Mineral Acre Discrepency

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1

I have noticed an ever-increasing problem where the leasing agency has computed fewer mineral acres than you think that you own.

My standard operating procedure is to require the leasing company to provide a runsheet, along with a mineral breakdown for my client’s interest on a tract basis and a plat shaded on a tract basis that ties into the mineral breakdown.

Many companies’ knee-jerk reaction is that this is their work product and they will not give it. I was trained that the land business is one of building good relationships. I would never refuse a reasonable landowner for that request. Others will disagree, but I have been very successful on the company side treating mineral owners better than I would expect for myself.

If the oil company is unable to arrive at a net acreage that you can confirm, what I have done in the past is to have a side letter agreement wherein if a later examination of title discloses additional net acres, then the company is bound to pay additional bonus based on the new net acreage amount. Now, I have begun to include words to accomplish the same in my proprietary lease form.

To summarize:

  1. Make the oil company prove up their title into you.

  2. Have the oil company furnish you with a runsheet (history of title) as to your interest.

  3. Protect yourself if additional net acres are proved under the lease and make sure that you are compensated for those additional net acres.

2

Buddy, Thanks so much for those suggestions. I appreciate your time and help!

Karen

3

The problem with asking the O&G company for a run sheet is that the title examiner likely did a run sheet for the entire tract and not just a single person. This causes us to have to go back and redact out ANY info that is not specific to the client. This is a time-consuming process. And the DTO should be gospel enough when it shakes out.

I would suggest adding some language to the lease legal like “…it is the intent of the Lessor to lease 21.37 nma (or whatever they came up with) in the following tract…” that way it is clear that the intent was not to lease it all but only the amount they have identified. The DTO should pick up any further mistake, and you can address it with a separate lease if needed.

4

Ben, my form stipulates the net acres by tract and the net acres leased. I still get a runsheet.

Best,

5

Thanks Buddy all you do is appreciated much.