An interesting tidbit of inormation
As you all know by now my neighborhood is held by production from a 1955 lease and a well in a completely different section. I and some of my neighbors have spent the past 3 weeks discussing the need to move forward with a demand for release and possible litigation with all of the folks in the affected area. There has been much discussion re, the attorney fee, court costs, etc.
There have been many questions raised and, since more and more people out there are finding themselves in the same possition I thought I would share some questions and answers:
1. If you are HBP in an old lease but your section was never drilled how do you get out of it?
Answer: Under the Louisiana Mineral Code you must issue a demand for release. If the company does not release you in the specified time (30 days) then you file suit. There is case law from the Louisiana supreme court that has set a president in some cases of releasing people from leases if the old lease was assigned and divided in the assignment. You will need a good oil and gas attorney to review the research and determine if your case has a chance of succeeding.
2. If your land is HBP from an old lease and the well is in a different section that was also part of the old lease shouldn't you get royalties from the well that has you HBP?
Answer: No, the only way you get royalties is if you are in the producing unit. The rest of the land in the old lease is not entitled to royalties but is still HBP if there was not pugh clause.
3. If you previously signed a lease then found out there was an old lease out there how does that impact the lease you recently signed?
Answer: the lease you signed is not valid because the title was not clear if the property is HBP from another lease.
4. If you file a lawsuit to break the old lease does that prevent the O&G company from drilling in your section until the suit is completed?
Answer: no, if the O&G company has enough acreage leased under clear title a lawsuit will not necessarily prevent them from drilling. They may choose not to drill in an area impacted by a lawsuit but a lawsuit as the one we are discussing would not preclude them from doing so.
5. If you have a lease that is about to expire and a lawsuit is filed will it stop the clock on the lease?
Answer: No, the lawsuit will not stop the clock on an existing lease that is not subject to said lawsuit. If you are fighting an old lease such as the 1955 lease we are under and you signed a lease 3 years ago not knowing about the old lease then the only impact a lawsuit will have on the current lease is to legitimize it if you break the old lease. (confusing huh).
6. You are stuck in an old lease and your neighbors are moving forward with a lawsuit. What if you decide not to participate in the lawsuit and just wait until they break the old lease. Can't you then just reap the benefits of what they did without having to pay the attorney?
Answer: No, only the people in the lawsuit will be released from the old lease. You will then have to file your own lawsuit to get out of the old lease. In my oppinion, it is better to go with the group from a fiscal standpoint.)
I know this blog is not as flowery or interesting as my prior posts but I thought the information may be of benefit to some of the folks out there experiening the same problem.
There have been many questions raised and, since more and more people out there are finding themselves in the same possition I thought I would share some questions and answers:
1. If you are HBP in an old lease but your section was never drilled how do you get out of it?
Answer: Under the Louisiana Mineral Code you must issue a demand for release. If the company does not release you in the specified time (30 days) then you file suit. There is case law from the Louisiana supreme court that has set a president in some cases of releasing people from leases if the old lease was assigned and divided in the assignment. You will need a good oil and gas attorney to review the research and determine if your case has a chance of succeeding.
2. If your land is HBP from an old lease and the well is in a different section that was also part of the old lease shouldn't you get royalties from the well that has you HBP?
Answer: No, the only way you get royalties is if you are in the producing unit. The rest of the land in the old lease is not entitled to royalties but is still HBP if there was not pugh clause.
3. If you previously signed a lease then found out there was an old lease out there how does that impact the lease you recently signed?
Answer: the lease you signed is not valid because the title was not clear if the property is HBP from another lease.
4. If you file a lawsuit to break the old lease does that prevent the O&G company from drilling in your section until the suit is completed?
Answer: no, if the O&G company has enough acreage leased under clear title a lawsuit will not necessarily prevent them from drilling. They may choose not to drill in an area impacted by a lawsuit but a lawsuit as the one we are discussing would not preclude them from doing so.
5. If you have a lease that is about to expire and a lawsuit is filed will it stop the clock on the lease?
Answer: No, the lawsuit will not stop the clock on an existing lease that is not subject to said lawsuit. If you are fighting an old lease such as the 1955 lease we are under and you signed a lease 3 years ago not knowing about the old lease then the only impact a lawsuit will have on the current lease is to legitimize it if you break the old lease. (confusing huh).
6. You are stuck in an old lease and your neighbors are moving forward with a lawsuit. What if you decide not to participate in the lawsuit and just wait until they break the old lease. Can't you then just reap the benefits of what they did without having to pay the attorney?
Answer: No, only the people in the lawsuit will be released from the old lease. You will then have to file your own lawsuit to get out of the old lease. In my oppinion, it is better to go with the group from a fiscal standpoint.)
I know this blog is not as flowery or interesting as my prior posts but I thought the information may be of benefit to some of the folks out there experiening the same problem.
Views: 116
Add a Comment
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Comment by insomniacnla on October 12, 2008 at 14:31 -
Kassi,
I know several of the landowners that have joined in with your fight and I just wanted to tell you that your work is much appreciated. To say that you have worked hard for your group would be a gross understatement. Thank you.
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Comment by Kassi on October 12, 2008 at 14:02
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In this type of situation someone gets into it by purchasing property that is HBP from a very old lease they did not know existed (53 year old lease).
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Comment by H P Bryant on October 12, 2008 at 13:56
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How in the heck does someone get into this kind of mess? Either poor leasing knowledge or downright conning by o&g co. or what? I'm glad I used an attorney now. Sounds like the conservation dept. didn't do much to protect the landowner on unitization; but then, I guess they don't have to.
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No, if the judge rules the old lease was severed when the originating company assigned only one portion of it and reserved the rest to themselves. Then the company never developed the reserved portion of property and thus the current land owners should, in fact, be released from the old lease as the primary term expired 50 years ago then the current owners become free agents so to speak. If a company is already drilling in their section then the company is basically faced, in our case, with over 140 acres of unsigned land owners.
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Comment by Cottontop on October 8, 2008 at 5:03
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Kassi, you have excellent taste in attorneys. Is Allison Jones still with his firm. She is awesome too.
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Comment by danny meyers on October 8, 2008 at 4:25
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Need consultant for sec.31 and 15 of t15n r14w.Contact Dan Meyers at (318)925 6457 or(318)455 6458.
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Sesport, I'll take that raise! Just send some paying customers my way. ;-).
There is only one attorney I trust completely: Randy Davidson.
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Tiger Cdo: You need to trace the old lease. It may not still be owned by the original lease holder. Many times companies assign leases to other companies. The lease may have changed hands several times over the years. Also, the last company who purchased it may have merged with other companies sending the lease further down the line. Once you know who owns the lease today you can look into contacting them.
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Comment by sesport on October 7, 2008 at 14:37
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Thanks again, Wonder Woman. :) I'm recommending that you get a raise & a huge bonus. BTW, are you able to disclose the attorney you're working with, or is this confidential?
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Comment by Iris on October 6, 2008 at 23:50
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What is there is an old, old lease (expired 1956) covers several sections, don't know how to contact the original leaseholder? I have been told there is a way to research & prove on Sonris there are no existing wells or HBP but don't have a clue.
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