In Dennison Bridge, Inc. v. Resource Energy, L.L.C., the Ohio Court of Appeals for the Seventh District found that the reasonableness of a delay in repairing a well created a question of fact in the termination of an oil and gas lease for non-production. The court reversed a grant of summary judgment to the oil and gas company for an 18-month delay. The court discussed, but did not adopt, a bright line time for when a delay is reasonable or not, preferring to examine the facts of the case. The court further affirmed its prior decision rejecting the argument that the lease was void for being a perpetual lease.
The case will be used by both producers and landowners in future cases involving non-production and lease terminations. The decision comes from the pivotal Seventh Appellate District which is the intermediate appellate court for the counties in Ohio that are heavily involved in the oil and gas industry including Belmont, Carroll, Columbiana, Harrison, Jefferson, Mahoning, Monroe, and Noble counties.