Guide for mineral owners

What it means to be unleased in Ohio

What an owner with no lease is paid when the state puts the minerals into a drilling unit, in the words of the state's own orders.

The short answer

If the state puts your minerals into a drilling unit and no lease covers them, you are an unleased mineral owner. You are still paid. Under the state orders we have read, you are paid one eighth of the gross proceeds from the first month of production. Later, if the wells pay back their costs twice over, you are also paid seven eighths of the net proceeds.

This is general information about Ohio. It is not legal advice, and it is not about your property. Your unit's own order decides what you are paid.

How minerals end up in a unit without a lease

Ohio law lets an operator ask the state to join many tracts into one unit. The operator needs the consent of the owners of at least 65 percent of the land over the pool. The rule is section 1509.28 of the Ohio Revised Code.

The Chief of the Division of Oil and Gas Resources Management holds a hearing on the application. If the chief approves it, the chief issues an order for unit operations. The order covers every tract in the unit, including tracts whose owners never signed a lease.

The operator's application lists every owner in the unit and marks each one as leased or unleased. That list is where the "unleased" flag on this site comes from. The list can be out of date or wrong. If you have signed a lease since it was filed, you are no longer unleased.

What the state's orders pay an unleased owner

We read every order for unit operations the chief issued in 2026 that we hold, 65 of them as of November 13, 2026. All 65 use the same terms. Older orders can differ, and any order can be amended or revoked.

One eighth of the gross proceeds, from the start. The orders say: "Each unleased mineral owner shall receive a monthly cash payment equal to a one-eighth share of the gross proceeds from production."

Your part of that one eighth follows your tract's share of the unit. The orders call it unit participation: the surface acres of your tract in the unit, divided by the surface acres of the whole unit.
It is paid monthly, at the same time the operator pays its royalty owners.
The words are "gross proceeds". The orders name no cost that comes out of this payment.

Seven eighths of the net proceeds, later. The orders add a second payment: a seven-eighths share of the net proceeds from production. It starts only after the operator has recovered its well costs with a premium.

For the first well in the unit, the operator first recovers 200 percent of the cost of drilling, testing and completing that well.
For each additional well, the operator first recovers 150 percent of that well's cost.
Until a well reaches that point, you receive the one-eighth payment for it and nothing more. A well that never earns back that much never pays the second share.

No bills. Apart from that recovery out of production, the orders say an unleased owner pays no expense of drilling, testing, completing, producing or operating a well. The orders also say an unleased owner is not responsible for plugging or restoration costs, and bears no liability for damage from the operations.

Your surface. The orders say no drilling or operating activity may take place on the surface of unleased property without the written consent of the surface owner.

If production stops. If every well in the unit stops producing for more than 90 days, the orders require monthly "delay in production" payments to unleased owners while the unit is kept. The payment is 15 percent of the average of your last three one-eighth payments, for each 30 days from day 91 to day 180. It is 20 percent from day 181 to day 360.

You can ask for the numbers. On your written request, the operator must give you within 30 days a monthly statement of costs, of the oil and gas produced and of the proceeds from their sale. You can also ask for its authorization for expenditure and for a statement of the costs it is recovering.

You can still sign a lease. The orders say nothing in them stops an unleased owner from leasing to the operator or to anyone else. From the day a lease takes effect, you are no longer treated as unleased under the order.

How this changes what you are paid

A leased owner is paid the royalty rate in the lease. The lease also decides whether the operator may take costs out of the royalty. A lease is usually signed for a bonus paid at signing.

An unleased owner is paid by the order. There is no signing bonus. The first payment is one eighth of gross proceeds, which is a 12.5 percent royalty with no costs taken out. The second payment can be much larger than any royalty, but it comes only if and when the wells recover their costs with the premium. Whether and when that happens depends on what the wells cost, what they produce and what oil and gas sell for.

An example of the arithmetic, with made-up numbers. Say your tract is 1 percent of the unit, and in one month the unit's gross proceeds are $1,000,000.

Before the recovery: one eighth of $1,000,000 is $125,000. Your 1 percent of that is $1,250.
After the recovery: you still receive the $1,250. If net proceeds that month are $700,000, seven eighths is $612,500, and your 1 percent of that is $6,125 more.

These numbers only show how the two payments are worked out. They say nothing about any real unit.

What this site shows for an unleased interest

Your cash flow page counts the one-eighth payment only, with no deductions. It does not work out the seven-eighths share, because that depends on the operator's costs and accounts, which are not public. So for an unleased interest the page can understate what a paid-off well would pay you.

If you have signed a lease since the filing, say so on your cash flow page and set the royalty rate from your lease.

What to check

Read your unit's order. It is listed with the unit's documents on your unit page. Look for the paragraphs about unleased mineral owners.
Ask the operator in writing for the monthly statement the order allows you.
Before you sign a lease, or decide to stay unleased, talk with an Ohio oil and gas lawyer. This page cannot tell you which is better for you.

Where this comes from

General information about Ohio, checked on November 13, 2026. It is not legal advice and it is not about your property. Orders differ and change. Your unit's own order governs.