Replies to This Discussion

Permalink Reply by Snake Stewart on December 3, 2008 at 15:56

Thank you guys and gals for the dialogue so far but Baron has touched on part two to this equation. At what point does the original landowner lose the right to continue to lease the minerals ? When you sell 1/2 of your minerals to surface owner, do you still have the veto power to force surface owner to sign a new lease after the first lease expires ?

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Permalink Reply by The_Baron on December 3, 2008 at 16:12

I'm not sure i understabd the question.

You never have veto power. You can lease your minerals regardlas of what hte other owners do, and they can do the same. But you can only lease what you own. If you lease for three years, but you only will own the minerals for one more year, the lease is only valid for that one year.

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Permalink Reply by Bobi Carr ("parker") on December 3, 2008 at 16:15

And you can lease and they can be force pooled, etc.

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Permalink Reply by Dion Warr, CPL on December 4, 2008 at 8:33

Snake:

Veto power... Do you mean executive rights? If so, the reservation of minerals (or half, in this case) would have to be accompanied by a reservation of all of the executive rights, at which point all that would be left to the purchaser is the right to receive one-half of the monies (bonus, rental, royalty). The seller would have the sole right to enter into the lease, and could then dictate terms. Short of that, purchaser and seller are now both undivided mineral interest owners in the tract, and are free to encumber their interest as they so choose.

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Permalink Reply by Bobi Carr ("parker") on December 3, 2008 at 16:17

Baron,

If they reworked the well and it was a valid good faith effort to produce, why wouldn't it interupt prescription?

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Permalink Reply by The_Baron on December 3, 2008 at 16:23

I don't believe that reworking is enough. I will review this in the morning to be sure.

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Permalink Reply by Bobi Carr ("parker") on December 3, 2008 at 16:42

Baron,

Thanks. I am only going by something I read on here.

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Permalink Reply by The_Baron on December 3, 2008 at 16:46

From the mineral code:

29. How prescription of nonuse is interrupted

The prescription of nonuse running against a mineral servitude is interrupted by good faith operations for the discovery and production of minerals. By good faith is meant that the operations must be

(1) commenced with reasonable expectation of discovering and producing minerals in paying quantities at a particular point or depth,

(2) continued at the site chosen to that point or depth, and

(3) conducted in such a manner that they constitute a single operation although actual drilling or mining is not conducted at all times.

I will look at my collection of legal opinons, etc. to see if reworking a nonproducing well will count tomorrow.

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Permalink Reply by Snake Stewart on December 3, 2008 at 16:51

Thanks Baron,
That will give me plenty to chew on until tomorrow.

Permalink Reply by The_Baron on December 3, 2008 at 16:15

graysands,

wells are not HBP, land is.

Royalties have nothing to do with prescription. The only issue is does the mineral servitude expire due to non use.

for examples:

you sell your land, retain the minerals. A well is drilled and a drilling unit is formed, but that unit only covers 1/2 your land. The half not covered by the unit is not effected by the well and will prescribe normally because its minerals were not effected by the well.

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Permalink Reply by Bobi Carr ("parker") on December 3, 2008 at 17:15

Graysands,

I unit for HS gas production is USUALLY 640 acres (but not always).

A unit could also be MUCH smaller as in an oil well. But an oil well would also hold the minerals by production.

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Permalink Reply by The_Baron on December 3, 2008 at 17:47

Units are not 6 sections.

A section is one squre mile. 640 acres.

In north La units are typically by section. Not always though. Wells can be drilled on a lease basis if no unit exists.

read this, then come back

http://dnr.louisiana.gov/cons/CONSERGE/TPG_Kumar-Articles.pdf

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