HBP by CV well affect on 10 year prescription

I have the opportunity to purchase mineral rights beneath the cotton valley. These minerals are held by production by numerous cotton valley wells. The Seller of the minerals does not currently own the surface land. The Seller is offering to sell me the deep mineral rights. My question is whether or not the current CV wells will hold the deeper rights for longer than 10 years or will the deeper rights revert to the mineral owner of the CV wells after 10 years?

Thanks in advance.

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Permalink Reply by Jay Murrell on March 13, 2009 at 11:25
The CV production is interrupting prescription on the servitude. Unless you are paying less than ten dollars for these rights GET A TITLE OPINION from a competent oil and gas title attorney.
Permalink Reply by Jay Murrell on March 13, 2009 at 16:24
Phaco:

The depths covered by any existing lease has absolutely nothing to do with prescription.. The volume of current production has absolutely nothing to do with prescription. A demand for development has absolutely nothing to do with prescription.

The servitude is maintained by production on the servitude, or, if there is a unit well off of the servitude, but the servitude lies entirely within the unit boundaries, then the entire servitude is maintained by the producing unit well. If not all of the servitude is in a producing unit, then that part of the servitude outside of the producing unit will prescribe 10 years after the servitude was created, unless otherwise interrupted.

Servitudes, unless specifically depth restricted, apply to all depths for the life of the servitude. In this case, I believe that unless the rights below the CV are developed they would revert to the surface owner ten years from the date of the servitude because you would actually be creating a second servitude when you split the rights below the CV. Its complicated.

Get a lawyer.

Best,

Jay Murrell
Permalink Reply by phaco on March 13, 2009 at 23:11
Thank you for your input. I live out of the area. Do you have any suggestions for a lawyer?
Permalink Reply by Jay Murrell on March 14, 2009 at 1:13
G Warren Thornell
318.424.4777

he's busy, but all of the good ones are now

tell him Jay Murrell referred you
Permalink Reply by Bobi Carr ("parker") on March 16, 2009 at 5:26
Phaco:

The depths covered by any existing lease has absolutely nothing to do with prescription.. The volume of current production has absolutely nothing to do with prescription. A demand for development has absolutely nothing to do with prescription.

The servitude is maintained by production on the servitude, or, if there is a unit well off of the servitude, but the servitude lies entirely within the unit boundaries, then the entire servitude is maintained by the producing unit well. If not all of the servitude is in a producing unit, then that part of the servitude outside of the producing unit will prescribe 10 years after the servitude was created, unless otherwise interrupted.

Servitudes, unless specifically depth restricted, apply to all depths for the life of the servitude. In this case, I believe that unless the rights below the CV are developed they would revert to the surface owner ten years from the date of the servitude because you would actually be creating a second servitude when you split the rights below the CV. Its complicated.

Get a lawyer.

Best,

Jay Murrell
Hi Jay,

I'm having difficulties understanding how selling deep rights would establish a new servitude instead of just subrogate that portion of the existing servitude.

If the person who presently owns the deep rights does not sell, then those rights would be held indefinitely while production exists and then 10 years after it ceases.

How then would the deep rights that are established under an existing servitude not follow the existing established prescription authorities that are already in place?
Permalink Reply by Jay Murrell on March 16, 2009 at 6:49
Parker,

I believe that when you create a servitude within a servitue, such as when you sever deep(er) rights, you are creating a whole new servitude which is subject to a new prescriptive period.

That's my memory of it. I'll ask around.

JM
Permalink Reply by Bobi Carr ("parker") on March 16, 2009 at 7:03
Jay,

Thanks.

I was under the assumption that you would buy a portion of the existing servitude.
Permalink Reply by Jay Murrell on March 16, 2009 at 7:24
Hi Parker:

I was wrong. Section 69 of the Mineral Code covers this question. Basically, you cant divide a servitude. You can sell lower depths but that doesn't create a new one.

Jay
Permalink Reply by Bobi Carr ("parker") on March 16, 2009 at 7:29
Jay,

Thanks. I thought I understood, but I also wanted to divide the interest based on whether there was a Pugh clause or not.

It seems like a mineral servitude is an either/or scenario.

Kind of like you can't be a little pregnant. You either are or you're not.

You can see why so many of us follow Jim's posts. He knows this stuff inside and out.
Permalink Reply by Bobi Carr ("parker") on March 16, 2009 at 7:10
Jim,

That was my amateur analysis.

If there is no Pugh clause it's all or nothing.

I think Jay will probably agree once he researches it.
Permalink Reply by Bobi Carr ("parker") on March 16, 2009 at 7:22
Jim,

If you had a stratigraphic Pugh clause excluding HS and sold HS minerals the CV production wouldn't hold the HS rights.

Where if you were subject to an existing lease, wouldn't the CV production hold the HS minerals indefinitely as long as there is CV production

Or would ANY production any in zone hold ALL of the minerals as long as there is producition and for 10 years after production ceases?
Permalink Reply by Bobi Carr ("parker") on March 16, 2009 at 7:36
Jim,

Evidently this is even sometimes confusing to experienced landmen and mineral buyers. I remember the last time this came up plenty of people with experience had to think it through again before they were sure.

I'm glad you have the patience and knowledge to keep reiterating it for us.

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