Prescription and Depth Clause
I heard today something that has blown me away. Please need some imput for someone else!
If I sell my land in say 1979 reserve my minerals, then in 1983 there is a lease with a depth restriction of if no production below 5000' feet at the primary term of the lease it expires. Then today production still going from that lease at 3000' feet and I still get a royalty check from it. Who owns the deep rights? Me or the Surface owner? I was told the surface owner has them. That if you only own mineral right it is best NOT to have a depth clause because the clock start ticking when lease expires below the production. If this is true, what mess it could be. Guess you could have many levels of mineral owners. I researched and could not find a clear answer.
If I sell my land in say 1979 reserve my minerals, then in 1983 there is a lease with a depth restriction of if no production below 5000' feet at the primary term of the lease it expires. Then today production still going from that lease at 3000' feet and I still get a royalty check from it. Who owns the deep rights? Me or the Surface owner? I was told the surface owner has them. That if you only own mineral right it is best NOT to have a depth clause because the clock start ticking when lease expires below the production. If this is true, what mess it could be. Guess you could have many levels of mineral owners. I researched and could not find a clear answer.
Views: 417
Replies to This Discussion
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Permalink Reply by Skip Peel - Mineral Consultant on -
When you sold your land and reserved your minerals, you created a mineral servitude. That servitude was effective for all depths. Servitudes are maintained by production. Prescription is interrupted and the ten year period does not begin again until production ceases. IMO, the terms of the lease terminate the lease rights below 5000" after the primary term but have no effect whatsoever on the servitude. You would then be free to enter into another lease for your deep rights. Sounds like wishful thinking on the part of the surface owner. I suggest that you contact an experienced O&G attorney.
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Permalink Reply by Foxiecajun on
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I have done title research for the last 6 yrs, and was told this by a landman with 20+ years and ask another that I respect his knowledge and both said the same, they are from South La. Could that have anything to do with it? I was thinking what a can of worms this could open. My line of thinking and what little I know was with you! Like I said before I need to read something on this in black and white.
Any ideas where I might find it.
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Permalink Reply by Chase on
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I agree with Skip.
Production at any depth/formation will interrupt prescription at all depths.
The mineral servitude will be maintained at all depths.
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Permalink Reply by Skip Peel - Mineral Consultant on
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I believe the operable code is LA. State Mineral Codes, Chapter 4, Part 3, Article 27 - Modes of Extinction of mineral servitudes. But then again, IANAL. Just a landman.
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I am with you both 100%....I dont need this more complicated than it already is!
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Permalink Reply by Linda Whatley on
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That's exactly how it was explained to me ...... the minerals are yours as long as there is any depth production.
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Permalink Reply by The_Baron on
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unless there is a provision in the language creating the servitude, all depths are interupted by the producing wells.
Individuals have the "freedom of Contract", that is the right to renounce or modify what is established in their favor if the renouciation or modification does not affect the rights of others and is not contrary to the public
good.
The best example of this I have seen is a case where a timber company placed language in their reservations that allowed unit wells not on their land to interupt prescription on their entire servitude.
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Permalink Reply by Henry on -
Here's my thinking....
RS 31:71 says: "Unitization of a portion of a tract burdened by a mineral servitude does not divide the servitude."
I say your servitude is not divided. Only some depths were unitized.
Not that I have any real clue, however.
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Permalink Reply by The_Baron on
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the statute you refer to is talking about dividing horizontally.
As i said above prescription would be interupted, unless there is some nfo that has been left out.
As per the mineral code, A unit well interupts prescription on all lands included in the unit. While the unit does not divide the servitude, it will only interupt the lands inside the unit unless the well is on the servitude, in this case it would interupt for all of the servitude.
Read my blog on prescription for more details.
http://www.gohaynesvilleshale.com/profiles/blogs/prescription-and-m...
http://www.gohaynesvilleshale.com/profiles/blogs/prescription-and-m...
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Permalink Reply by Henry on
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Baron,
But, might it not be interpretable to apply vertically? The words don't explicitly say "horizontal."
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