I've read so much in the last few weeks, I think my head is going to explode. I read in Louisiana, you can sell your land but retain your mineral rights. (I am sure everyone knew that.) I think that I read that after a period of time (10 years?) the mineral rights revert to the current owner. Am I crazy? I am sure I read this somewhere, but since I can't find it now, I'm starting to doubt myself. Does anyone know the answer to this?
You can sell the surface separate from the minerals, but if no production occurs within 10 years of the sale, then the mineral rights revert to the surface owner. This is different from Texas where mineral rights can be permanently severed from the surface. Kind of screwy.
Depending on your lease you may not even have to be paid a royalty for said period of time before the ten years starts counting.I think that some leases stipulate that even an attempt to improve or work well can keep someone under lease.Check me on that but I feel sure that I have come across this online.
I have some questions regarding a hypothetical situation that could result from the 10-year rule.
In May 2000 Farmer bought a few hundred acres that may be in this play. Seller reserved 1/2 of the minerals. There has been no production, and neither Farmer's 1/2 nor Seller's 1/2 has been leased.
This situation obviously raises some issues of strategery for Farmer. Should Farmer try to negotiate with Seller to release his 1/2 to Farmer? Assuming Farmer's net acres are enough to block unitization, should he just wait out the 2 years?
I'd also be curious to hear anyone's thoughts as to how an E&P or a broker would deal with such a situation.
could the person that sold surface but retained mineral rights sell the mineral rights to o&g co. If so is 10 year rule still in affect with party that bought the mineral rights if no production had taken place?
i was under the impression rights transfer after 10 years unless a well is put on property. if no well is on surface after 10 years, check transfers to surface owner at that point in time. am I wrong? are there any lawyers on this site?
All, I found the statue that deals with this: Louisiana RS 31:16.
"The basic mineral rights that may be created by a landowner are the mineral servitude, the mineral royalty, and the mineral lease. This enumeration does not exclude the creation of other mineral rights by a landowner. Mineral rights are real rights and are subject either to the prescription of nonuse for ten years or to special rules of law governing the term of their existence. "
A lawyer's comment would be nice here. I ain't one, but I take the above to mean that production has to occur, not necessarily a well on the property, but in the unit.
Everyone needs to remember: Leasing and Conveying mineral rights are two totally separate deals. Leasing, you can have your mineral rights back after certain criteria are met, i.e., no production fo 10 years, etc. However, a "conveyance" is a complete transfer of OWNERSHIP! ...of your mineral estate to a company/or another individual. "You have no rights to it from this point on."
With leasing...you will retain your mineral rights once a 10-year period of no production is met, the mineral right (in Louisiana) reverts back to the surface right owner.
I believe SBossierGuy's interpretation is correct. In Louisiana, a person can convey (or retain) ownership of minerals separate from the surface; however, if there is no production for ten years after the separation, the conveyed (or retained) minerals prescribe to the surface owner.
This is different from most other states. In Texas, for example, the mineral estate may be owned for an unlimited period separate from the surface estate, regardless of production.
(I realize I've basically repeated what OutofState wrote, in a more concise fashion, 8 hours ago.)
As exciting as this is, we know that we have a responsibility to do this thing correctly. After all, we want the farm to remain a place where the family can gather for another 80 years and beyond. This site was born out of these desires. Before we started this site, googling "shale' brought up little information. Certainly nothing that was useful as we negotiated a lease. Read More