landowner

Undivided Landowner, can one party lease without the other?

Question; Can an undivided land owner lease their undivided interest without the other owners signing?

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Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on May 25, 2011 at 7:20
It varies, PG.  Non-industry members of the site tend to think of everything in terms of HA Shale development.  The vast majority of HA wells are drilled in "compulsory units" meaning the tracts in the unit are force pooled, unitized.  Wells may be drilled in "voluntary units" where all the mineral owners/lessors agree to the lease terms and all leases are held by the same company or one or more companies who are in 100% agreement with the operator and their development plan.  Wells can also be drilled as "lease wells" where a single lease covers the area to be produced based on the well spacing for that formation.  The rights and regulations vary for all of these types of wells.

landownerPermalink Reply by Donna on May 25, 2011 at 6:42
Skip, as in my situation - the heirs of the other 4 acres are not aware that I leased my portion which is 12 acres - if they decided to lease and the land is no longer being leased - are they entitled to any of my lease $$  ?

Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on May 25, 2011 at 7:21
There is no legal obligation to inform the other undivided interest owners of your lease and they are not entitled to any of the terms or benefits of your lease.

landownerPermalink Reply by G-Dawg on May 25, 2011 at 7:32

Should the other heirs engage into a lease, they are only entitled to the percentage equal to the ownership they have in the undivided property.  For example, if the undivided property is 10 acres and there are 2 heirs, each heir normally would be entitled to 50% rights to the whole property.  They would not each be heirs to 5 acres.   If more heirs are involved, then the percentage changes.


landownerPermalink Reply by Donna on May 25, 2011 at 12:27
If I'm doing my math right, I am okay.  16 acres of undivided land of which 8 belonged to my mother, the other 8 my aunt.  My aunt gave me her 8 (legally) and my mom's 8 are between myself and my niece and nephew.  Of that I have 4 and they have 2 each.  I leased 12 acres.  Both mom, aunt and brother have passed.  Thanks for your help.  :)

landownerPermalink Reply by Rozzy on May 25, 2011 at 7:36
Yes you can sign without others. it happened with my aunt while we signed with a company and got nothing she signed with another and received thousands... :/

landownerPermalink Reply by P.G. on May 25, 2011 at 13:56

Say an undivided 10 acre property had 2 owners...and one leased...would the company leasing only pay the one owner a bonus on 5 acres? If so which 5?

Or would the company pay the bonus for the 10 acres but only half the bonus?


Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on May 25, 2011 at 14:06
If each owned an equal share, each owner would have 50% ownership interest in each acre or 5 net mineral acres, 10 X .5 =  5.  There is no bonus without an executed lease and the bonus is paid on the ownership interest of the lessor executing the lease.

landownerPermalink Reply by P.G. on May 25, 2011 at 14:11
So in a 50% ownership interest, it would figure out to half the bonus on ten acres..

Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on May 25, 2011 at 14:17
The bonus is not paid based on the total acres in the tract.  It is paid on the fractional portion of the whole owned by the individual(s) executing the lease.

landownerPermalink Reply by P.G. on May 25, 2011 at 14:24
How would the description describing the property be written in the lease? If a well was drilled, which part of the property would be held by production?

Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on May 25, 2011 at 14:56
Leases cite tracts as described in deeds, not the proportional interests of owners.  Your second question is not clear.

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