Replies to This Discussion

Permalink Reply by The_Baron on November 13, 2008 at 10:57

Keep in mind that even a dry hole will interupt prescription.

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Permalink Reply by Kurt Grussendorf on November 13, 2008 at 13:04

Howdy, Baron! I hired a landsman to look at all of this. I have had the land for 2 years. It is a great site with over 1,000 feet shoreline on the main lake and bordering Bear Creek. I bought it for the recreational value. I did take some timber off of it last year.

My understanding is that if there is production the clock starts to retick. In other words, if a well is drilled in the tract that includes the land there has to be production within 10 years. The man who owns the mineral rights can lease it and if there is production anytime in the 10 year time span from my surface rights ownership date he keeps all rights as long as there is production. Moreover, production must be sustainable and of a marketable nature.

Let us say I had one day to go until my 10th anniversary and the mineral rights owner was informed that a well had just achieved production of gas. I would then have to wait until production ceased and then wait another 10 years.

I do not think a dry hole would interrupt the clock. But you are pretty savvy on this so I take it you are saying that there must be no drilling at all in the tract for 10 year span while I have surface rights to get me to mineral rights?

Of course, if there was no well drilled at all in the ten year span my prescription would hold.
But I am pretty sure it has to achieve production of some sort.

Enlighten me a bit. Thanks.

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Permalink Reply by gawain on November 13, 2008 at 14:00

The Baron is, as usual, correct. The drilling of a well constitutes a "use of the servitude" (=an attempt to produce) and interrupts the ten-year period, which does not begin anew until the attempt is abandoned (=the well is plugged).

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Permalink Reply by Kurt Grussendorf on November 13, 2008 at 14:12

Hi, Gawain. Does the well have to be on the actual land or can it be in the overall tract or pool that includes the land? I do know that to date there has been no activity on either the land itself or any lease pool including the land. So, the clock is ticking for now. Of course, the owner of the mineral rights--the guy who sold me the surface rights--has had an offer to lease--but there has been no activity. I am in extreme northern Sabine Parish and almost on the border with Desoto. Of course, there has been alot of activity further north in Desoto and a well is going in a good way to the east of me in Sabine. Of course, the land is simply beautiful with a knock-out view across to Texas and some 15 miles down the lake. Always a nice breeze. Any mineral rights would be just a bonus. But with 36 acres it would be nice to have a pipeline cross it somewhere. They have certainly build a nice road in there. My land is surrounded by land that was once International Paper but is now owned by John Hancock for timber production. I have very mature pine that I selectively cut and made 53K on last year. So, the surface has been good to me.

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Permalink Reply by gawain on November 13, 2008 at 14:22

So with 36 magnificent acres, who needs them smelly ol' minerals, anyway?! And you can have the pipeline acrost 'em even without the minerals!

But, seriously, folks, if the tract is included in a unit on which an "off-tract" well is drilled, prescription is interrupted *only* as to that portion included in the unit. If the well is drilled on you, OTOH, it's interrupted as to the entirety of the servitude (=mineral reservation) acreage.

I'm a long way from Sabine, but I think I can hear the ticking. I can definitely feel the breeze!

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Permalink Reply by Kurt Grussendorf on November 13, 2008 at 14:46

Thanks, Gawain. Yeah, you are right. Just enjoy the view! Except I am not retired yet and I can't build on it for a few years. I have the breeze at my back. Thanks again. God Bless, Kurt.

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Permalink Reply by The_Baron on November 14, 2008 at 4:24

Hows the fishing?

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Permalink Reply by Kurt Grussendorf on November 14, 2008 at 13:40

Hi, Baron. I am stuck here working in Pensacola, Florida. But I hear the fishing is great. Huxley Bay is across the way and I know the guide over there. Lots of ducks and geese come in there as well. There are loads of turtles, too. Snakes appear to be rare--I'm glad of that--but I don't go looking for them. I will be there over Christmas and walk the land. Lake level is kept up, now, with new agreement with the SRA--Sabine River Authority.

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Permalink Reply by Two Dogs, Pirate on November 14, 2008 at 5:30

Kurt, this property was acquired in an exchange with International Paper back in the early 1980s. A lot of IP property gets complicated when it comes to minerals. Did the Landman do a complete search on the mineral title or just a cursory examination? Some of the IP servitudes date back to 1931. It could be that someone other than Brian Porter owns the minerals. Mr. Hendrix, who acquired the property from IP never granted an oil lease on the property. Mr. Porter granted a lease to Elora Land Holdings on 1-20-05 and a well was spud on 11-2-05 the well was a dry hole and is listed as status code 31, shut in dry hole future utility.

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Permalink Reply by Kurt Grussendorf on November 14, 2008 at 13:36

Howdy, Two Dogs! You certainly know alot about the property. I was aware of the dry hole. My landsman did a pretty through search and it appears Hendrix had mineral rights and these transferred to Porter. I bought the property in Nov. 2006, and I know Porter has received an offer for a lease. I was told a pipeline was coming down from Cow Bayou area on extreme north Toledo Bend. Do you have property in the area? Did you know Hendrix or do you know Porter? I inherited about 1,000 tires from Porter whoi stacked them in a hole in the back acreage. It seems Hendrix had brought in several thousand to stop the bank from eroding. Other than that, Brian Porter is an ok guy. I have a rather weird neighbor, J. W. Holtman. He is really eccentric and keeps horses on his 4 acres. But I can get along with him as well. Thanks for your reply.

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Permalink Reply by Two Dogs, Pirate on November 14, 2008 at 15:21

Kurt, I am a Landman. I would assume you paid a pretty hefty price for the landman to do the work, because of the amount of time it would take to preform a mineral search on IP. The landman may have had the information already but if he didn't it would take thousands of dolloars to do the work. I have some information on the area that was done on an Olin servitude and your property seems to be free of that one but IP has more than one servitude running against their property. My problem is the amount of time that Mr. Hendrix had the property without granting a lease. I look for red flags in what I do and this would throw up a red flag. Mr. Hendrix had a collection of old cars listed in his Judgment of Possession, I would have liked to have seen them. I don't think I know Mr. Holtman but there are many different types up in that neck of the woods.

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Permalink Reply by The_Baron on November 14, 2008 at 4:23

Thank you gawain,

All that has to be made is "good faith" operations to find minerals. The clock resets after any such attemt.

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