirements on the legislative authority of a political subdivision entering into an oil and gas lease.

Ohio Revised Code Section 1509.61, effective June 30, 2010, specifically applies to oil and gas leases which would allow wells to be located in an "urbanized area," defined as being within a municipal corporation or within a township that has an unincorporated population of more than 5,000 in the most recent federal decennial census. The law requires that the legislative authority of the political subdivision which is considering entering into such a lease hold a public meeting on the issue at a separate meeting from that at which a vote on the lease will occur. In addition to general public notice of the meeting, the legislative authority must also send specific written notice of the public meeting, ten days in advance, to the owner of each parcel of land located within 500 feet of the property that will be subject to the proposed lease. The notice must inform the property owners of the public meeting and must contain a specific statement that the property owner is required, within five days of receiving the notice, to provide a copy of the notice to each residence in an occupied dwelling on the owner's property.

Currently, statutory law does not carry an express penalty for non-compliance. However, non-compliance may provide the basis for a nearby property owner to seek an injunction against the commencement of a well or to have the lease voided by the courts.

This Client Alert is provided by for educational and information purposes only and should not be construed as a solicitation of services. Further, this Client Alert is not intended to provide legal advice on specific subjects. The resolution of legal issues depends upon the specific facts and circumstances of a particular situation and the laws and/or regulations involved. The lawyers in Walter & Haverfield’s Municipal Law Group would be pleased to assist with any questions regarding the various compliance issues discussed in this Client Alert.