Mineral Rights Title Dead Search or Mineral Rights Opinion?

In order to identify each individual who owns a portion of mineral rights for a ranch property, and what their proportion of ownership is, should we pay to have a mineral rights title deed search performed, or should we pay to obtain a "mineral rights opinion"? We believe there are 19 people who own a portion of the mineral rights. We would like to know exactly who has a portion and what that proportion is so we can have it legally recorded to update the county records.

Any ideas or suggestions? Any estimate of what each process might cost?

Thanks

Dear Mr. Seaman,

If you have already been approached by a landman, he should have a mineral ownership breakdown already done. You could request a copy from him along with the runsheet. If that is the case, it would not be a bad idea to have the landman's work product verified by a landman or attorney.

As to having your own done, it could be pricey. One really would not know how long it will take until they start working it. It could be 3 days or 30. There is no way to tell from here.

May I add a question to this question? What is the difference between a Title Search and a Title Opinion? Would they be the same thing and does it take an attorney to create a Title Opinion. Wouldn't a Title Company do the Title Search?

Anybody have any answers?

Thanks,

Sharon

Hi Sharon -

From my experience, a title search to determine surface, mineral and royalty ownership would typically be performed by a Landman, who would prepare a Title Runsheet or Runsheets on the tract(s) of land. An Attorney then uses the Title Runsheet(s) in his or her examination of the surface, mineral and royalty title to prepare a Title Opinion.

Again, from my personal experience, a Title Company typically only researches surface ownership and then only from the most recent Title Insurance Certification Date through to the Certification Date of a new one.

Somehwere I read that an average tract of land in America changes hands every 7 years and lien searches are either 10 or 20 years, so that sort of limited research is what a Title Company Abstracter does - at least 99.99% of the time.

If you will review your own title policy, I'm reasonably certain that you will find that it excludes coverage for any mineral or royalty rights.

Surface, Mineral and Royalty research for oil and gas exploration requires researching each tract of land from Sovereignty (Land Grant or Patent) through to the present, which is a good deal more involved than what an Abstracter does. It's also much more expensive and time consuming.

Landmen use the records of a Title Company ("Abstracter's Records" or "Title Plant") only as a place to begin their research. They must then review all of the records of the County Clerk, County Court Clerk and the District Court Clerk (and possibly other offices) by hand in their preparation of a Title Runsheet.

As to Timothy's original question, I have to agree with Buddy:

It would be much more cost effective (free) for you to simply add a clause or provision to the next lease you negotiate requiring that you be supplied with copies of all Title Runsheets, Mineral Ownership Reports and Title Opinons rendered on your land.

Landmen are expensive and the research for a given tract of land can take weeks upon weeks in some parts of the country, depending upon the complexity of the history of the land and the shape of the County and District Records.

Hope this helps!

Charles

Charles Emery Tooke III

Certified Professional Landman

Fort Worth, Texas

fieldlandservices@gmail.com

713-408-2850

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Charles, what an amazingly thorough, concise, and easily understood answer. Thank you so much. It clears up so many things for me.

I recently did sign a lease and included a clause that I would be entitled to receive a "Title Opinion". I asked the Lessee for a copy of the Title Report and was informed that the phrase "Title Opinion" referred to what an attorney would have provided and since they have done their own, costly research, they would not give me a copy of their Title Report. I wish that I had known to include all of the other language that you mentioned, then I could have gotten the title information.

In fact, they said that they were not going to record the lease, but will be recording a "Memo" instead. That part I did not understand completely. Would a recorded "Memo" show up in the county records? In any case, I guess that I am still required to do a Probate in North Dakota, even though I had a previous lease for 5 years and I had inherited the mineral rights 6 years ago.

Thank you, again, for such a clear and thorough answer.

Sharon

Charles Emery Tooke III said:

Hi Sharon -

From my experience, a title search to determine surface, mineral and royalty ownership would typically be performed by a Landman, who would prepare a Title Runsheet or Runsheets on the tract(s) of land. An Attorney then uses the Title Runsheet(s) in his or her examination of the surface, mineral and royalty title to prepare a Title Opinion.

Again, from my personal experience, a Title Company typically only researches surface ownership and then only from the most recent Title Insurance Certification Date through to the Certification Date of a new one.

Somehwere I read that an average tract of land in America changes hands every 7 years and lien searches are either 10 or 20 years, so that sort of limited research is what a Title Company Abstracter does - at least 99.99% of the time.

If you will review your own title policy, I'm reasonably certain that you will find that it excludes coverage for any mineral or royalty rights.

Surface, Mineral and Royalty research for oil and gas exploration requires researching each tract of land from Sovereignty (Land Grant or Patent) through to the present, which is a good deal more involved than what an Abstracter does. It's also much more expensive and time consuming.

Landmen use the records of a Title Company ("Abstracter's Records" or "Title Plant") only as a place to begin their research. They must then review all of the records of the County Clerk, County Court Clerk and the District Court Clerk (and possibly other offices) by hand in their preparation of a Title Runsheet.

As to Timothy's original question, I have to agree with Buddy:

It would be much more cost effective (free) for you to simply add a clause or provision to the next lease you negotiate requiring that you be supplied with copies of all Title Runsheets, Mineral Ownership Reports and Title Opinons rendered on your land.

Landmen are expensive and the research for a given tract of land can take weeks upon weeks in some parts of the country, depending upon the complexity of the history of the land and the shape of the County and District Records.

Hope this helps!

Charles

Charles Emery Tooke III

Certified Professional Landman

Fort Worth, Texas

fieldlandservices@gmail.com

713-408-2850

Ms. Davis, they do record memorandums of lease.

Thanks for answering. Would this memorandum show up in the County Records as soon as they are recorded?

I have an online records subscription for N. Dakota, I'm assuming that all recorded records/memos would show up there the same as what would be in their county paper or computer systems, would this be right?

Sharon

r w kennedy said:

Ms. Davis, they do record memorandums of lease.

I think it can take some time to show up on the NDRIN but I have seen the one for an oil & gas lease my brother executed. It didn’t show up on an o & g lease search, but did when searching for anything in a certain mineral rights legal description. I guess because it isn’t a lease, but merely a memorandum of one. Hope this helps.

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Yes! It helps very much. It gives me a way to search further. Otherwise, I wouldn't have had a clue where to begin.

Thank You. This is all so confusing on so many different levels. I'm grateful for this site. I'm sure many of us Lessors are able to sleep a little better at night.

Sharon

r w kennedy said:

I think it can take some time to show up on the NDRIN but I have seen the one for an oil & gas lease my brother executed. It didn't show up on an o & g lease search, but did when searching for anything in a certain mineral rights legal description. I guess because it isn't a lease, but merely a memorandum of one. Hope this helps.

Thanks so much for all of your comments and input. My understanding is that the title search and runsheet (when completed) are used by a lawyer to create the mineral rights opinion. The mineral rights opinion is provided to the person or company interested in leasing the rights - that becomes their documentation of who owns the rights. The company interested in leasing may also initiate the mineral rights opinion themselves if one doesn't exist, since it is in their best interest.

Again, thanks for your input. It has been helpful. Has anyone written a book that guides you through this whole process? What are you waiting for????!!!!!!

Timm

To further build on Charles' response, if the title search and runsheet has not been completed to document actual ownership, and there are several potential owners of the mineral rights, who among the potential

mineral rights holders has the authority to negotiate a lease that requests a runsheet as part of the lease terms?

In other words, in my case, there are 19 potential owners but a runsheet has not been initiated. Who has the

authority to negotiate a lease, and can it be done by obtaining a power of attorney from each potential owner allowing one member to take the lead? Does it make sense to establish a Mineral Rights Trust with a trustee that would handle lease activities for these 19 people, and what authorization would be required from each of the 19 owners?

Maybe too much on this, but I really appreciate your input, everyone. Timm

To address several issues:

In states like Texas, County Records are organized / indexed by the names of individuals and companies = Grantor (Direct) and Grantee (Indirect or Reverse). In other words Seller to Buyer and Buyer from Seller - can be Lessor to Lessee, Vendor to Vendee, Mortgagor to Mortgagee, etc.

Abstracter's Records (Title Plants) are organized / indexed by property description = Section, Township and Range down to the 1/4 1/4 1/4 Section or so.

Well, except in Texas and I would imagine the original 13 Colonies - their land descriptions are based upon older European style Surveys, so an Abstracter's records are organized accordingly and then, within those, by acreage call.

In many States these Abstracter's style records are kept and maintained in book form and are referred to as "Tract Books". There may even be other names for them.

County offices in Texas do not maintain Abstract Plant style records, only Grantor - Grantee style records. Abstracter style records are maintained by privately owned Title Companies, sometimes several Title Companies maintaining a single, common "Title Plant".

Many States, such as North Dakota, do maintain "Tract Book" style records, which everyone uses - even the Title Companies - as the primary method of researching the records (County Court and District Court and Vital Statistics Records are maintained separately).

They also maintain Grantor - Grantee Indexes, but those are usually considered to be a secondary method of researching the records and frequently only used to find documents that do not contain legal descriptions and that sort of thing.

OK, next:

Every document filed of record will eventually be available for public viewing. There may be some delay in their availability due to the constraints of human endeavor, but eventually they will be there.

Accurately indexing every single document by every single name, Direct and Reverse, and every single legal description they effect can be quite tedious and detailed work. I know this from personal, because I did that type of work for about a year and a half and (a) developed a very high level of respect for the people who work in the County and District Clerk's Offices and (b) never, ever, ever, ever want to do it again.

In Texas, the Abstracters' Title Plants are required by the State Title Insurance Board (whatever it's name is) to be no further behind in their Indexing than 14 days - that may be true for other states as well.

I am not aware of County offices anywhere being required to do anythiing as to their Indexes or Tract Books. I've even had it explained to me that they are not by any law or statute even required to build or maintain Indexes of any kind - that they just do so out of courtesy for the public. You cannot sue a County or District Clerk's Office for any mistakes or inaccuracies in their Records or Indexes.

That stint of Indexing I mentioned above? Most of the time I spent enjoying that little period of my life was spent helping to bring the Public Records of Cook County, Illinois (Chicago) up to date.

When we began the project, they were 5 - 1/2 years out of date... You could have gotten married, bought and paid for a house, had 7.33 children, divorced and remarried several times and even died before any record of it was made available for public viewing.

On to Tim's question about the 19 owners:

Remembering that I am not an Attorney and that if you want more exacting detail you should consult one -

In the scenario you have described, each individual owns their own stand alone interest, as an undivided portion of the entire mineral estate. There may be variations, such as Non-Participating Minerals and Non-Participating Royalties, where those individuals do not possess the Executive Rights, but the total still adds up to 100%.

Those who possess the Executive Rights (think Signature Rights) have the right to negotiate leases and other agreements affecting the land. Typically, that would be each of the individual Mineral Owners and they would each negotiate their own leases (and own terms such as requiring copies of Runsheets, etc.).

Undivided interest owners certainly have the right to negotiate together for equal terms, or to appoint someone to act as their Agent and Attorney-In-Fact or to transfer their individual ownerships to a trust. But I would imagine that would be fairly rare except perhaps in the case of a close knit family.

As to what authorization would be required would depend upon state law, but the right to negotiate Oil, Gas and Mineral Leases, accept funds on behalf of others, execute Pooling Agreements and Royalty Division Orders and that sort of thing at a minimum.

A Title Runsheet will not be prepared until a well is scheduled to be drilled - many times long after the leasing is completed, perhaps even several years.

What you may be thinking of is sometimes known as a Mineral Ownership Report (there are any number of names), which the Landmen handling the leasing for a given prospect prepare by reviewing the same records he or she would in preparing a Title Runsheet, but only with an eye toward mineral ownership. In preparing such a report, the Landman determines who holds the Executive Rights and negotiates the leases with them.

Review of the records to quickly determine Mineral Ownership is imperative in a competitive leasing situation. The "Bells and Whistles" of a Title Runsheet come later.

As to Title Opinions, there will be an Original Title Opinion, perhaps a series of Supplemental Title Opinions as title curative issues such as affidavits and probate matters are addressed and such documentation submitted to the Examining Attorney for review, culminating in a final Division Order Title Opinion setting out the Examining Attorney's final determination of surface, mineral, royalty and leasehold estate ownerships.

Each of these various types of Opinons will be prepared for each mineral tract, but the only one you really need for your records is the final Division Order Title Opinion.

There are classes for this sort of thing, even for Civilians! Try contacting the National Association of Royalty Owners (NARO) - they're bound to have something they can send you or that you can download.

www.naro.org ???

There are other organizations out there as well - just gotta find them.

Many Law Firms that specialize in Oil and Gas matters have papers and information sheets you can download and I would imagine you could Google "Negotiating OIl and Gas Leases" and find lots of information.

Hope this helps -

Charles

Amazing, Charles! Thank you for the complete picture of how ownership is established, I loved all the information that I can so easily understand.

I happen to be a Realtor, so when all this confusion over titles, title companies, who does what, how it happens, why doesn't it happen, why can't a title company just go through their title plant and get me the info, and, ohhh, so many more details that I could not quite put together in my mind, has now been made clear.

I thank you, very sincerly!!

Sharon


Charles Emery Tooke III said:

To address several issues:

In states like Texas, County Records are organized / indexed by the names of individuals and companies = Grantor (Direct) and Grantee (Indirect or Reverse). In other words Seller to Buyer and Buyer from Seller - can be Lessor to Lessee, Vendor to Vendee, Mortgagor to Mortgagee, etc.

Abstracter's Records (Title Plants) are organized / indexed by property description = Section, Township and Range down to the 1/4 1/4 1/4 Section or so.

Well, except in Texas and I would imagine the original 13 Colonies - their land descriptions are based upon older European style Surveys, so an Abstracter's records are organized accordingly and then, within those, by acreage call.

In many States these Abstracter's style records are kept and maintained in book form and are referred to as "Tract Books". There may even be other names for them.

County offices in Texas do not maintain Abstract Plant style records, only Grantor - Grantee style records. Abstracter style records are maintained by privately owned Title Companies, sometimes several Title Companies maintaining a single, common "Title Plant".

Many States, such as North Dakota, do maintain "Tract Book" style records, which everyone uses - even the Title Companies - as the primary method of researching the records (County Court and District Court and Vital Statistics Records are maintained separately).

They also maintain Grantor - Grantee Indexes, but those are usually considered to be a secondary method of researching the records and frequently only used to find documents that do not contain legal descriptions and that sort of thing.

OK, next:

Every document filed of record will eventually be available for public viewing. There may be some delay in their availability due to the constraints of human endeavor, but eventually they will be there.

Accurately indexing every single document by every single name, Direct and Reverse, and every single legal description they effect can be quite tedious and detailed work. I know this from personal, because I did that type of work for about a year and a half and (a) developed a very high level of respect for the people who work in the County and District Clerk's Offices and (b) never, ever, ever, ever want to do it again.

In Texas, the Abstracters' Title Plants are required by the State Title Insurance Board (whatever it's name is) to be no further behind in their Indexing than 14 days - that may be true for other states as well.

I am not aware of County offices anywhere being required to do anythiing as to their Indexes or Tract Books. I've even had it explained to me that they are not by any law or statute even required to build or maintain Indexes of any kind - that they just do so out of courtesy for the public. You cannot sue a County or District Clerk's Office for any mistakes or inaccuracies in their Records or Indexes.

That stint of Indexing I mentioned above? Most of the time I spent enjoying that little period of my life was spent helping to bring the Public Records of Cook County, Illinois (Chicago) up to date.

When we began the project, they were 5 - 1/2 years out of date... You could have gotten married, bought and paid for a house, had 7.33 children, divorced and remarried several times and even died before any record of it was made available for public viewing.

On to Tim's question about the 19 owners:

Remembering that I am not an Attorney and that if you want more exacting detail you should consult one -

In the scenario you have described, each individual owns their own stand alone interest, as an undivided portion of the entire mineral estate. There may be variations, such as Non-Participating Minerals and Non-Participating Royalties, where those individuals do not possess the Executive Rights, but the total still adds up to 100%.

Those who possess the Executive Rights (think Signature Rights) have the right to negotiate leases and other agreements affecting the land. Typically, that would be each of the individual Mineral Owners and they would each negotiate their own leases (and own terms such as requiring copies of Runsheets, etc.).

Undivided interest owners certainly have the right to negotiate together for equal terms, or to appoint someone to act as their Agent and Attorney-In-Fact or to transfer their individual ownerships to a trust. But I would imagine that would be fairly rare except perhaps in the case of a close knit family.

As to what authorization would be required would depend upon state law, but the right to negotiate Oil, Gas and Mineral Leases, accept funds on behalf of others, execute Pooling Agreements and Royalty Division Orders and that sort of thing at a minimum.

A Title Runsheet will not be prepared until a well is scheduled to be drilled - many times long after the leasing is completed, perhaps even several years.

What you may be thinking of is sometimes known as a Mineral Ownership Report (there are any number of names), which the Landmen handling the leasing for a given prospect prepare by reviewing the same records he or she would in preparing a Title Runsheet, but only with an eye toward mineral ownership. In preparing such a report, the Landman determines who holds the Executive Rights and negotiates the leases with them.

Review of the records to quickly determine Mineral Ownership is imperative in a competitive leasing situation. The "Bells and Whistles" of a Title Runsheet come later.

As to Title Opinions, there will be an Original Title Opinion, perhaps a series of Supplemental Title Opinions as title curative issues such as affidavits and probate matters are addressed and such documentation submitted to the Examining Attorney for review, culminating in a final Division Order Title Opinion setting out the Examining Attorney's final determination of surface, mineral, royalty and leasehold estate ownerships.

Each of these various types of Opinons will be prepared for each mineral tract, but the only one you really need for your records is the final Division Order Title Opinion.

There are classes for this sort of thing, even for Civilians! Try contacting the National Association of Royalty Owners (NARO) - they're bound to have something they can send you or that you can download.

www.naro.org ???

There are other organizations out there as well - just gotta find them.

Many Law Firms that specialize in Oil and Gas matters have papers and information sheets you can download and I would imagine you could Google "Negotiating OIl and Gas Leases" and find lots of information.

Hope this helps -

Charles

1 Like

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