I recently received the following message regarding some minerals I have available to lease. This is for the deep rights as there is already a pooled unit producing.
"We received cursory title back from our broker and we are not showing any interest owned by you in the SW4 of Section 4, Block 39. The only interest we show is an undivided interest in two separate 4-acre tracts described by metes and bounds, which we would not have an interest in leasing. Our offer was made under the assumption that the interest was undivided across the SW4.”
Very simply, undivided means that you cannot point your pencil at any point in which you would not hold an interest within the SW. So, converse to that, they say they found M&B described tracts in which it is defined as to what you actually own, albeit undivided within 2-4 acre tracts. Being undivided in the entire quarter section would provide access to the entire SW, not just to the 4-acre tracts within the SW4. For clarification, a quarter section, even by definition, is 160 acres. Reply if you need further clarification.
True story, this can get complicated real quick. Did you have a depth severance of any kind in your base lease or was the lease specific to a formation? Either way, if you have a look at your source deeds and/or historical title, you should real quickly be able to determine whether it is undivided as to the entire SW or specific to 2 4-acre tracts contained within the SW. Let me know some specifics and maybe I can do a quick look through. BTW, where is this?
This is Midland County’s 4 block 39 Township 2 South. The lease has the Pugh Clause allowing us to lease different depths but the original Title is very specific on metes and bounds and is not undivided.
I’m beginning to see why we have been approached several times in the last few months with offers that go away!