Replies to This Discussion

Permalink Reply by Dion Warr, CPL on July 27, 2009 at 4:43

Jack:

To me it would hinge upon if the well would be spudded within the year, and whether the 2/3 interest was being cooperative. If the surface owner was being uncooperative, and a well could be spudded prior to prescription, I would take a 1/3 interest in 300 acres over none. Then again, I would doubt that a company would want to get in a hurry drilling a well when there would be over 30% of a unit unleased (my guess would be that signing the 1/3 interest and spudding a well quickly would probably serve to antagonize the surface owner as to leasing with the same company).

So I guess the short answer would be, if there would be any chance that the surface owner would be willing to negotiate at acceptable terms, and the company can afford to wait that long on their other lease(s) in the unit, the undivided 1/3 mineral servitude owner would probably be out of luck. If the 300 was spread over a couple of unit(s), O&G might adopt a different strategy as to each affected unit, but chances are, they would just wait.

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Permalink Reply by Jack B2 on July 27, 2009 at 4:48

Thanks Dion for your reply, most appriciated.

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Permalink Reply by Mac Davis on July 27, 2009 at 8:36

This does sound like yet another landmine for land buyers.

Suppose you're buying land in 2009 and you find out that mineral rights were sold in 2000. You think that you get the mineral rights in 2010. Unknown to you or the current property owner, a previous property owner sold his "forward" mineral rights in 2005.

Is there a requirement to file such sales of mineral rights at the courthouse? If the sale gets executed, but not filed, is is binding on future landowners?

Do such "forward looking" sales on land with severed mineral rights happen very often?

(Once again, assume Louisiana, no production, etc.)

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Permalink Reply by Dion Warr, CPL on July 27, 2009 at 10:20

Mac:

Once again, I refer to the Mineral Code:

PART 2. WHO MAY CREATE MINERAL SERVITUDES

R. S. 31:24: Right of landowner to create mineral servitude

Except as provided in Article 25, a mineral servitude may be created only by a landowner who owns the right to explore for and produce minerals when the servitude is created.

R. S. 31:25: Right of conditional landowner to create mineral servitude

A mineral servitude may be created by a landowner whose title terminates at a particular time or upon the occurrence of a certain condition but it is extinguished at the specified time or on occurrence of the condition divesting the title. [Emphasis added.]

In my reading, this would preclude 'random surface owners' who never have mineral interest in the subject property from clouding the title. The mineral servitude can never come into existence if the owner attempting to create the servitude never possesses the mineral rights. The reservation is simply of no effect.

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Permalink Reply by Mac Davis on July 27, 2009 at 14:21

It seems to me that 31:24 is the key to all of this.

i.e. the surface owner can't do anything, until the previous severance expires, even if it doesn't infringe on the current mineral owner's rights. Correct?

Despite any legal concepts to the contrary, this seems to say such a contract is invalid.

This sounds similar to the 10 year limit on reserved mineral rights. There's no legal concept that says you can't sell or retain your mineral rights forever. Other states allow this. Louisiana law simply makes such an agreement invalid after 10 years.

31:25 would imply that someone who retained mineral rights can't execute a lease that runs past the end of the 10 year term. (Duhh...)

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Permalink Reply by Mac Davis on July 27, 2009 at 15:34

31:25 would imply that someone who retained mineral rights can't execute a lease that runs past the end of the 10 year term. (Duhh...)

Scratch that. I think 31:144 says you can run past the end of prescription. YOW! sounds ugly.

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Permalink Reply by Ron Jon on July 29, 2009 at 11:35

That is correct. One cannot convey what they do not own.

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