The new Ohio Revised Code section 5301.332 provides the process for forfeiture of an oil and gas lease. A lessor under an oil and gas lease, who has a right to pursue a forfeiture of that lease for expiration of the lease term, or, failure to abide by covenants in the lease, must serve notice of the lessor’s intent to declare the lease forfeited, and then file for record an affidavit of forfeiture. If the lessee, or the lessee’s successors or assigns, fail to provide notice to the lessor that the lease is still effective within 60 days of the lessor’s notice, then the prior version of the statute permitted the lessor to cause the county recorder to note upon the margin of the lease that “this lease cancelled pursuant to affidavit of forfeiture recorded in Lease Vol. …, Page …”
Under prior law, the forfeiture was complete upon such notation.
Starting on January 30, 2014, the lessor must also record a “notice of failure to file” and the recorder no longer makes the notation. The notice shall contain the following:
- A statement that the person filing the notice is the lessor or the lessor’s successors or assigns;
- The document number or volume and page of the lease record where the oil or gas lease is recorded;
- A general description of the land; and
- The statement: “This lease cancelled pursuant to affidavit of forfeiture recorded as Document Number …, or Official Record/Lease Vol. …, Page …”
Thereafter, the record of the lease shall not be notice to the public of the existence of the lease or of any interest therein or rights thereunder and the record shall not be received in evidence in any court of Ohio on behalf of the lessee, or the lessee’s successors or assigns, or against the lessor, or the lessor’s successors or assigns.