Selling LA Real Estate, the language in the Buy/Sell Contract regarding reserving minerals, and how that interacts with a current lease on the property...

I haven't seen this particular topic addressed here yet and wanted to solicit feedback from those who may know more on the topic. I'm selling a piece of real estate (acreage) that is currently leased to CHK but not yet drilled. I'm reserving minerals in the Buy/Sell contract and the language in the Louisiana Real Estate's Buy/Sell Agreement reads like this as it relates to reserving minerals:

 

"MINERAL RIGHTS: If SELLER transfers any mineral rights, they are to be transferred without warranty. ________% mineral rights owned by SELLER are to be reserved by SELLER and the SELLER shall waive any right to use the surface for any such reserved mineral activity or use."

 

So my question is: How does the language in the Buy/Sell agreement affect a current lease on a property which may grant an operator certain surface rights, say perhaps a drill site, pipeline access, roads, etc? In my particular case I have the "Drill site in a location acceptable to me" language." While I was the owner of the property at the time of leasing, I'm not likely to be the owner at the time of production. With the language in the LA Buy/Sell agreement stating that I "waive the right to use the surface for any such reserved mineral activity or use" I have to wonder if that interfers with the current lease in any way. If selling the property via this Buy/Sell agreement and waiving surface rights for development of the minerals actually served to revoke prior commitments between a lessor and lessee I would think that could pose a problem for operators somewhere down the line. Or not?

 

Curious to hear feedback on the topic.

 

Thanks in advance.

Tags: Minerals, Reserving, Rights, Surface

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HMI:

I point to Article 73 for your answer:

La. R.S. 31: 73 - Single servitude may not exist on noncontiguous tracts

A single mineral servitude may not be created on two or more noncontiguous tracts of land.
And there it is. That's very, very interesting. I'd venture to say that the avearge person out there is unaware that this can be done.
Dion, can't an original single contiguous servitude be later divided by a public road or the changing course of a navigable stream or river into two separate and distinct servitudes?
Skip (no more replies available under your response):

I suppose that such could be possible, but the circumstances under which such situations could occur are becoming increasingly rare. Road and highway ROWs (and expansions) by public entities are taken more often by actual surface transfers with a reservation in favor of the vendor in perpetuity. Navigable waterways can and do meander (resulting in accretion and reliction issues) but rarely do such changes actually alienate property to allow for such a situation (physical division of a servitude) to occur (I know, it does happen, on occasion - both the Mississippi and Red Rivers have allowed for several instances of this).

As a wild outlier, I have run across an instance where a navigable streambed did not divide a mineral servitude - The owners of the patent in a particular section of land contained a navigable streambed (the ownership and mineral rights usually belonging to state), but the patent did not except same from the grant. After the 1921 Constitution was enacted, the state was (statutorily, if memory serves) granted a certain period of time to attack any patent issued prior to 1921 as to the ownership of the navigable streambeds and/or waterbottoms. The owners of the property (successors of the entire area, including the navigable streambed) was possessed of the inchoate rights under which the original patent was issued, and having passed the statute of limitation, the owners owned it all. It created an extremely rare "bridge" under which a single servitude could be established across both sides of a navigable waterway.
There are some interesting instances of servitudes divided through changes in the course of the Red River in some highly productive core areas of the Haynesville Shale.
So Dion, am I to understand that if i owned land on one side of the highway or one side of a naviagable waterway I couldn't form what would be considered a contiguous tract with the landowner on the other side of either due to the interruption by the public road or navigable waterway? With the exception maybe being the highway if the land was puchased from a landowner (vendor) and they had their mineral rights into perpetuity and also subscribed to the "contiguous tract" arrangement being established?
HMI:

Sorry about the delay in reply. In short - yes. Even properties sharing a single corner (point) are not considered contiguous. And while the State does not physically own surface and minerals under but a rare few highways or roadways, as a matter of practice, such roads can actually demarcate servitude boundaries as landowners may convey up to the ROW extent of the road, thus reserving ownership of a strip underneath a portion of the old roadway. This creates a "stripe" of differing mineral ownership that can affect the contiguity of the bounding properties.

Tracts bounding roads with uncertain descriptions (as to whether the conveyed property constitutes a sale of rights underneath and to the centerline of the road) are covered by statute, at least as far as roads being in place since the mid-50s. But the wording and context of the conveyance dictates the intent (if not having to be determined judicially). This kind of thing happens more often than most people realize.
Good post Dion,

This is fairly common among timber companies and their large servitudes

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