Replies to This Discussion

Permalink Reply by Robert Duke on November 13, 2010 at 14:19

Hi Obed,
Yes, thanks for weighing in on this one. I would think that an attorney that accidentally put more limitations on your mineral reservation could potentially even be in for a bit of trouble, unless of course it was clearly a condition of the sale, agreed on, with full understanding of the implications by the seller. I am really really glad I engaged a solid attorney on all this stuff, let me say. This wording stuff is tricky, but I see no holes in what I've got, after really careful review :-)
Thanks again - Robert

Permalink Reply by Two Dogs, Pirate on November 13, 2010 at 14:24

Obed, you can not blame the attorney all the time, it may be based on the negotiation process between buyer and seller. Keep in mind this property is around Opelousas where nothing is certain when you bore the hole, unlike the Haynesville.

Permalink Reply by Land Rover on November 14, 2010 at 15:53

Thank you Mr. Duke. I hope Mr. Dogs picks up on this. Maybe Mr. Dogs should've talked to CBS, they might have explained this to him.

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Permalink Reply by Two Dogs, Pirate on November 15, 2010 at 3:51

Might have explained What?

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Permalink Reply by Land Rover on November 14, 2010 at 15:58

"Any GHS member lawyers out there willing to comment on this? (thanks in advance)"

Done.

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Permalink Reply by Land Rover on November 14, 2010 at 16:04

Merely "starting" a well is good enough to suspend the run time of the lease, but not necessarily enough to interrupt prescription. There is a legal "test" that a "BONAFIDE" attempt to establish production must be made, and I'm not sure that merely starting a well would meet this legal test. By the way, even bonafide operations (with no production)would interrupt prescription on a mineral reservation, but not for a royalty reservation, Only actual production (i.e., "use" of the royalty servitude) will do that. Hope this helps.

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Permalink Reply by Land Rover on November 14, 2010 at 15:56

"Would someone who actually deals with mineral rights comment on these issues, please!" Consider it commented upon, Mr Dogs.

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Permalink Reply by Land Rover on November 14, 2010 at 15:50

Not true, Mr. Dogs. Any well, even a non-producing one, would interrupt prescription and renew the reservation for another 10 years. Thank goodness you "won't talk" the CBS producers. They're confused enough already!

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Permalink Reply by Robert Duke on November 14, 2010 at 17:14

Hi Mr Gandolfo,
Thanks for the legal input, and thanks to all that contributed. It was a sort of protracted discussion, but I think useful as Mac Davis said in the end, in pointing out some potential to shoot yourself in the foot in the deed, either as seller or buyer. No doubt in my mind that if you are dealing with any acreage at all, you should get a good lawyer involved in drawing up the deed, and be sure everyone understands the implications.

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Permalink Reply by Two Dogs, Pirate on November 15, 2010 at 4:03

Mr. Gandolfo, my comments had nothing to do with what you are talking about. Who gets the minerals after the 10 year mineral reservation? Who gets the minerals at the end of a life usufruct? All I have stated pertains to the deed into Gene which I have not read. Gene states that the minerals were reserved for 10 years.

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Permalink Reply by Robert Duke on November 15, 2010 at 9:12

Hi Two Dogs,
I agree that J.M. was sort of missing your point, but what I believe he was focusing on was that my reading on statute on the 10 year prescription period, when it starts, and what interrupts it, is correct. The whole discussion would have been a lot less confusing if say Gene had said something about the seller reserving minerals for 9 years (granted, that would have been patently nuts on the part of the seller, most likely), because then it would have been clear that the 9 year period came from a statement in the deed, not the mineral code; if he had said "11 years", then the whole deed would have been invalid (my best guess), as there is language in the mineral code that places an upper limit on the rights of a seller. I noted in the mineral code some statement about "confusion" being a possible condition that does something to the prescriptive period - I forget what - but geez... Anyway, as a seller, what you want to do, I would think, is get a good lawyer to write up the deed, in such a way that preserves your mineral rights for you to the full extent possible. As a buyer, you may want to negotiate something more in your favor, but then a seller with an on-the-ball lawyer would have to advise his seller client of the consequences of the language (and it would seem that it would perhaps support a higher per-acre sales price). I think your (Two Dogs) contribution to all of this is the whole concept of it being possible that there is language in the deed that can give away rights the seller would otherwise have if he reserves minerals "correctly" if you specify a 10-year limit, you just gave something away! My contribution was to clarify some of the issues around prescription, though for a lot of folks I probably just made it more confusing. Bottom line for me - all of us that might sell land should get a lawyer that is someone we trust as knowledgeable and ethical in this area to write up the deed (and in my experience, these guys are best found by going through other knowledgeable folks that you trust, though such people are not always available). I am in good shape myself (whew!), and hopefully the discussion will encourage others to be careful.
Thanks to all again - Robert

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Permalink Reply by The_Baron on November 15, 2010 at 9:21

if he had said "11 years", then the whole deed would have been invalid (my best guess)
actually if you state a prescriptive period of more than 10 years, the period is automatically reduced to ten years.

I can't believe I just waded into this muck.... Its really not that complicated. As two dogs has stated it would depend on the wording in the deed. When I first answered, I admit that I just assumed that it was a standard mineral reservation, and not a time limited reservation.

I would like to add that a reservation could be set to terminate after a set period of less than ten years, and it could also be worded to have prescriptive period of less than ten years. By reducing the prescriptive period, you are in effect retaining the methods to interupt prescription, but in a set end date, the minerals would revert to the surface owner wether or not any exploration takes place.

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