Land bought Deceptively

Law & Legal
1

I had an old farmhouse on 37.44 acres that I bought in 2007. My new wife got pregnant and the house was in need of repairs so we put it on the market. I had 1/2 mineral rights and 75% executive rights, which really was Greek to me since this was my first home. I had it listed for $168,000—I paid $145,000. In April 2010 a company named EFS Property 1, LLC wanted to buy it, but only if they could have my mineral rights. They only wanted to offer me $150,000 because they said the soil might be contaminated from old gas and oil activity. I had no knowledge at the time that oil companies were wanting to lease land in that area. My wife and I had already moved to LaVernia a few months prior to that. I counter offered with $160,000 and they accepted. Now I learn that they (EFS Property 1 LLC) turned right around and leased it out to Texas Crude Energy and they have torn down the farmhouse and put a rig right there. This company sent me a Use and Possession Affidavit to sign this past April. I have yet to sign it.

About 3 weeks after I sold the property (May 2010) I started getting all these offers from several companies to lease my property. I feel kind of used since this company had prior knowledge about what was happening out there. I was curious if this happened to anyone else,

and if there is any kind of legal steps I can take to maybe at least get my mineral rights back?

2

Arthur:

If this company purchased this property with the mineral rights included and all paperwork addressed these matters, I would say that there is no legal action that can be taken. Your lack of information regarding the future of these minerals would not stipulate any type of reversal action. This has happened many times over the past several years (that I am aware) and mainly involves mineral purchases only and not the surface.

3

Dear Arthur,

Absence of fraud or coercion, the law does not protect you for making a bad deal.

4

Arthur -

You really need to consult an experienced Oil and Gas Attorney about this (I am a Landman, not an Attorney).

No one on the Mineral Rights Forum ever thinks to mention what State their properties are in. But if the subject lands are in Texas and you are reasonably certain you can prove that the company that purchased your land had substantially greater knowledge of the true potential value of the land and minerals and failed to disclose that information to you, it is my understanding that, yes, you may possibly regain your properties or at least a substantial cash settlement.

Several years ago there was a Land Services Company out of Houston that had a shadow group of mineral and royalty buyers buying interests under the prospect areas they were hired by their client companies to lease in.

This is not acceptable to any client company, by the way, and was probably in violation of the terms of their land services contract.

Nevertheless, one Landowner sued after a fairly substantial well came in on the land he had sold his minerals under and won a Judgment of something like $7,000,000.00.

Judges and Juries tend to side with the innocent landowner against the big, bad companies. And I would tend towards the more rural the County, the better for the innocent landowner.

I believe he was able to prove that the “Outriders” buying the minerals and royalties had access to the client company’s geological information of the area or something like that (which would have also be in violation of their land services contract).

Several things to take into consideration:

There may be a statute of limitations issue here to consider. From your message, it appears that it has been over a year since they purchased your land and mineral rights;

You may need to be able to afford giving them their money back; and

You may need to be able to afford what might turn out to be a lengthy lawsuit, unless you can locate an Attorney willing to take on the case on a contingency basis of some sort.

If you haven’t missed any statute of limitations deadline and you can find an Attorney that you think can win, even then it might be best to wait until production is established on the property before you file.

If they drill a 20,000 foot dry hole, you’d only end up with some huge legal bill over a fight that maybe wasn’t worth fighting.

Hope this helps -

Charles

5

Arthur, if this land is in Texas, the Contract is valid. You made an offer and it was accepted. In Texas an “offer and acceptance” makes a contract valid.

But, if the property is not in Texas and you are serious about pursuing this issue, then a real estate attorney should be your source for advice.

My question: Does getting married make a person do crazy things like sell their mineral rights? If the answer is “yes,” then I’m staying single.

Thank you. Pat

6

I like the idea of waiting until after the well is drilled to see if they hit pay dirt.

That way - if they gambled and had a dry hole, you can laugh all the way to your money in the bank.

But if they gambled - paying for the land and costs of drilling - and had a successful well, you sue to get your minerals back.

7

The real question is if you wanted the minerals, why did you not reserve them? It seems that you ended up with the position that you bargained for.

8

I was being facetious…

I understand you once worked for Shell.

One year I got a notice for tax purposes that they had paid me $X.

I called to say they paid me nothing.

They told me they had bought it under someone else’s name. (maybe it was you)

I believe it was in Milam County on land they thought had uranium.

Anyway, can you believe this guy wants to claim deception & I didn’t even consider it so

9

Mr. Edwards,

Do you want to sell your property? Is it listed with an agent? If the answer is no to either, you have a complete monopoly on your land.

They cannot force you to take an offer you don’t want.

Step back, take a look at the situation and decide what your true goals are.

10

Buddy -

Like the prior post we also have 10 acres bound by a Texas Interstate, Hwy 90 & a FM road.

The guy we bought the 10 acres from had purchased it in 2 tracts - 9.5 acres & 0.5 acres.

The 0.5 acres was purchased about 35 years ago with the 6 sellers reserving half the minerals.

I have reason to believe there may now be about 35-50 owners, some of whom may be unlocatable, on that half mineral interest in the 0.5 acres.

Even though we bought the 10 acres, can the oil company just lease the 9.5 & forget about the rest?

Buddy Cotten said:

Mr. Edwards,

Do you want to sell your property? Is it listed with an agent? If the answer is no to either, you have a complete monopoly on your land.

They cannot force you to take an offer you don’t want.

Step back, take a look at the situation and decide what your true goals are.

Best of luck,

Buddy Cotten Mineral Management