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Comment by intrepid on March 10, 2013 at 6:03

Alert: Texas mineral owners need to contact your State Representatives and Senators now and tell them to OPPOSE HB 100 Ns the identical companion SB 136. These Forced Pooling bills restrict your rights in leasing and controlling your mineral rights. Please review:http://www.tlma.org/legislative.htm for more information. Please take action NOW. HB100 is up for a committee hearing on Wednesday March 13 in House Energy Resources Committee.

Comment by Ben Elmore on June 6, 2011 at 8:49

Sorry Buddy, I have been on vacation.  That is correct.  Thought the court did not specifically say this, by continuing to pay royalty, the oil company was limited to adverse possession of the leasehold estate.  If the company produced the wells and never paid royalty for the applicable limitaitons period, they would have been able to claim adverse possession of the entire mineral estate.  In reality, the adverse possession was raised only as an alternative defense to the lessors' claim that the lease terminated; i.e., the company's primary argument was the lease did not actually terminate, but even if it had, the company had nevertheless adversely possessed the leasehold estate. 

Comment by Buddy Cotten on May 28, 2011 at 17:48

Dear Ben,

 

Beg Pardon.  The Pool Case.  I do not know where my mind was.  I was thinking Pool and typed Parks.

 

NGPL v Pool 124 S.W.3d 188 (Tex. 2003).

 

To me it was a bewildering decision on the application of adverse possession to severed mineral interests.

 

What I got out of the case was that if there was a lease in place and you paid royalties, even though the lease had terminated, you in effect had adversely possessed the leasehold estate rather than the mineral estate.

 

Is that about right?

 

Thanks,

 

Buddy

 

I am sure there are some progeny cases out there as well

Comment by Ben Elmore on May 24, 2011 at 3:21

Which Parks case?  What is the full cite? 

The Sheppard case is a ridiculously bad decision that misapplies Texas law.  We are stuck with it for now.  Given its holding, there is really not much you can put in a lease to protect from its result, other than a clause stating that its holding does not apply.  Start with that.  I have a similar clause relating to the Heritage Resources v. Nationsbank holding that nullifies the cost free royalty clause.    Other than that I'm not sure what you can do. 

The cross-conveyance issue was not determinative according to the court of appeals, since the Sheppard lease included a clause that pooling would not effect a cross-conveyance.  I don't recall the Supreme COurt really addressing the issue at all, as it relied instead on the pooling agreement that Sheppard was not even a party to.  Under Sheppard, the unit remains valid and binding on the lands previously covered by the terminated lease regardless of the cross-conveyance issue.

 

I think the best bet is to include a clause that Sheppard does not apply.  Parties can contractually agree to anything they want.  Getting a company to agree to that is the hurdle.

Comment by Buddy Cotten on May 23, 2011 at 9:42

Dear Ben,

 

What is your take on the Parks case where the lessee adversely possessed the leasehold estate?

 

Also, with the Sheppard case holding that the expired lease does not kill the unit, do not you agree that the lease form itself should provide a remedy for leases which have ipso facto expired and are unreleased, creating an unmarketable title?

 

The implication on the Sheppard Case to me is that the unit is potentially valid until dissolved, since there is a cross conveyance of minerals/leasehold.

 

Best,

Buddy Cotten

Comment by Ben Elmore on May 23, 2011 at 7:29

I think it is a good idea and it can also serve as protection if the lessee trys to come back down the road and argue the lessor somehow revived the lease or the lessee tries to claim adverse possession in some manner.

Comment by adubu on May 22, 2011 at 11:41

Ben--Should you always request Lessee file release when you lease expires without any activity during time minerals leased? Other than making it easy for landsman to find that your minerals are avaiable to lease and not HBP is there any other legal reason to have release filed?

Comment by jffree1 on April 18, 2011 at 14:53

http://www.legis.state.tx.us/tlodocs/82R/billtext/pdf/HB02087H.pdf#...

 

Here's a link to the text of the bill. 

Comment by intrepid on April 5, 2011 at 17:42

Great topics and discussions!

Comment by Ben Elmore on March 9, 2011 at 12:12

Sherry, I created a discussion topic and posted your question in there to make it easier to keep all replies and comments related to your topic in one place.  Discussion title is "Question re: Mineral Title"

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