Ohio’s ‘Bad Faith’ Bar for Mineral Trespass Is an Industry Win

Ohio just rewrote the playbook for mineral trespass litigation, and the new rules make it much tougher for landowners to hit oil and gas companies with big-ticket damages.

Tucked into House Bill 96 and now codified as Section 5303.34 of the Ohio Revised Code, the measure replaces more than a century of common-law precedent with a statutory scheme that is friendlier—some might say protective—toward operators.

At first glance, the law looks straightforward: If a producer crosses a property line without permission and extracts hydrocarbons, the default damages equal the revenue realized at the wellhead minus the cost of getting the product out of the ground and whatever the producer has already paid.

That alone is a win for industry, because it locks in a cost-of-production credit that was never guaranteed under the previous common law standard.

The real action, however, is in the statute’s definition of “bad faith.” The legislature didn’t merely tweak the existing test; it built a moat around it. Bad faith no longer is presumed, period. A plaintiff now has to show either actual knowledge that the entry was illegal, or a willful, wanton disregard of mineral rights coupled with an intention to deprive the owner of those specific minerals.

Intent language like that is catnip for defendants—it imports a state-of-mind requirement that is slippery for plaintiffs to prove.

Consider what doesn’t count as bad faith. If an operator had a “reasonable belief” that its lease, unit agreement, or drilling permit authorized the activity, bad faith is off the table. Even over-promised acreage or an unsophisticated title review may not move the needle if there is any colorable basis for the operator’s belief.

And once bad faith falls away, so does the landowner’s claim to full wellhead revenue unburdened by costs.

The US District Court for the Southern District of Ohio’s decision in Golden Eagle Res. II v. Rice Drilling D, was decided before the statute but now perfectly aligns with it. The ruling illustrates how hard it is to show intent to snatch a particular neighbor’s molecules. Unitization on its own—the act of pooling a tract into a multi-acre drilling block—doesn’t establish that the operator aimed to drain that tract.

As the court put it, pooling works on a legal fiction that production comes from every acre in the unit, even though geology and fracture propagation rarely honor parcel lines. For plaintiffs, that fiction makes proving specific intent a herculean lift.

The statute also muffles an emerging plaintiff strategy—accusing operators of intentionally designing hydraulic-fracture stages that “steal” oil or gas from non-wellbore tracts.

Proving that allegation now requires granular evidence. This includes downhole mapping, fracture-trace modeling, and production allocation studies showing that the fracs were engineered to cross the boundary and seize a landowner’s reserves. Absent that smoking-gun data, a jury is unlikely to find the requisite intent element under Section 5303.34.

Meanwhile, the industry gains predictability. Operators can model worst-case exposure with more confidence, knowing that the cost-of-production offset is locked in statutorily for good-faith trespass. Insurers can price coverage, lenders can underwrite reserves, and mergers-and-acquisitions lawyers can diligence acreage without obsessing over open-ended common law damages.

Landowners do retain a path to full revenue recovery, but it’s narrow. They need documents evidencing an operator’s conscious decision to disregard property lines paired with a desire to capture their specific minerals. Without that proof, damages shrink to a net-profits calculation that often generates far smaller numbers.

The bottom line is that Ohio has recalibrated the risk-reward calculus. The statute discourages speculative bad faith claims while rewarding operators who can demonstrate any reasonableness. Expect fewer nine-figure trespass verdicts and more pre-suit negotiations focused on lease interpretation and cost deductions.

For landowners hoping to strike it rich through litigation, the new statute sends a clear message: Bring evidence of actual intent or brace for a steep discount.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Dustin Lyle Womack and Kenneth A. Young are litigation partners, and Cassidy Viser is a litigation associate, in the Houston office of Kirkland & Ellis.

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