A Mess for Hess: Why the Oil and Gas Giant may lose more than 300 gas leases in the Utica Shale Region

Author: Bradley Dunkle, Associate Member, University of Cincinnati Law Review

Oil and gas giant Hess Corporation may have a sticky situation on its hands following a federal court decision from September 24, 2013.  The Southern District of Ohio ruled that two gas leases held by the energy giant lapsed after Hess failed to drill on the property.[1]   Now as many as 300 similar leases held by Hess could be affected in the same manner.[2] Although multiple issues were presented for summary judgment in the case, the main dispute involved the “delay rental” provisions of the leases. Because the court correctly construed the “delay rental” provisions in a way that did not needlessly restrict the alienability of these leases and others like them, landowners in western Ohio will be able to take advantage of the area’s burgeoning natural gas industry.

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