Clarification on Deed Wording

Hope this is the right forum to ask this in.....

I'm seeking some clarification on mineral rights ownership for my property. I've completed a deed search back to the original developer in the 1980's whom did not retain the rights, as most of my neighbors are receiving lease payments.

Here are the details.

Mineral rights were not expressly reserved when I purchased the home as a foreclosure.

After reviewing the previous Deeds, most of them didn't mention anything about mineral rights, and some had prefab statements that concluded with an "if any" exist closing.

However there is one deed several owners back in 1998 that states the following:

"Reservations from Conveyance:
Easements, rights-of-way, and prescriptive rights, whether of record or not; all presently recorded restrictions, reservations, covenants, conditions, oil and gas leases, mineral severance, and other instruments, other than liens and conveyances, that affect the property, taxes for the year 2001, the payment of which Grantee assumes."

Does this hold up as a legal reservation of mineral rights, or is it too broad/not specific enough? Is there another record I should search for other than the deed? I'm assuming that it means I do not own the rights. I'm at a dead end, should I stop here or is there anything else I can do?

Thanks!

Thanks for the reply. I agree that is sounds very boilerplate, but after reviewing the deeds all the way back to the developer this is as specific as it gets when referring to mineral rights.


It’s my understanding that if the rights are severed then they become a separate entity, wouldn’t there be some record of this outside of the deed?

Dear Trey,

Without looking at all of the conveyances, there is no way for anybody to determine mineral ownership.

When Title Companies close title on real property, they generally do not mention mineral rights and in most cases except them from the Title Insurance Policy. The reason being, the title companies will run title from inception into the developer, then lot by lot from that point forward - to run minerals would add too much cost and risk to the policy of insurance.

A mineral servitude can be created by reservation or sale.

In Texas, we have something called the Four Corners Rule, meaning in essence that the entire document must be examined and taken into account when an interpretation is needed.

When no mention of mineral rights are mentioned in a conveyance, the minerals (if any) are conveyed in the sale, unless the description of the property or the granting clause (in any of the previous deeds) only references the surface estate.

With limited information, I can speculate, with 75% certainty, that you own the mineral rights under your lot.

Why were you not leased?

Mistake, likely. Otherwise, the leasing company got stopped on the job before they got to you (this happens more often than you can imagine).

Has any drilling or production occurred?

Buddy, thanks for the response. My neighbors never employed a landman, they were contacted directly by the company about 2 years ago for the first lease that lasted for two years. No drilling occurred during that period. Then on the 25th they started to receive new lease payments for the same amount as before for another two years. This time around the payments are from Chesapeake Operating.

Not sure why I wasn't leased, they only started sending checks on Friday. Also considering I haven't owned the property for more than a year, maybe they haven't updated/re-investigated ownership ? Of course I'm just speculating.

I did get in touch with the community relations department, and they told me to send a copy of my warranty deed, with a lease reference number to Chesapeake to process a change of ownership. I'm assuming this is good news, in that they didn't immediately shoot me down. Although it's quite possible that the community relations dept doesn't have any of the actual info.

Dear Trey,

If you have not owned the property more than a year, it is now just as likely that your property was leased by your predecessor in title.

If you have the ability, run your predecessor's name in the direct indexes, looking for an oil and gas lease.

Trey,

You just mentioned a "new" key player..Chesapeake! If a well has been or is being drilled, call their Division Orders area. You'll be transferred several times until you get to the Analyst responsible for this particular well. You will need the legal description of your property when you call.

I recently had to do this with them on some non-participating royalty interest i own. They told me they (Chesapeake) were holding royalty payments in suspense because they didnt know where to mail the payments. Reality is they were holding payments because they chose too. They had already made surface damage payments to 2 of 3 parties of royalty interest. They had also paid county property tax on their portion of the production assigned to each of the 3 parties. Bottom line is Chesapeake mad NO EFFORT to contact the royalty owners and make payments prior to my call.

They are now suppose to be processing suspended amount and setting up future periodic royalty payments. After 3 weeks i have not heard a word though....



Trey said:

Buddy, thanks for the response. My neighbors never employed a landman, they were contacted directly by the company about 2 years ago for the first lease that lasted for two years. No drilling occurred during that period. Then on the 25th they started to receive new lease payments for the same amount as before for another two years. This time around the payments are from Chesapeake Operating.

Not sure why I wasn't leased, they only started sending checks on Friday. Also considering I haven't owned the property for more than a year, maybe they haven't updated/re-investigated ownership ? Of course I'm just speculating.

I did get in touch with the community relations department, and they told me to send a copy of my warranty deed, with a lease reference number to Chesapeake to process a change of ownership. I'm assuming this is good news, in that they didn't immediately shoot me down. Although it's quite possible that the community relations dept doesn't have any of the actual info.

Buddy,

Thanks for the info, I just searched the prior owners name (instead of Deed instrument number like before) and found a lease document signed in April 2008. Set to expire 3 years after the signing date with a two year option period. This was the owner that was foreclosed on, three owners before myself. The next two most recent owners listed were banks.

Now that they are doing re-lease, I'm assuming I should be the one to receive the payment?

JMH,

No wells are being drilled, I haven't even noticed any pad sites being prepared. There was a lot of sensor equipment around a few months ago, however. I just mailed a copy of the warranty deed to their land data office, but I will try to get in touch with the departments you recommended to see if they can provide any info.

Dear Trey,

Mystery solved. Check the change of ownership provision in the 2008 lease. Probably requires you to send a certified copy of the document creating the change of ownership. Reference the Entry Number or Vol/Page and Lessor of the lease that you bought your property subject to. You must do this timely in order to get paid properly.

Many people seem to think that the operator is psychic or runs title to every property every month or so. A contract was created and most situations are already addressed, this being one of them.

Trey said:

Buddy,

Thanks for the info, I just searched the prior owners name (instead of Deed instrument number like before) and found a lease document signed in April 2008. Set to expire 3 years after the signing date with a two year option period. This was the owner that was foreclosed on, three owners before myself. The next two most recent owners listed were banks.

Now that they are doing re-lease, I'm assuming I should be the one to receive the payment?

Thanks again for all the help everyone.

I've sent in the info they requested, and will make some phone calls. We'll see how it goes.

I guess at this point I either own the rights. The bank somehow owns them. Or Chesapeake mistakenly mailed the check to the previous lessor and now they've cashed it and fled the country.

Wanted to update everyone. They're going to process a change of ownership which will take 6-8 weeks. However here's the kicker, a community relations person for Chesapeake said that they will not need to extend my lease as drilling will be underway before it expires.

The lease that was signed on my property expires April 3rd, my neighbor received a lease extension and his contract is dated March 26th. Can 9 days make that big of a difference?

Thanks!

Sounds about like Chesapeake…

JMH,

Why don't you explain your snide remarks about Chesapeake? I have had nothing but wonderful dealings with them.

You are free to do what you wish, of course, but if you do wish to disparage a company with no real opportunity to respond to someone who has presented nothing more than a "nom de plume", that is your business.

Buddy, I outlined my recent (and ongoing) experiences on another thread in the last few days. (questions from sam sugg). If you have found Chesapeake to be wonderful that's good. I, nor my family, have had that experience with them from 2007 to present. I have not found them to be fair and/or honest in their dealings. In reading several different online forums i have noted many others also have concerns/experiences with Chesapeake. If I remember correctly you are a landman or in the oil/gas business and that alone means you get treated differently than i do as a land & mineral owner.

I admit it was in poor taste to say it without support.
Buddy Cotten said:

JMH,

Why don't you explain your snide remarks about Chesapeake? I have had nothing but wonderful dealings with them.

You are free to do what you wish, of course, but if you do wish to disparage a company with no real opportunity to respond to someone who has presented nothing more than a "nom de plume", that is your business.

Best,

Buddy Cotten

Is there any way to get more specific information on a pad site? I'm trying to find out if permits have been approved and when drilling is supposed to start. The latest info on Chesapeake's website is that they've submitted a request for a special use permit and that was back in November.

It's the Pleasant Ridge pad site in Arlington, Texas.

Dear Trey,

Here is the normal course of events.

Staking of a well site and surveying of a 40 acre tract around the wellsite.

Taking the plat developed by the surveyor to the RRC and submitting it along with and application to drill (Form W-1, drilling permit application). That permit is good for 2 years. When the dirt starts to get moved, typically a sign or two is put out identifying the dirt contractor.

Dear JMH,

Unless your posts were deleted, the only comment that I saw was "Chesapeake and others have gotten away with a lot of "stuff" in the Barnett Shale because they improved the tax base in Fort Worth and the surrounding areas."

Nothing so sinister there.

I do get easily further than most people because I am asking for the right department, with my notes and all information that they might need in front of me and and I easily articulate my situation and what I want therm to do about it. Professional courtesy may be part of it, but I don't think so. I think that I am able to save them so much time just because I have my act together when I call.

Look at the posts on this board. As a question of a poster and find out all types of information that was relavant as heck to his initial posting -- but he did not feel it necessary to share that part when he asked his first question.

When I am askin questions to a company, I tend to ask the right question with all the information -- and I understand my rights, so that in itself is a big advantage.

JMH said:

Buddy, I outlined my recent (and ongoing) experiences on another thread in the last few days. (questions from sam sugg). If you have found Chesapeake to be wonderful that's good. I, nor my family, have had that experience with them from 2007 to present. I have not found them to be fair and/or honest in their dealings. In reading several different online forums i have noted many others also have concerns/experiences with Chesapeake. If I remember correctly you are a landman or in the oil/gas business and that alone means you get treated differently than i do as a land & mineral owner.

I admit it was in poor taste to say it without support.
Buddy Cotten said:

JMH,

Why don't you explain your snide remarks about Chesapeake? I have had nothing but wonderful dealings with them.

You are free to do what you wish, of course, but if you do wish to disparage a company with no real opportunity to respond to someone who has presented nothing more than a "nom de plume", that is your business.

Best,

Buddy Cotten

Reply by JMH on March 1, 2011 at 1:36pm
Delete

Trey,

You just mentioned a "new" key player..Chesapeake! If a well has been or is being drilled, call their Division Orders area. You'll be transferred several times until you get to the Analyst responsible for this particular well. You will need the legal description of your property when you call.

I recently had to do this with them on some non-participating royalty interest i own. They told me they (Chesapeake) were holding royalty payments in suspense because they didnt know where to mail the payments. Reality is they were holding payments because they chose too. They had already made surface damage payments to 2 of 3 parties of royalty interest. They had also paid county property tax on their portion of the production assigned to each of the 3 parties. Bottom line is Chesapeake mad NO EFFORT to contact the royalty owners and make payments prior to my call.

They are now suppose to be processing suspended amount and setting up future periodic royalty payments. After 3 weeks i have not heard a word though....



Buddy Cotten said:

Dear JMH,

Unless your posts were deleted, the only comment that I saw was "Chesapeake and others have gotten away with a lot of "stuff" in the Barnett Shale because they improved the tax base in Fort Worth and the surrounding areas."

Nothing so sinister there.

I do get easily further than most people because I am asking for the right department, with my notes and all information that they might need in front of me and and I easily articulate my situation and what I want therm to do about it. Professional courtesy may be part of it, but I don't think so. I think that I am able to save them so much time just because I have my act together when I call.

Look at the posts on this board. As a question of a poster and find out all types of information that was relavant as heck to his initial posting -- but he did not feel it necessary to share that part when he asked his first question.

When I am askin questions to a company, I tend to ask the right question with all the information -- and I understand my rights, so that in itself is a big advantage.

Buddy

www.cottenoilproperties.com

JMH said:

Buddy, I outlined my recent (and ongoing) experiences on another thread in the last few days. (questions from sam sugg). If you have found Chesapeake to be wonderful that's good. I, nor my family, have had that experience with them from 2007 to present. I have not found them to be fair and/or honest in their dealings. In reading several different online forums i have noted many others also have concerns/experiences with Chesapeake. If I remember correctly you are a landman or in the oil/gas business and that alone means you get treated differently than i do as a land & mineral owner.

I admit it was in poor taste to say it without support.
Buddy Cotten said:

JMH,

Why don't you explain your snide remarks about Chesapeake? I have had nothing but wonderful dealings with them.

You are free to do what you wish, of course, but if you do wish to disparage a company with no real opportunity to respond to someone who has presented nothing more than a "nom de plume", that is your business.

Best,

Buddy Cotten

Gentlemen, oil companies are trying to turn a profit. Most will not tell you any more then you request that's why, as Mr. Cotten states, know what you want from them when you call or write them. It's better for their business to work with the land/mineral owners and give them a positive experience. I know they don't always operate that way but be curteous and they might surprise you.

I have a good friend in the business that operates out of Bridgeport/Decatur, TX area. He has parlayed a wealth of knowledge on me from the Oil Companies point of view. One of the key things he says is not to be an ass to the companies. He explained to me that if I didn't deal with them in reference to my 20 acre tract then they would just drill on my neighbors land and still get to my minerals. It makes sense to me. Use the old adage "Kill 'em with kindness" and you'll notice they will likely respond in the same manner.

Mr. Asbery. I have had recent dealings with an o&g co that never honored the draft in consideration for the paid up lease i executed. I didn’t realize that they even recorded the lease till recently. I had thought it had failed for some reason. While working on another issue I found they were drilling my minerals. I called them with every expectation that we would rectify the situation and everything would proceed smoothly from that point on. But no; the third sentence out of their mouths were that the lease was valid even though they had never paid. I told them to verify what I said and we would talk again. When next I spoke with the co it was with the VP for land. He tried the same lie. It didn’t work any better that time than it did before. From that call they sent me a ratification offer and an authorization for expenditure. They also asked if I would speak with the CEO of the company. I agreed to speak to the CEO and over a few calls he made further attempts to lease me. In the end he threatened to go before the industrial commission and petition for a 300% risk penalty, which he cannot get in N.D. I have called the o&g co again since, but only to ask that they release the lease they recorded but never paid for. In the end the o&g co offered 30 times the original bonus per acre and an increase in royalty from 18% to 20%. Sounds like a good deal but they had lied to me several times getting to that point. At no point in our conversations were lies necessary or helpful. I told none. In the end I rejected their offer based on the lies and disrespect. They also blew any chance of leasing my brothers minerals.There are also more minerals in other drilling spacings they will never lease, now. They have finished drilling the second of four wells they intend to drill on my minerals in the one spacing. I have no idea how much profit they have missed due to a lack of common courtesy. I have had dealings with only 1 leasing/o&g co that hasn’t lied or tried some subterfuge and I am watching them closely. Common courtesy costs me nothing, but I won’t try to kill them with kindness.