My father owned 40 nma in a section, but transferred only 35 nma to his Trust. The Trust then signed an Oil & Gas Lease, and a Well was drilled. This is in Oklahoma and about 15 years ago. The Trust was listed under curative in the pooling, but my father was not listed in the pooling. The interest was put into pay without any title requirements mentioned. Several years later, a probate was done which actually transferred the remaining 5 acres into the Trust. Additional wells have also been drilled with no title issues raised.
So does the Lease signed by the Trust actually hold all 40 acres, even though the Trust only owned 35 acres at the time it was signed? Should there still be 5 acres unleased? Or is it dependent upon the language in the lease? Should I even be concerned with this or just forget it? The same circumstance exists with other leases we have.
Is the Trust being paid on the entire 40 acres or only 35 acres?
It’s being paid on the entire 40 acres. There’s really no problem from my standpoint. I just got to wondering if the entire interest was properly under lease. Or if something could possibly come up down the line in regards to it.
It sounds like whoever did the title made an error and put the entire 40 acres in the trust, so the trust is what was leased. It is possible the remaining five acres are unleased still. You’re sure your father never signed a lease? Someone may at some point notice the problem and ask for a lease or a ratification.
There are a few issues here. But, one that can be addressed easily is whether your father died prior to the pooling. Real property must be owned by somebody at all times. The moment an owner dies, the ownership is in his heirs or his devisees under a will, even if the probate was not done at that time.
In a way, the probate is retroactive to prove up that the ownership was in the Trust the exact minute that your father passed away. So, if the Trust signed the ogl, and your father had passed away, then all 40 acres were leased. If not, then there are still other defenses/issues that would suggest that the ogl covers the 5 acres as well. But, they are numerous.
I have this same scenario involving quite a few different leases. In some cases the Trust Lease was signed prior to my father’s death, and in some cases after his death. He did not sign a lease for these individually, as he and I both thought he had transferred all of his interests to his Trust. He had however inherited additional acreage from an Aunt in the same properties he already owned, and didn’t account for the inherited acres when he deeded to the Trust.
There was at least one instance after the probate where I was asked to sign a lease for the Trust, for the same property the Trust had leased to another company several years earlier. That lease stated “This lease covers **** net acres, not previously leased or paid for by lease recorded at Book *** Page *** in ***** County”. So I’m not really sure if the second lease is valid for the additional acreage, or if the first lease holds all the acreage.
Depending on the language of the deed together with death order of your father and aunt, the minerals might or might not be in the trust. Also may need to review the aunt’s probate (if one was done) or trust. Probably fixable either way.
In addition, the oil and gas lease may have “after acquired property” language that might make the additional acres part of the lease. Not common but I do see it occasionally.
I do see the “after acquired rights” language in one of the leases. The others do not have it though. I suppose I shouldn’t even worry about this. The Aunt died first and her probate transferred interests to my father. Then his probate transferred the additional acreage to the Trust. All interests have been paid based on the full acreage. It just seems like technically the acreage that wasn’t in the Trust would not have been held by the Trust Lease. At least those leases signed before he died. But I guess as they say, let sleeping dogs lie. I’m sure I’ll be the first to know if a problem is ever discovered.
This topic was automatically closed after 90 days. New replies are no longer allowed.