Replies to This Discussion

Permalink Reply by The_Baron on December 15, 2009 at 5:05

Yes.

each owner can lease his/her undivided interest. so if you own an undivided 25% of a tract, you can lease your undivided interest.

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Permalink Reply by Mac Davis on December 15, 2009 at 12:58

Leasing the oil or gas would seem to be easy if there is a forced pooled unit.

Wouldn't there be a problem if one party granted surface access, pipeline rights, etc.?

What would happen if there wasn't a forced pooling in effect?

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Permalink Reply by Missy on December 15, 2009 at 15:38

I own undivided interest and it has always been my understanding that we (the owners) must agree to lease. I would think that the surface damage issue would be a problem since it is undetermined which part of the property , is leased. If one owner didnt agree or sign a surface damage agreement and the O&G co damages the property, who's 50% is damaged? Or if one owner leases and the other does not, in comes the drilling rig, pays leased owner 50%, drains minerals, what happened to the unleased owners minerals??

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Permalink Reply by Skip Peel - Mineral Consultant on December 15, 2009 at 15:59

An undivided interest owner may enter into any form of conveyance of their proportional share of the mineral estate without the permission of or notice to the other undivided interest owners. No legal restrictions. However, no individual or company would invest in the exploration for and production of those minerals without a substantial majority of the minerals under lease. Any undivided interest not leased will receive 100% of their proportional share of production after their percentage of the well cost is recovered by the operator from that share.

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Permalink Reply by Skip Peel - Mineral Consultant on December 15, 2009 at 16:26

LA. State Mineral Code:

Chapter 10. Co-ownership. Part 1. Creation of mineral rights by co-owners of land.

Excerpt: "One who acquires a mineral servitude from a co-owner of land may not exercise his rights without the consent of co-owners owning at least an undivided eighty percent interest in the land, providing that he has made every effort to contact such co-owners and, if contacted, has offered to contract with them on substantially the same basis that he has contracted with another co-owner. A co-owner of the land who does not consent to the exercise of such rights has no liability for the costs of development and operations, except out of his share of production."

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Permalink Reply by Missy on December 15, 2009 at 17:22

Makes me wish my co-owner had leased and I hadn't. :-) Merry Christmas and HAppy New Year.

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Permalink Reply by Bre Noland on December 15, 2009 at 18:03

What happens if you have 11 undivided acres and five co-owners? One has 50% AND usufruct. The other four have 25% each. Can they individually contract to lease 25% or any % of the property?

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Permalink Reply by The_Baron on December 16, 2009 at 4:00

Bre,

It depends. Is the usufruct for the land and minerals, or just a mineral servitude.

If the the usufruct is for the land and minerals, then the usufruct may lease, but the lease must be ratified by the naked owners or the lease will terminate with the usufruct.

If the usufruct is for a mineral servitude, then the usufruct has all executive rights to lease.

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Permalink Reply by The_Baron on December 16, 2009 at 4:03

from the mineral code:

§118. Right of usufructuaries to lease

A usufructuary of land may grant a mineral lease on the estate of which he has the usufruct if his usufruct includes mineral rights susceptible to leasing, but any such lease is extinguished with the termination of the usufruct. A usufructuary of a mineral servitude or other executive interest may grant a mineral lease that extends beyond the term of the usufruct and binds the naked owner of the servitude.

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Permalink Reply by Bre Noland on December 16, 2009 at 18:42

Thank you guys so much for the infomation. Obviously, you are much more informed with the oil and gas industry operations than I am. Mine is such a complicated issue and family problems make it even more difficult. The husband (usufruct) hid my Mother's will from her children (4 naked owners) for seventeen years. He tried to contract with a production company to lease the mineral rights. The production company notified us when they did the land search. Only then did we find out about the will. He could not sign a lease for any mineral rights without all of our approval. So I'm guessing he only has above ground usufruct. All communications and proposals with this man have failed to generate any agreeable situation to enable any of us to move forward and negotiate to lease our mineral rights. I am curious to know if anyone else has gone through a similar situation or knows of a solution to this problem. Preferably, legal.

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