Replies to This Discussion

Permalink Reply by BirdDawg, plain ole' idiot on May 24, 2011 at 14:50

U bet! And I assume you mean an undivided mineral owner.

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Permalink Reply by SallyQ on May 24, 2011 at 15:01

Yes, the minerals are undivided between two heirs, and the surface is undivided between one heir and a third party, one heir sold their interest in the property but reserved the minerals.  The property is under a lease now, but will expire this year, (no drilling in area).  If, and a big if, would that surface and mineral owner still be able to lease without the other surface owner signing?

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Permalink Reply by BirdDawg, plain ole' idiot on May 25, 2011 at 1:18

Sure. Any party can lease their portion any time they want to. But for any surface operations to be conducted on the property, all surface owners would have to agree and be compensated.

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Permalink Reply by Skip Peel - Mineral Consultant on May 25, 2011 at 1:27

I believe the mineral code requires a minimum of 80% of undivided interests in a tract be under lease in order to conduct surface operations and/or force pool.

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Permalink Reply by The_Baron on May 25, 2011 at 9:40

Yes Skip, that is correct. Of Course ideally its better to get 100% on your drillsite location.

 

§166.  Granting of mineral lease by co-owner of land

A co-owner of land may grant a valid mineral lease or a valid lease or permit for geological surveys, by means of a torsion balance, seismographic explosions, mechanical device, or any other method as to his undivided interest in the land but the lessee or permittee may not exercise his rights thereunder without consent of co-owners owning at least an undivided eighty percent interest in the land, provided 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 or other costs, except out of his share of production.

Acts 1974, No. 50, §166, eff. Jan. 1, 1975; Acts 1986, No. 1047, §1; Acts 1988, No. 647, §1; Acts 1995, No. 479, §1, eff. June 17, 1995.

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Permalink Reply by SallyQ on May 25, 2011 at 14:15

Eighty percent.  I don't think I would qualify, if I'm right.  I own undivided, 80 acres with the person who purchased my sibling's half of the property.  My sibling reserved the minerals, so I own 50% of the minerals in the 80 acre tract, she owns the other half.  So, she sold her undivided interest of the property, but reserved the minerals, I am still undivided with her on the minerals, 50/50.  The man who bought her half of the property, but not the minerals, owns, undivided the surface.

If company X wanted to lease the minerals, company X would approach the mineral owners first, sister and me, then approach surface owners, man (told sister to try and hook him instead of selling) and me.  Sister and I would sign, but man is not sure, he wants the minerals to run out, 10 years, and then the minerals would be his, (maybe I should try and hook him, but that would only give me 75%, right?).  Could sister and I lease if surface owner doesn't sign for surface rights?  (Sister wore her special dress when she sold, and she got top dollar, maybe sister needs to get out her dress and wear it if we have to make a deal to sign a new lease?) lol  

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Permalink Reply by Skip Peel - Mineral Consultant on May 25, 2011 at 14:21

Sally, the mineral estate has precedence over the surface estate.  The surface owner can not sign a mineral lease and can not deny access and reasonable use of the surface unless such is prohibited in the controlling lease(s).  LA. state mineral law favors the mineral estate and the production of those minerals.  The surface owner has little or no say in the matter.

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Permalink Reply by PJ on May 25, 2011 at 14:33

Skip, does Arkansas have a similar approach to precedence of mineral estate over surface owner rights?

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Permalink Reply by SallyQ on May 25, 2011 at 14:41

Thanks Skip, I'll tell sister to not bother with the dress, just bring a pen. lol

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Permalink Reply by P.G. on May 25, 2011 at 1:45

This is a good question...so if one of the two owners could lease the whole property,(property has not been divided) would he get royalties from the whole property or just on his 50% interest in the property? Who'd get the other 50% if there were no lease, or some kind of agreement from the other undivided owner?

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Permalink Reply by Skip Peel - Mineral Consultant on May 25, 2011 at 1:51

One of the two can not lease the whole property.  They can only lease their proportional share.  If the tract was part of a unit, one owner would have a royalty interest and the other would be an Unleased Mineral Interest.

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Permalink Reply by P.G. on May 25, 2011 at 2:18

Thanks..

I was wondering what rights or control or just how much rights an undivided owner might have without the other owner's permission if the property was not partitioned...

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