Family owns property in Desoto Parish. Leased out to EXCO with producing wells. Some of the siblings want to partition the property. If this goes to court could we lose the mineral rights? We don't want to lose the royalties we are being paid.
Many partitions that I have read reserve the minerals as they are before the partition.
I suggest that you get the services of an experienced O&G attorney for a partition involving producing minerals.
Thank you all for your response. We have an attorney but not an O&G attorney. Looking for an attorney now.
Skip, there are 10 people wanting to partition 2, 40 acre tracks. 6 siblings and 4 children of a deceased sibling. The two tracks are leased to EXCO for mineral rights. 6 acres are leased to EXCO for surface rights. There is a well pad on that 6 acre track. We have producing wells on both tracts. One 40 acre track is in one unit and the other 40 acres is in another unit. We already have 3 attorneys involved. An attorney is filing a partition lawsuit for the 4 children, one sibling is filing a partition with his own attorney and 3 siblings are filing a partition with another attorney. 2 siblings are doing nothing. The 2 siblings do not want to use any of these attorneys. None of the attorneys are O&G attorneys. I am the wife of one of the siblings who does not want to use any of these attorneys. We think we need an O&G attorney. I have no idea what is going to happen. It looks like this will end up getting partitioned by the court. Would it really help at this point for the other two sibling to hire an attorney? This is getting so complicated I think someone could write a book on our family. I think we should sell the two properties, reserve the mineral rights and leave all of the attorneys out. This looks like it's going to take up a lot of time and money.
Cindy, my suggestion would be to review this with an O&G attorney and get an opinion. That opinion will let you know if you need to take some action or not. You will have performed your due diligence and decide accordingly what action to take, if any. An opinion alone is not an expensive proposition.
Skip, thank you for your suggestion.
I would think that prescription would hold the minerals (Louisiana) until production has ceased for 10 years, and then the minerals would belong to the surface owner.
Mineral rights will go to respective surface owners in a partition, unless reserved. Therefore, in order to maintain status quo, there will have to be a mineral reservation in the partition. Strongly advise obtaining services of attorney experienced both in real estate transactions and oil & gas to draft this document. It is sometimes unbelievable to see how people screw this type of transaction up. It isn't particularly complicated, but people still get it wrong. I think its because they try to save money on the front end. I would also recommend a new survey of property to establish surface boundaries, although this doesn't have immediate effect on minerals if you do reservation.
Thank you for your advice.
IANAL, but I would concur with all that has been said here so far. Even family partitions can get hairy when there are minerals and royalties involved - if not now, then later, as descendants far removed from the event and intent of those currently partitioning the property are vested in title.
Other aspects to consider in addition to the above:
Contiguous property: If the lands are contiguous, a mineral servitude created in a partition is established as a single mineral servitude. If the lands are non-contiguous, then such a partition simultaneously creates separate mineral servitudes on each contiguous block of property which can be maintained only by operations or production either on the servitude tract or any portion being pooled in a producing unit or on which operations within said unit can maintain each servitude. Keep in mind that lands that meet only at a common point do not constitute contiguous property. This can become a sore spot with family property where (a) certain parcel(s) are "worked" or produced for minerals while others are non-productive or sparingly productive. The servitudes can be reestablished by the current owners by voluntary agreement (acknowledgement), but all affected owners must join lest the acknowledgement not be effective as to all properties. Should family relationships become strained or distant, this becomes less likely to occur, and there is very little recourse to compel such owners to join in such agreements, particularly if one family faction is a beneficiary of such servitude(s) prescribing (which then can devolve into the classic "haves" and "have nots" scenario).
Effect of Unit Operations on Mineral Servitudes: Most owners are familiar with operations and production on lands burdened by a mineral servitude as being able to maintaining a mineral servitude (or, at least that upon ten consecutive years of nonuse, such servitudes prescribe in favor of the instant surface owner). Unit operations and/or production that do not occur on servitude lands are a different matter, in that such operations and production only affect use or nonuse as to that portion of said lands pooled or unitized. A general reservation of minerals can be sufficiently held by operations or production at any depth or within any unit, but only as to the geographic confines of the pool or unit so designated. In an amenable voluntary partition (family lands, for instance), owners can and do contract at the time of the partition to reserve minerals, and also can, as contracting parties, so elect to invoke the provisions of Article 75 of the Mineral Code, which provides for operations on or affecting any portion of the property burdened by a mineral servitude to be sufficient to interrupt prescription as to the entire of the servitude. This provision does not extend to include noncontiguous property within its scope, the rules for which are set out elsewhere in the Mineral Code and applicable law (referenced above).
Bottom line, if you have an attorney with specific knowledge of oil and gas law looking into this and/or preparing documents for you, these are concepts with which they are familiar - you should be at least cognizant of these issues when requesting that this be done so that you can better represent your intent in doing so. On many occasions, what one does versus what they intend to do end up being different, only to be discovered years later when very little can be done to amend it, and this happens quite a bit when parties either utilize inexperienced counsel, are inattentive as to communicating their full intent, or worse yet, attempt to craft such agreements themselves with very little knowledge of the implications and consequences.
Good luck to you and your family in receiving continuing fruits of production and in crafting a mutual beneficial agreement going forward.
Dion, You are right.There are so many aspects to consider. Thank you for your detailed response and for wishing our family good luck. All of this is way over my head. Our family should hire an O&G attorney. Although, I do appreciate the information I receive on this site. Cindy