spied on a pooled unit that was different than the smith a unit day in which some of mrs fully keys least acreage had been included pursuant to the declared pooled unit or d p you recorded on february day prior to the primary term of mrs fully keith lease oil and gas lease ending the district court's opinion to the contrary should be reversed in the case should be remanded for proceedings consistent with that the facts are undisputed and relatively straightforward the original phillippi lease was entered into on september twenty sixth of two thousand and six the lease provided for annual delay rental payments if there was no drilling so for several years annual delay rental payments were made by the lessee to mrs flaky may twenty first of tw ten there was an amendment to the lease the primary term with extended it now granted september twenty sixth to twenty fourteen in the pulling provision with changed in its entirety february i have a couple questions that i would like you to expand on if you would please the first relates to the effect of ohio law in this case you know while law seems to say that the pool unit disclosed as a part of the permit application is the relevant pooled unit and as i understand it here while the permit for the first well the smith well seems to be consistent with what you're claiming exact acres and boundaries are different in the in the smith well permits are they not that's correct your honor but what the so what do we make of that i want you to ignore for just a second if you would please you're close enough argument it seems to me that if ohio law says the unit that we're addressing is the unit in connection of the drilling permit then then the eureka permit doesn't save you or your honor i could find nowhere in ohio law that that lease which of course is the controlling contract here that requires a unit to be precise described with specificity at the lease itself talks about the women the whole the whole point of a unit is to decide whose properties and whose properties out and the point of that of course is to determine whether you get a share the proceeds how much it is whether you can drill your own well on the property so the boundaries here are important right yes so what when you say there's nothing that says they have to be what was your word precise to sipek or precise why would you file one if it wasn't if it didn't include precise boundaries whether somebody is right is right on the edge in or right on the edge out is critically important and puling correct correct but that's not the case here the case here anything we're going back to the  description of least acreage that is when her lease requires in terms of the d p you that must be recorded to put her on notice of then her land part of her land was included in the unit and i would propose that i could not find in law in ohio nor anywhere else a definition of description of least a grange i would propose a gather under ohio law your argument is the same as it is under the pooling clause and that is close enough is good enough and it doesn't make any difference because this property is inside no matter how you no matter which of these drilling units you look at right generally your argument be the same if one person was inside in one and outside the other it would depend on the on the that person's lease and what it required in terms of how you had to comply with the pulling provision with me i can part of my question maybe the more important one is i don't see any any temporal limit on when somebody that could file a new permit with a new pooling unit after the extended primary term had expired you could carve somebody's property right here you can put them in this unit this unit this unit this unit you're always in a unit but it's a it's a vastly different unit and you could keep doing that forever how would somebody after at the end of if i'm right about that how would somebody at the end of in this case the extended primary term ever know what they could do with their property well i'm not sure i've if i followed follow that exactly i'll do my best to answer your honor in this particular case well was permitted in spied on that unit again which included some of her acreage ultimately when the lease went into production she would receive her program to share as to her acreage and how it fit with the whole unit so it's to mrs flicky the lease was extended into its primary term the d p u itself as well as her lease permits reformations reduction in size increase in size unit for what period for ever in this you don't declare you don't file your unit for six more months what if you decided to do this two years later would would it still bind her if she if her lease is being held yes it's long as her lease is being held by production within the unit and that and it was held it was held over to the proper secondary term then as long as she says her lease is being held by production then there is no time limit in her lease or in the d p you as to how or how often reformations or amendments can be made as long as it's being held by production if the key had a question well i mean you've said that the d you can reform this i mean the lease says to effect in a roof reform you need to file in the recorder's office a declaration that describes the pooled acreage correct correct you need a declaration in order to reform and the fact that your declaration the d p you guess that you filed here purports to reserve to you the right to change that instrument i mean surely that cannot change the party's rights under the contract that you've you know unilaterally filed this thing doesn't mean they the units may be may be reduced enlarged from time to time within the primary term or or such term is the only let me read it let's see correct and and you do right i mean it's just i mean you know of the pooled acreage you just don't have the right pooled acreage here actually it's i mean for talking acreage it's a different amount of acres what you're parties contemplated it by not requiring a specific precise description of the poor unit in the lease it simply description of the least acreage that that's present in feb twenty you file stuff with the recorder's office it's usually the you know inland interests usually quite precise but i understand your argument  going to say this case comes down to one issue what is the exact language of this lease and it's a dead end of pertaining to the pooling declaration i gather in this case that the well was completed and is producing i don't know that to be true i don't think it is but i don't i can't say if it's false either i know that they spot it i don't know that it was actually frakt i don't know that it is you know what i take that back you don't know whether your own clients getting money i think c s there were several wells mentioned your honor if we go to this whole utica issue that they drill a number of wells the six h it out to somebody else is that that's why i don't think we should have to pay it back but she would be free to lease it out there in my estimation literally wrongfully taking gas from her property i don't think there were twelve and a half percent of that gas now they a one hundred percent of the gas they have no lease on her property it's lease list right now her property and we've met filed an objection in the ohio department of natural resource let's talk about that for just a second and i could be way off base here but you're familiar with the rule of capture right yes the fact that somebody drills a well next to your property and takes all of your gas absent some sort of either forced pooling or voluntary pooling you just lose i've studied the law of capture and we may be addressing it in this case in different proceedings it is not entirely settled law particularly within ohio if you are lease less that's just that's just silly if you look at oil and gas if you don't have a you don't have a straw in the tank you lose so that's why you fight over pooling and forced pooling because that's precluding you from having your straw in the tank so you want to be at least in the same situation you would be if you  so i'm trying to figure out is what how do we on ravel less well there are that back that if i may turn the question what you're really saying is if we if the court were to reverse here  miss flicky you're going to be stuck with a lease whether you wanted it or not even though your lease ended too bad that's just how oil and gas works you're going to be stuck in a pool for which you have a lease that is now expired you thought it going to end it did end and now you're stuck in something that's not your doing and how did you possibly derive that from my question my question was if you're right how do we honorableness the i didn't say what was going to happen i'm asking you to tell me what you want to happen here on arrival all we're asking this court to do is affirm the district court's granting of summary judgment the district court has already held that this lease is cancelled it's already cancellations already been filed in the recorder office in belmont county the land is currently without lease on it and the ohio department of natural resources has exclusive jurisdiction over pooling issues so whether this pool is still valid that will be up to the how department of natural resources and if they have to do a forced pooling proceeding involving ms phillips then that would be something separate but that is not to be taken care of in either the state courts or the federal courts that's where the ohio department natural resources to take care of would be there is a made those judgment cakes question about a temporal limit and that was something i was going to bring up if if the way that american energy wants to do this is allowed to happen then there would never be a time limit on how often they could file or dist declare a pool making leases go on forever and ms carroll said was long as it's held by production well that's a key fact in this case this lease was never held by production during the primary term there was never a well drilled before the end of her lease that started producing oil or gas now if that if that had happened if the smith a well had been drilled fractured and produced and she started receiving royalties on that nine acres her lease would have been held by production it would have moved into the secondary term and then if the lessee wanted to take another portion of her property included into a different unit well that's a whole different ballgame because the secondary term was in effect that is not what we have here we have a lease that never had a secondary term start because there was never a well that went into production during the primary term in two back to the first question of the day i'm not even sure that i that i follow you there i would have read the pool in clause to say that spotting the well satisfies that requirement the problem here was the smith was dry or they discontinued it that's right what you're talking about is a separate savings clause called that you just told me it did go into production earlier and that she'd been receiving royalties and that she was entitled to keep up the eureka well which is a completely separate when it went into production after her after her lease was over it was commenced before the and of the extended primary term now whether that then serves to extend it is a different question you said a minute ago there was no well that was producing before the expiration of the term and on pointing out to you is unless i'm miss understanding the pooling clause you just have to you have to  spud that well it doesn't have to actually be producing to extend the well yes or to extend the lease and i read about that no your honor in the circles is back to the exact issue of why the district court canceled this lease is because she he was words any well which is commenced or is drilled or is producing what does that mean well your honor we have to look at three different clauses of the lease they have been  not asking you about i can't answer the question without talking about all three clauses together your honor because if a well had been drilled on ms flicky hundred sixty eight acres clearly the act of spot so long as it's done in good faith and continuously to a point of a producing well that would hold the lease under the drilling operations clause but if ms flicky had to been properly included  drilled production unit a d p u a declaration of unit properly filed before the end of her term and a well was drilled somewhere in that unit and spied then yes her lease would be held but the issue of our case is that the eureka unit was never recorded before the end of her lease this well was drilled on someone else's property that's why her lease ended i hope that answers your question it answers what you thought my question was but let's go on to whatever else you want to talk about you're on our own i'm here to help the courts and if you want to ask the question again i'd like to well again your this comes down to the precise language of the lease and it's a dent i'm involving reformations and the lease in amendment is absolutely clear that not only does the declaration of pooled unit have to be recorded any reformations also must be recorded before the end of the primary term not only does it say that in the lease and its  amendment but when we took the deposition of the american energy utica representative they said yes that's that's what it says and that's what we understand it to mean it must take place before the end of the the argument at the trial court made by american energy utica was that the lease and its amendment were in big us which the court rejected they did not argue substantial compliance i looked carefully at the briefs substantial compliance wasn't their argument at the trial court was ambiguity only on appeal have they argued substantial compliance so that that's a new argument and so we would contend it's a wave darg of course even if it's not a waved argument the law particularly in ohio but nationwide is that substantial compliance is simply incompatible with oil and gas leasing particularly as it pertains to the critical factors of when leases end and you know and i would point out the very recent case out of ohio simms versus andersen where they made the same argument that  the lease shouldn't end because we were only eight dollars short they it was a very unusual lease that they had to pay four hundred dollars per year in order to keep it going the lessee they got three hundred ninety two dollars only eight dollars and some change short and the trial court held in favor of the lessee and said well that's that's close enough and the court of appeals said no it's that's we don't use the close enough standard substantial compliance whenever it's a political can only go to absolute trifling matters and they said eight dollars wasn't trifling it had to do with the exact terms of that lease we don't think we're in anywhere close to a trivial or a trifling issue here your honor having a lease end is an important matter to a a a less or they need to know when a lease ends and that's how they negotiate even if they don't know exactly how they're negotiating many of these landowners don't it's still important to the last or and that's why they're written the way they are all right you maybe you could respond to the substantial performance question right right at the very beginning because it we couldn't find that you would raise that below either that is true it was not raised below and on furthe reflection it's probably not applicable here again i think that kind of thing weighs me too so when you say it's not a pluggable here i mean if if you're conceding that that you can't prevail on that argument because you didn't raise a below them what are we left with we're left with your honor i'm a description i would propose a definition for discussion of least acreage as  follows the declared pool unit provides mrs fully key with notice it some of her least acreage is included in the pooled drilling in it in this case the smith a unit a rather then some requirement which is not in the either then it would just for i mean it's implied right description of the acreage i mean isn't it implied that it's an accurate description description of the acreage is actually the group we're talking about it was accurate a at the time it was firewood if you go forward fast forward to march which of course was march of two thousand and fifteen which of course was after drilling began and one of the laterals went outside the boundary and there were some parcels that were not initially included so there was a reformation and a modification an amendment of that argument about how the lateral what outside the boundaries of the original pooled unit really seems to when you look at the drill appliqu the permit application for the second well would show to different bombers so at the time you spotted the second well you already knew it was it was intended to relate to different acreage about similar but different correct correct your honor it's so when you say a description of the pool unit i mean you're not simply saying you could say well it's forty acres to the east of the apple tree smith road manure so you have to define it by meets and bounds right correct me that's what we do in real estate descriptions so i don't see how how a description of the pooled acreage can be anything other than whatever the pool  it is well again we're talking about mrs fully keys lease and the requirements under her pulling provision in her lease she was put on notice that a portion of her acreage was included in a unit pulling  figure out are you saying a description of the pooled acreage relates to the pool to the to the description of the pooling unit or her acres that are within a pooled unit which are your game your honor i believe it relates to the int not her acres but it is in a way your honor because in interpreting whether or not the less the lessee has complied with her lease that's an issue we have to look at and that's what we're looking been raised here you need to then look at the language and and her and her what was included from her standpoint let me ask if you could look at this a slightly other way as well there are literally hundreds of different pooling clauses in the form books that relate to oil and gasoline and some of them as yours does requires filing and some don't so seems to me the problem here was in terms of your argument is that you used a clause in the extension of the lease that requires this filing of the declaration if you if you hadn't used that if you had used a more favorable to the lessee clause he we wouldn't be having this argument i understand that it certainly would make matters a lot easier sort of bond by the language you picked we are your honor but again i believe that the language we picked compliance with what occurred that the smithy in a day adequately described