Replies to This Discussion

Permalink Reply by Dion Warr, CPL on March 28, 2018 at 14:26

Skip:

There was a period of time between mid-2006 to mid-2007 that a memorandum statute had been repealed (from the Civil Code) and there was no statutory allowance for filing of same until approximately a year later (under the Administrative Code, if memory serves).  During that intercessionary period, memorandums of oil and gas lease were not considered sufficient constructive notice to third parties.  However, after that, any such compliant memorandum could be filed of record with the proper minimum information and serve as notice.  One big change: under the Civil Code article, lessees could file such notices unilaterally without joinder of the lessor.  For the last ten-plus years, however,the signatures of the lessor(s) and lessee(s) are required.

Between late 2007 to about 2010, it wasn't a requirement to file leases of record - it was more a question of speed.  The new statute required two fully executed documents.  That meant yet another document to synthesize and proof, another complete set of signatures to gather, police and patrol for compliance, and more complex instructions to send with mailouts for lease acquisition packages, etc.  During the time of the HS leasing frenzy, brokers largely discounted the necessity of obtaining memorandums or extracts of lease from rank and file owners - depending upon the terms or corporate preference (sometimes necessitated by large corporate lessors), memos were only obtained from the largest and/or most sophisticated landowners.  The changes in terms, etc. was just happening too fast for the brokers and landmen to keep up - it didn't so much matter who might have known what in the public when bonus offers changed weekly if not daily.

After things slowed down, lessees and brokers regained both their collective senses and time again to weigh whether all such negotiated terms needed to be placed of record for all to see.  And we went back to what we were doing in large part - collecting memos and leases at the same time, recording the memos, placing the leases in with the lease packages, etc.

Something else to consider - lessors' legal counsel, who might have their own standard rider(s) and special provisions that they may wish to safeguard, will sometimes also insist on filing a memorandum in lieu of a lease in order to protect their own intellectual property and/or fruits of their labor.  Lawyers and their clients can get a bit cross with others as well as each other for leaving their own "special terms" out there for the general public just to copy out of the record and use for their own.

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant on March 28, 2018 at 14:36

Thanks for the clarification, Dion.

• ▶ Reply

Permalink Reply by Dion Warr, CPL on March 28, 2018 at 14:36

EDIT: After some research...

Wasn't designated in the LAC - it was enacted and codified as La. R. S. 44:104.  Until... January 1, 2011, when it was redesignated under Act 284 of 2010 to the Civil Code, effective the above cited date as La. R. S. 9:2742.  Link here.

• ▶ Reply

Permalink Reply by Skip Peel - Mineral Consultant on March 28, 2018 at 14:41

Thank you, Dion.  I suspect that the incidence of lessor legal counsel wishing to hide their custom lease language is somewhat less than that of mineral lessees wishing to hide the royalty they approve in their leases.  Especially since the recent trend is to offer one fifth instead of one quarter.

• ▶ Reply

Permalink Reply by Andrew on April 9, 2018 at 0:04

The vast majority of leases today are not filed of record, because lessees do not want the public to be able find out what terms they have agreed to with other owners. You may find some good leases recorded from 2008 or earlier, as the Louisiana Notice of Lease statute was enacted in 2005.

• ▶ Reply

Permalink Reply by Cara Leggett on March 28, 2018 at 10:45

Steve,

Thank you for the information and advice. Based on other posts in different threads on GHS.com, I think some in my area were offered $1000 per acre last year, and, now, GEP is coming back to gather the rest of us into the fold. So, I am going to ask for $1000 per acre. I have begun the process to obtain a knowledgeable oil/gas lawyer to represent a lessor. I'll spend the lease money dollars on protecting the property and my son's inheritance. If there is a 20% royalty to be collected--great! If not, then, the lease money used to protect our best interests kept us from being taken to the cleaners. 

• ▶ Reply

Permalink Reply by Cara Leggett on March 28, 2018 at 10:31

Thanks, Brian! I've started the process to obtain a knowledgeable lawyer. I appreciate your advice! 

• ▶ Reply

Permalink Reply by Brian Tannehill on March 28, 2018 at 10:37

You bet, Cara

Hope they hit a big one!

• ▶ Reply

Permalink Reply by Cara Leggett on March 28, 2018 at 11:35

Me, too!!!  Actually, that's much more likely than my winning the lotto - since I rarely buy lotto tickets. ; )

• ▶ Reply

• ‹ Previous
• 1
• 2
• Next ›
• Page