Replies to This Discussion

Permalink Reply by The_Baron on April 9, 2010 at 5:03

My texas experiance is limited, but....

You own your minerals, assuming that the seller owned them when you purchased the land. You will of course be due the royalty, but it is your responsibility to notify the lessor. The factor here is that the lease is before the deed in the public record. Call your title attourney......You may have some recourse. Title insurance may also help.

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Permalink Reply by king john on April 9, 2010 at 5:34

in texas, the minerals transfer in the sale unless reserved by the seller. in this case, common sense would dictate whichever document was executed first, (i mean signed), would have precedence. the question to me is if the minerals were already leased prior to the sale would they be severed at that point and not be eligible to transfer in that type of a transaction?
kj

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Permalink Reply by Randy on April 9, 2010 at 6:16

Baron is right, he would be bound by the terms of the lease, would need to notify the lessor though.

There may be some recourse, but as Texas law is a different animal, he'd need to consult w/ an attorney.

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Permalink Reply by Etola on April 10, 2010 at 9:18

I agree with The Baron. If the minerals were not reserved in the deed, then you own the minerals and since that person signed an O&G lease before selling indicates he/she owned the minerals. Your deed should mention if the minerals were reserved. If they were, you will never own the minerals unless you go back to the seller to purchase them. If the minerals were not reserved, then the minerals are yours and are still leased and you need to notify that O&G company to tell them you now own the minerals. (for royalty purposes and future leases) The seller should have disclosed that information to you when you bought the land. Usually, in the sale of land where minerals are not reserved, something is specified about the minerals being under a lease contract and that contract being honored. If that is not the case, then I think you need to get a title attorney involved.

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Permalink Reply by Parkdota on April 9, 2010 at 6:17

I work in RE (MS) and what I've seen is that if the mineral contract was signed before the then sale the old land owner owns the minerals. In our state I don't believe the deed has to be recorded in order for it to be valid but everywhere is different. MS is a non disclosure state. However, it should have more than definitely been disclosed to the buyer. So, from what I can tell the buyer/current land owner has definite grounds for litigation if they were not made aware of the mineral sale/contract. I would get a good attorney and prepare for a multiple year long battle.

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Permalink Reply by Mac Davis on April 9, 2010 at 8:45

IANAL

If the lease was not recorded before the sale, it seems you may have a good claim for fraud on the part of the seller. It may depend on how the sales contract and deed are worded. The last time I saw the exact wording, it mentioned leases "of record." This was NOT in Texas.

If you intend to pursue the issue, get a good lawyer quickly. You may need to see if you can freeze the proceeds of the sale before the seller can do something with it. Be sure the lawyer knows Texas O&G law.

This sounds like it could be ugly and expensive to litigate. How many acres are involved? Will it be worth the money to pursue the matter? What area of Texas? Do you know what the bonus payment was?

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Permalink Reply by j garrett on April 11, 2010 at 4:11

You own the minerals. The minerals are under lease. You are bound by the terms of the lease, but you own the minerals and any production of the minerals. This is assuming there is not something specifically contradicting this in the deed and any prior deeds on the property (prior reservations etc).

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Permalink Reply by Wildcat on April 12, 2010 at 4:28

There are no mineral reservations or restrictions (or mention of any oil and gas lease) in the deed, and I have had a title opion done there are no severed minerals. I guess I own it free and clear, except I'm bound by the OGL the previous owner signed. What would happen if the oil and gas lease was recorded after the deed transferring me the property?

Thanks for all your help.

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Permalink Reply by Randy on April 12, 2010 at 7:12

Wildcat, in my opinion, that has no bearings. I'm not an attorney, and if I were you I'd get some competent advice from a professional O&G attorney. BUT, you are probably just bound by the lease and he got you for the lease bonus money.

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Permalink Reply by j garrett on April 13, 2010 at 1:56

Hmmm... Good question. Texas is a "race state" when it comes to recording leases, ie first lease recorded wins. But a Deed might be different, I don't know. Maybe Skip Peel or The Baron can chime in...

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Permalink Reply by adubu on April 13, 2010 at 11:47

Wildcat--the lease may be valid only if ratified by new owner( and why would you want to do that!!) this could be mess for all parties. Why did the Seller not disclose the lease at time of sell and why in world did seller not reserve his minerals in the deed if he had a lease. The lawyer or title company that did the closing could be open to malpractice. GO STRAIGHT TO A GOOD OIL & GAS ATTORNEY NOW and let him help resolve your problem and see if the lease can be legally terminated so you can receive your asset (Minerals) and lease at your choice with terms you negotiate. If you have deed and deed has been record for record the land and minerals should be your. Make sure the deed has been record for record in County of location of land. If not RUN TO RECORD OFFICE and record it. Who drew up the Deed?

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Permalink Reply by adubu on April 13, 2010 at 12:19

wildcat--also if seller did not reserve even the present leases then they would be part of assets you brought if in you title opinion run the minerals had never been severed. The lease you may have to live with as "asset purchased". The seller would keep the bonus money but royalties I believe you now owe. GOOD LUCK and let us know what happens

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