Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on January 9, 2011 at 8:03

I believe that Kassi's group has a court date this year.  I am not familiar with the Ranchland group.  Litigation in these types of cases can be very protracted.  It can take more than a year just to decide the venue.  Generally speaking, attorneys for mineral owners wish to have a suit heard in district court.  Attorneys for energy companies wish to try the case in federal court.  Whether a suit originates in federal court or ends up there on appeal, plaintiffs must prevail before an extremely pro-business roster of judges.  It is difficult but not impossible to win a case against the O&G industry in federal court.  Petohawk lost a Most Favored Nations related appeal that received some publicity last year.  I'd have to check but I think that Kassi's group will get to have their case heard in the district court.

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Permalink Reply by FXEF on January 9, 2011 at 10:40

I see that CHK is drilling the Jones 20-15-14 H #1 well off the Rambin Rd. in Stonewall. Was Kassi's group located S20-T15N-R14W.... where CHK is currently drilling?

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Permalink Reply by Skip Peel - Mineral Consultant on January 9, 2011 at 11:02

Kassi's group contained non-contiguous mineral interests.  Only a portion of the members where unable to lease owing to the HBP question regarding the old Exxon lease.  I don't know which were effected or where their minerals were located.

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Permalink Reply by Frank on January 9, 2011 at 11:23

Her house, and most of the participants (I think), are in Section 30 which is south of 19 where I am.

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Permalink Reply by CypressKnees on January 9, 2011 at 9:39

Dear kcm,

Thank you for asking this question! I have wondered about this often, but was too much a wimp to ask.

Thank you!

CK

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Permalink Reply by Linda Whatley on January 9, 2011 at 11:36

I sure hope Kassi and her group come out on top........  we're pullin for you Kassi.

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Permalink Reply by kittycatmama on January 9, 2011 at 11:40

Hopefully Kassi and her group prevail and get their minerals back. It will set a precedent for others in same circumstances

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Permalink Reply by Skip Peel - Mineral Consultant on January 9, 2011 at 12:52

Kassi and her group, strictly speaking, never lost ownership of their minerals.  Haynesville, The Movie does tend to give that erroneous impression.  Kassi and her neighbors own their minerals and that is not the focus of the litigation.  The question is whether the minerals they own are subject to the terms of the old lease or whether that lease expired for lack of production at some time in the past.  This is exactly the type of situation that a horizontal Pugh Clause is designed to address.  And the concept of Held By Production (HBP) is not some archaic law peculiar to the state of LA.  It is a commonly accepted and tested part of the mineral codes of every state of which I am aware. The movie gets that wrong also.  Other than those two factual errors, Haynesville, The Movie is quite good IMO.

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Permalink Reply by kittycatmama on January 9, 2011 at 14:28

I never watched the movie. All this time I thought Kassi's group's litigation was about not owning minerals. Didn't realize that they owned the minerals but were bound by the old lease and just not

able to sign new leases with better terms. Some areas are not that lucky--some sections do not 

own their minerals or only have 1/2 ownership that is subject to

leases signed in 1960s at 1/8% or worse

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Permalink Reply by Skip Peel - Mineral Consultant on January 9, 2011 at 14:48

When Chesapeake ran the title on the minerals in Kassi's group, they found the old lease.  Only a potion of the original master tract had been included in a drilling unit but the production in that unit held the lease in force including the portion of the tract not included in the unit.  A horizontal Pugh Clause releases all lands covered in the lease that are not included in a drilling unit after the expiration of the primary term.

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Permalink Reply by Henry on January 10, 2011 at 2:20

One large, corporate landowner once told me they go so far as to write a separate lease for each non-contiguous tract, just to make sure that no issues like this ever come up.

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Permalink Reply by robert minton on January 22, 2013 at 14:37

Correction. 12.50%

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