The Ohio Supreme Court’s recent Opinion in West v. Bode, 2020-Ohio-5473, definitively determined whether the Dormant Mineral Act (the “DMA”) supersedes the Marketable Title Act (the “MTA”) with respect to severed mineral interests in Ohio.

The case dealt with an ownership dispute for a previously severed royalty interest and whether the MTA or the DMA should dictate the procedure of reuniting such severed mineral interest with the surface estate.  Specifically, the surface owners claimed that it was extinguished by virtue of the MTA, and the heirs of the royalty interest holders, argued that the more specific provisions of the DMA, supersede the MTA and should exclusively govern the surface owners’ claim.

The Court began its analysis by applying statutory construction rule, R.C. 1.51, which provides that only where statutes irreconcilably conflict will effect be given to specific provisions over the general provisions, and that courts should endeavor to construe conflicting statutes so as to give effect to both.  Accordingly, the Court resolved to determine whether the terms of the MTA and the DMA are in irreconcilable conflict, leaving only the use of the DMA provisions (the more specific provisions) available to terminate a mineral interest.

The Court acknowledged the fact that there are many differences between the MTA and DMA, i.e. types of savings events and extinguished/abandoned time periods; however, the Court held that these differences do not make the statutes irreconcilable.  Rather, the Court stated, these differences allow for alternative methods for surface owners to become vested with the severed mineral interests, ultimately holding that there is no irreconcilable conflict between the general provisions of the MTA as applied to severed mineral interests and the more specific DMA provisions, both remain in effect.

Therefore, either the DMA or the MTA may be utilized by Ohio surface owners to claim title to severed, “extinguished”/“abandoned” mineral interests.

What does this mean for oil and gas operators and mineral owners?

Based on West v. Bode, Ohio surface owners can conclusively utilize the MTA to extinguish severed mineral interests.  This means that,  after 40 years from the effective date of the surface owner’s root of title (where title is derived/established), the severed mineral interest is extinguished and the surface owner is then vested with ownership to the same by operation of law, unless a savings event described in the MTA has occurred.  Once an interest is extinguished under the MTA, the interest cannot be revived.

The consequences of this holding will have a significant impact on the relationship and/or claims between the surface and mineral owners of severed estates.  Additionally, this should also work as a wake-up call to operators and mineral interest owners alike to determine the status of their title under the MTA.