On March 6, 2018, the Wage and Hour Division of the U.S. Department of Labor (WHD) announced a new pilot program, the Payroll Audit Independent Determination (PAID) program, which is intended to encourage employers to identify and correct potentially non-compliant practices.
According to DOL’s Q&A page on the PAID program (https://www.dol.gov/whd/PAID/#4) “The PAID program provides a framework for proactive resolution of potential overtime and minimum wage violations under the FLSA. The program’s primary objectives are to resolve such claims expeditiously and without litigation, to improve employers’ compliance with overtime and minimum wage obligations, and to ensure that more employees receive the back wages they are owed—faster.” To read more: click here.
The Ohio Supreme Court recently rejected a constitutional challenge to Ohio’s forced pooling statute in State ex rel. Kerns v. Simmers, Slip Opinion No. 2018-Ohio-256. A group of landowners (the “Landowners”) sought a writ of mandamus compelling the Chief of the Ohio Department of Natural Resources (ODNR) to commence appropriation proceedings to compensate landowners with interests included in an oil and gas drilling unit through a unitization order. The Landowners alleged that the Chief’s order issued pursuant to R.C. 1509.28 was “unlawful or unreasonable” and constituted an unconstitutional taking of their property without compensation. Under R.C. 1509.36, the Landowners appealed the Chief’s order to the Ohio Oil and Gas Commission (the “Commission”). The Commission, concluding that it lacked jurisdiction to determine the constitutionality of the order, dismissed the appeal. Instead of appealing the Commission’s decision to the Franklin County Court of Common Pleas within 30 days as permitted by R.C. 1509.37, the Landowners filed a petition for a writ of mandamus to the Ohio Supreme Court.
The Ohio Supreme Court denied the writ and dismissed the Landowners’ case, reasoning that the Landowners failed to utilize the adequate legal remedy available. To be entitled to a writ of mandamus, the Landowners needed to show (1) that they had a clear legal right to appropriation proceedings, (2) that the ODNR had a clear legal duty to commence the proceedings, and (3) that the Landowners had no plain and adequate legal remedy. Under R.C. 1509.37, the Landowners could have appealed the Commission’s decision to the Franklin County Court of Common Pleas to determine the constitutionality of the unitization statute. In denying the writ, the court determined that the Landowners had a complete, beneficial and speedy remedy at law by way of an appeal to the Franklin County Court of Common Pleas as provided in R.C. Chapter 1509 and should have pursued their appeal there. While dismissing this challenge on procedural grounds, it appears inevitable that the Ohio Supreme Court will ultimately have to determine the constitutionality of Ohio’s forced pooling statute.
The Supreme Court of Ohio recently ruled in Alford v. Collins-McGregor Operating Company, Slip Opinion No. 2018-Ohio-8, that Ohio does not recognize an implied covenant to further explore, separate and apart from the implied covenant of reasonable development. Under Ohio law, the implied covenant of reasonable development requires a lessee to drill and operate such number of wells as would be reasonably necessary to develop the leasehold premises in a proven formation. While other jurisdictions recognize a separate implied covenant of further exploration, which requires a lessee to additionally explore potentially productive formations that are yet to be proven, the Supreme Court of Ohio refused to impose such requirement on lessees.
The Alford oil and gas lease was held by production and did not disclaim the application of any implied covenants. The lessee drilled one shallow well pursuant to the lease, which had produced in paying quantities ever since. The lessee never drilled any additional wells or sought production from any additional depths. Because the lessee declined to explore deeper depths, the Plaintiff landowners alleged that the lessee breached the implied covenant of reasonable development and the implied covenant to explore further, and sought a partial forfeiture of the lease as to deeper formations.
Affirming the Fourth Appellate District’s decision, the Ohio Supreme Court held that the implied covenant of reasonable development sufficiently protects the landowner’s interest in the exploration of deep formations. The court discussed that the implied covenant of reasonable development requires the lessee to act as a reasonably prudent operator would in developing an oil and gas lease. It requires the lessee to take into account the interests of both the lessor and lessee and to consider all of the circumstances relevant to the exploration and development of the land, including the associated risks, costs and profit. Conversely, the court observed that the implied covenant of further exploration only focuses on a small subset of factors relevant to the overall development of a lease, namely the lessor’s interest in obtaining additional compensation, and ignores the profit motive of a reasonably prudent operator.
The court held that the comprehensive scope of the implied covenant of reasonable development subsumes the implied covenant to further explore. The implied covenant of reasonable development is well suited to address the landowner’s interests in the further exploration of deeper formations because it takes into consideration all of the factors relevant to the exploration and development of a leased property. The court noted that it would be “unhelpful at best” to recognize a separate implied covenant to explore further, but expressed no opinion whether a prudent operator has a duty to develop deep rights under the implied covenant of reasonable development.
A federal court recently addressed two contentious issues affecting calculation of royalty payments from production of shale gas in Ohio: (1) whether operators may deduct post-production expenses (costs for gathering, compression, treatment, processing, transportation, and dehydration) when calculating royalty payments; and (2) whether operators are required to pay royalties on all gas extracted at the wellhead – including gas that is lost between the wellhead and the point of sale (i.e. “line loss” gas). Lutz v. Chesapeake Appalachia, L.L.C, No. 4:09-cv-2256, Dkt. 142 (N.D. Ohio, Oct. 25, 2017) (Judge Sara Lioi).
For more information, read our Legal Perspective.
On June 20, 2017, Babst Calland released its seventh annual energy industry report entitled The 2017 Babst Calland Report – Upstream, Midstream and Downstream: Resurgence of the Appalachian Shale Industry; Legal and Regulatory Perspective for Producers and Midstream Operators. This annual review of shale gas development activity acknowledges the continuing evolution of this industry in the face of economic, regulatory, legal and local government challenges. To request a copy of the Report, contact info@babstcalland.com.
In this Report, Babst Calland attorneys provide perspective on issues, challenges, opportunities and recent developments in the Appalachian Basin and beyond relevant to producers and operators.
In general, the oil and gas industry has rebounded during the past year through efficiency measures, consolidation and a resurgence of business opportunities related to shale gas development and its impact on upstream, midstream and downstream industries. As a result, many new opportunities and approaches to regulation, asset optimization and infrastructure are underway. Increased spending during the past year has led to a significantly higher rig count in the Appalachian Basin enabling growth in the domestic production of oil and gas as other shale plays across the country experience reductions.
The shale gas industry continues to provide the tri-state region with significant economic opportunities through employment and related revenue from the development of well sites, building of pipelines necessary to transport gas to market, and new downstream opportunities being created for manufacturing industries due to the volume of natural gas and natural gas liquids produced in the Appalachian Basin. Shell’s progress from a year ago to construct an ethane cracker plant in Beaver County, Pennsylvania represents just one example of the expanding downstream market for natural gas. Many other manufacturing firms are expected to enter the region and establish businesses drawn by the energy and raw materials associated with natural gas and natural gas liquids from the Marcellus and Utica shales.
The Report also highlights changes that have occurred during the past year in the political landscape that are expected to affect the energy industry. The Trump administration is signaling a fundamental shift in the energy policies established by the Obama administration. New executive orders and policies have been issued that promise to lead to more pipeline development, reduced federal oversight of the oil and gas industry and increased access to oil and natural gas reserves.
Joseph K. Reinhart, shareholder and co-chair of Babst Calland’s Energy and Natural Resources Group, said, “This Report provides perspective on the challenges and opportunities of a resurging shale gas industry in the Appalachian Basin, including: the divergence of federal and state policy that creates more uncertainty for industry; increased special interest opposition groups on new issues and forums despite their lack of success in the courts; and the expansion from drilling to midstream development and now to downstream manufacturing that demonstrates the emergence of a more diverse energy economy.”
The 74-page Report contains six sections, highlighted below, each addressing key challenges for oil and gas producers and midstream operators.
- Business Issues: Adapting to the New Price Environment as natural gas producers continue to focus on reducing costs and improving efficiencies. Recently, the number of natural gas producers in the Appalachian Basin has contracted through select merger and acquisition activity. With efficiency of operations in mind, natural gas producers continue to focus on consolidating their activities geographically. The oil and gas industry faced significant financial stress over the past year, and 2016 will go down as one of the more dramatic years in the United States’ oil and gas history. In the 2016 calendar year, primarily due to low commodity prices, 70 North American oil and gas exploration and production companies filed for bankruptcy protection.
- State and Federal Governments Remain Active in a Changing Regulatory Landscape as developments in the state environmental standards for enforcement, air, water and waste management in Pennsylvania, West Virginia and Ohio, as well as anticipated initiatives from non-governmental organizations (NGOs), will continue to have an effect on production and midstream operations. Separately, the impact of the Trump administration on various federal regulatory initiatives from the Obama era promises to be significant. President Donald Trump’s March 28, 2017 Executive Order was directed towards the development of the country’s natural resources. The order, among other things, requires agencies to review regulations that may burden the development or use of domestic energy resources.
- Pipeline Safety Legislative and Regulatory Developments Continue to Shape the Industry through the U.S. Department of Transportation’s Pipeline and Hazardous Materials Safety Administration’s (PHMSA) pipeline safety program. It is unlikely that there will be a dramatic shift in PHMSA’s enforcement policy in 2017. “Protecting our Infrastructure of Pipelines and Enhancing Safety Act of 2016” (PIPES Act) was signed into law last year with a provision allowing PHMSA to issue emergency orders if an unsafe condition or practice constitutes, or is causing, an imminent hazard. These emergency orders can impose industry-wide operational restrictions, prohibitions, or safety measures without a prior hearing.
- Litigation Trends including a number of alleged nuisance claims continue to travel through West Virginia, Ohio and Pennsylvania courts. Materials discussing alleged health effects from unconventional natural gas development continue to be disseminated at a record pace by industry opposition groups. A casual review of the material could lead to the erroneous conclusion that air emissions have not been tested; this is not, however, the case. The air quality data collected by a variety of objective parties using established monitoring and testing protocols around shale development in northeastern U.S. over the last six years demonstrate that shale operations are safe.
- Local Government Law and Regulations Continue to Spawn Debate and Legal Challenges which continue to increase throughout the Appalachian Basin. However, the industry has successfully challenged overly-restricted ordinances. In contrast to municipalities that have adopted ordinances that permit reasonable oil and gas development, some local governments continued in 2017 to test their regulatory authority by enacting strict regulations for uses ancillary to well site development. Operators impacted by these regulations likewise continued to push back on these local regulations that severely impede, if not entirely prohibit, development or operation.
- Downstream Opportunities include exciting developments for production and midstream companies with new emerging markets for consumption of natural gas and natural gas liquids, such as power generation, export, and the petrochemical and related manufacturing industries. The U.S. petrochemical industry is undergoing tremendous growth, including the Northeast which is a prime target for more niche markets, and an opportunity to repurpose industrial assets for this regionalized growth.
As market conditions evolve for the oil and gas industry in the Appalachia Basin and throughout the United States, Babst Calland’s multidisciplinary team of energy attorneys continues to stay abreast of the many legal and regulatory challenges currently facing producers and midstream operators.
On June 1, 2017, the Ohio Supreme Court ruled that a provision in an oil and gas lease requiring the lessee to pay a minimum rental/royalty does not automatically invoke a termination provision in an unrelated delay rental clause and is not void as against public policy.
In Bohlen v. Anadarko E&P Onshore, L.L.C., Slip Opinion No. 2017-Ohio-4025, the Ohio Supreme Court was asked to determine whether a lessor can terminate an oil and gas lease if the lessee fails to pay minimum rental/royalty payments. In Bohlen, the oil and gas lease contained a primary term of one year along with standard secondary term language. The lease allowed the lessee to pay a delay rental for the privilege of deferring the commencement of a well. If this delay rental was not paid, then the lease would terminate. The Addendum attached to the lease stipulated that if royalty payments due to the lessor under the lease were less than $5,500, then lessee would pay any shortfall between the royalty payments and the $5,500. This minimum rental/royalty clause did not contain a termination provision. Lessee drilled two wells during the primary term of the lease but ultimately failed to pay yearly royalty amounts equal to or greater than $5,500. Lessors argued that the failure to pay a minimum rental/royalty triggered the termination clause found within the delay rental provision.
In Bohlen, the Court reasoned that the delay rental clause and the minimum annual-rental/royalty clause were two distinct clauses. Therefore, since the minimum rental/royalty clause did not contain termination language, the failure to pay the minimum royalty would not trigger the termination of the lease. It was of no consequence that the lease contained termination language in the delay rental clause since the two clauses at issue were to be read separately. Whether the lessee needed to compensate the lessor for underpayment was not at issue in the case.
Additionally, since the lease at issue contained a primary term, it did not violate public policy for being an indefinite lease.
The Court of Appeals of Ohio, Seventh Appellate District, recently held that (i) heirs had standing to challenge a surface owners’ notice of abandonment under the Dormant Mineral Act (DMA), and (ii) an affidavit of preservation constitutes a valid claim to preserve mineral interests, regardless of whether the affidavit specifies a savings event. In M&H P’ship v. Hines, 2017-Ohio-923, the appellant surface owner asserted that the heirs were not holders of the mineral interest, and therefore, had no standing to challenge the notice of abandonment. The surface owner also asserted that the claim and affidavit filed by the heirs in response to the notice of abandonment did not identify any savings events that occurred in the 20-year period preceding the notice of abandonment, and therefore, the heirs did not properly preserve their interest. The Court found both assertions to be meritless.
With regard to the standing issue, the Court held that the broad definition of “Holder” under the DMA includes heirs of the original record owner of the mineral. Holder means the record holder of a mineral interest, and any person who derives the person’s rights from, or has a common source with, the record holder and whose claim does not indicate, expressly or by clear implication, that it is adverse to the interest of the record holder. In this case, the heirs derive their rights from or have a common source with grandparents, who were the original record owner of the mineral interest. Therefore, the court found that the definition of holder in the DMA is broad and includes the heirs.
As for the affidavit of preservation issue, the Court relied on the reasoning in Dodd v. Croskey, 2015-Ohio-2362, to hold that heirs’ affidavit of preservation constituted a valid claim to preserve their interest under the DMA. Nothing in the DMA states that a claim to preserve must refer to a saving event that occurred within the preceding 20 years. Additionally, the notice procedures do not require that the claim to preserve be itself filed in the 20 years preceding notice by the surface owner. Instead, the statute plainly states that such a claim can be filed within 60 days after notice from the surface owner. Accordingly, the plain language of the DMA allows the holder to file a claim to preserve the mineral interest or an affidavit that identifies a saving event that occurred within the 20 years preceding notice. In this case, the heirs filed a document titled Affidavit Preserving Minerals, which identified the heirs as the current owners of the mineral interest and stated that the heirs did not intend to abandon their rights in the mineral interest, but intend to preserve their rights. The Court held that this affidavit constituted a valid claim to preserve under the DMA and that no savings event needed to be specified therein.
On Tuesday, the Supreme Court of the United States denied certiorari in Walker v. Shondrick-Nau, Exr. (Slip Opinion No. 2016-Ohio-5793). As more fully explained in our Blog post discussing Walker, in September the Ohio Supreme Court held that, if a surface owner failed to quiet title under the 1989 version of the Ohio Dormant Mineral Act (the “ODMA”) prior to the enactment of the 2006 version of the ODMA, then the 1989 version is unavailable and the surface owner can only pursue a claim to abandon mineral interests under the 2006 version of the ODMA. Walker subsequently appealed this decision to the Supreme Court of the United States. In denying certiorari, the U. S. Supreme Court refused to hear the case meaning that the decision of the Ohio Supreme Court will stand as the law in Ohio.
In Lutz et al. v. Chesapeake Appalachia, L.L.C., Slip Opinion No. 2016-Ohio-7549, the Ohio Supreme Court declined to answer the certified question submitted by the U.S. District Court for the Northern District of Ohio as to whether Ohio follows the “at the well rule” or some version of the “marketable product” rule to calculate royalty payments made under an oil and gas lease. The “at the well rule” permits the lessee to deduct post-production costs from royalty payments made to the lessor. Conversely, the “marketable product” rule places limits on the lessee’s ability to deduct post-production costs under certain circumstances. Rather than adopting a blanket rule, the Court stated that the payment of royalties under a lease will be controlled by the specific language in the lease agreement. If an oil and gas lease is silent on the right to deduct post-production costs, it appears unlikely that Ohio courts will allow such deductions. The Court emphasized that leases should be viewed as contracts and the traditional rules for interpreting contractual terms should be used to determine the allocation of post-production costs under an oil and gas lease.
Today, the Ohio Supreme Court issued three written opinions interpreting the Ohio Dormant Mineral Act (O.R.C. §5301.56) (the “ODMA”) and decided 10 related cases based upon its decisions set forth in the written opinions. Notably, in Corban v. Chesapeake Exploration L.L.C., (Slip Opinion No. 2016-Ohio-5796), the Supreme Court held that the 1989 version of the ODMA (the “1989 Act”) did not automatically abandon oil, gas and mineral rights in favor of the surface owner. Instead, the Supreme Court interpreted the statute to require the surface owner to seek a judicial decree that the mineral rights were abandoned. The Court focused on the statutory phrase “shall be deemed abandoned and vested in the owner of the surface” in determining that the legislature intended the 1989 Act to serve as a method of terminating abandoned mineral rights through a quiet title action rather than automatically transferring the mineral interests to the surface owner by operation of law. Additionally, the Court held that payment of delay rentals under a lease does not constitute a “title transaction” under Ohio law since the payment of delay rentals are not filed or recorded in the country recorder’s office.
In Walker v. Shondrick-Nau, Exr., (Slip Opinion No 2016-Ohio-5793), the Ohio Supreme Court built upon its decision in Corban and held that, if a surface owner failed to quiet title under the 1989 Act prior to the enactment of the 2006 version of the ODMA (the “2006 Act”), then the 1989 Act is unavailable and the surface owner can only pursue a claim to abandon mineral interests under the 2006 Act.
Finally, in Albanese, Exr. v. Batman et al., (Slip Opinion No. 2016-Ohio-5814), the Ohio Supreme Court followed the rationale of Corban regarding the necessity of filing an action to quiet title under the 1989 Act prior to the enactment of the 2006 Act. The Court further held that under the 2006 Act mineral rights cannot be deemed abandoned if the owner of the minerals had not been served notice of the abandonment pursuant to the 2006 Act. The notice requirement is mandatory under the 2006 Act.
Citing to the above cases, the Supreme Court decided 10 additional cases consistent with the three written opinions. The 10 cases are listed below:
Carney et al. v. Shockley et al., (Slip Opinion No. 2016-Ohio-5824)
Dahlgren et al. v. Brown Farm Prop. L.L.C., et al., (Slip Opinion No. 2016-Ohio-5818)
Eisenbarth et al. v. Reusser et al., (Slip Opinion No. 2016-Ohio-5819)
Farnsworth et al. v. Burkhart et al., (Slip Opinion No. 2016-Ohio-5816)
Swartz v. Householder et al., (Slip Opinion No. 2016-Ohio-5817)
Shannon et al. v. Householder et al., (Slip Opinion No. 2016-Ohio-5817)
Taylor et al. v. Crosby et al., (Slip Opinion No. 2016-Ohio-5820)
Thompson et al. v. Custer et al., (Slip Opinion No. 2016-Ohio-5823)
Tribett v. Shepherd et al., (Slip Opinion No. 2016-Ohio-5821)
Wendt et al. v. Dickerson et al., (Slip Opinion No. 2016-Ohio-5822)
The Tenth District Court of Appeals issued a ruling in Simmers v. City of North Royalton, affirming the decision of the Oil and Gas Commission which overturned a mandatory pooling order of the Chief of the Division of Oil & Gas Resources Management. The case was decided under R.C. 1509.27 — the statute utilized by conventional oil and gas operators to apply for a mandatory pooling orders. R.C. 1509.27 allows the Chief to issue a mandatory pooling order on a “just and equitable” basis to property owners that do not voluntarily enter a lease to participate in a drilling unit.
In the case, the City of North Royalton did not voluntarily enter into a lease with the oil and gas operator due to purported safety concerns. In addition, the City was required to hold a public hearing before entering the proposed lease. Prior to the public hearing, the oil and gas operator applied for a permit and for a mandatory pooling order both of which were granted by the Chief.
The City appealed the Chief’s orders to the Oil and Gas Commission. The Commission found the Chief limited his consideration of whether negotiations for a lease with the City were conducted on a “just and equitable” basis to the financial considerations of the lease, but not the City’s safety concerns. The Commission found the Chief should had considered the safety concerns of the City in his order granting mandatory pooling.
The Commission’s decision was appealed to the Franklin County Court of Common Pleas and then to the Tenth District Court of Appeals. The Court of Appeals agreed with the decision the Commission under a deferential standard of review. The Court rejected the argument of the Chief that any safety issues are addressed in the permitting stage holding it “may not provide sufficient protection to a municipality concerned about particular safety issues …”
The majority opinion elicited a dissent from Judge Sadler relying on the statutory provisions of R.C. 1509.27. In particular, the dissent focused on the protection of “correlative rights” the mandatory pooling statute afford property owners. Those “correlative rights” relate to the monetary compensation a property owner may receive from oil and gas extracted from his property and that Ohio law only permits the Commission to consider non-economic factors (such as safety) to the extent they may affect the value of the property owner’s correlative rights.
The dissent also expressed its view that the Commission did not have jurisdiction to consider safety issues in the context of an appeal from the order of the Chief granting a mandatory pooling application.
On April 7, 2016, the Ohio Environmental Protection Agency (OEPA) announced a public comment period for a package of draft general permits for oil and natural gas midstream compressor stations. Applicants seeking coverage under a general permit would be required to demonstrate that the facility meets the general permit eligibility criteria. A general permit establishes pre-defined permit terms, including requirements relating to equipment installation, operating standards, monitoring, recordkeeping, and reporting. OEPA stated that the new general permits would authorize emissions from a wide variety of sources, including: natural gas-fired compressor engines; diesel engines; dehydrators; flares; compressors; equipment (pipes, pumps, etc.); liquid storage tanks; truck loading operations; and pigging operations. Comments are due May 18, 2016.
Senate Bill 257 was introduced in the Ohio General Assembly on December 30, 2015. The Bill, introduced by Senators Bill Seitz and Michael Skindell and co-sponsored by Senator John Eklund, would revise current Ohio Revised Code Section 5301.07. The current version of Section 5301.07 provides that certain defects in recorded real property instruments, such as a defective acknowledgement or improper witnessing, are cured and the instrument is deemed to be valid and enforceable after 21 years after the instrument was recorded. Prior to 21 years, a challenge can be made to the enforceability of the instrument based on such defects. Under the proposed revisions in Senate Bill 257, there is a rebuttable presumption that the defective instrument which is signed and acknowledged by a person owning an interest in real property conveys or otherwise affects the interest of such person and is valid, enforceable and effective as if legally made without any defects. Such instrument shall also provide constructive notice to all third parties of the instrument, notwithstanding any defect. The presumption can only be rebutted by clear and convincing evidence of fraud, undue influence, duress, forgery, incompetency or incapacity. In addition, the time period after which such defects are cured is lessened from 21 years to 4. The changes proposed by the Bill also include an expansion of the type of defects which are covered by Section 5301.07. Under Senate Bill 257, the Section will apply to several specified defects, but is not limited to the defects listed, arguably expanding the application of the Code Section to any defect in a real property instrument. The Bill would also make the Code Section applicable to all “real property instruments,” which include deeds and leases. Therefore, if Senate Bill 257 is passed into law, litigation is likely to arise as to the section’s applicability to and effect on oil and gas leases.
The Ohio Supreme Court definitively decided a case that at one time threatened the validity of thousands of Ohio oil and gas leases. As previously reported in April of 2014, the Seventh District Court of Appeals overturned the decision of the Monroe County trial court in Hupp v. Beck Energy Corp., which originally held that a standard oil and gas lease form was void against public policy because it allowed a lease to be held in perpetuity. In January of 2015, the case was accepted for review by the Supreme Court of Ohio which issued a decision this morning affirming the District Court’s ruling. The Court held that the leases were not void against public policy and could not held in perpetuity because (i) delay rentals could only be used to maintain the leases during their stated primary term; (ii) the phrase “capable of being produced,” as used in the lease referred to the potential for production from a well drilled on the leased lands rather than the lands themselves; and (iii) that production “in the judgment of the Lessee” also applied to production from an existing well and not possible production from the leased lands. The Court also declined to read an implied covenant of reasonable development into the leases as they required development to commence within a certain period and contained specific language disclaiming implied covenants.
In Chesapeake Exploration v. Buell, the Ohio Supreme Court held that oil and gas leases constitute “title transactions” under Ohio’s Dormant Mineral Act (“DMA”). Under the DMA a “title transaction” constitutes a saving event to preclude severed mineral rights from being deemed abandoned and reunited with rights to the corresponding surface property. Of critical importance is whether an oil and gas lease constitutes a “title transaction” under the law. While the DMA defines the term “title transaction” it did not state whether an oil and gas lease constitutes a title transaction. The Court concluded that a “title transaction” is any transaction affecting title to any interest in land and that oil and gas leases affected title to land.