Opinions Vary; Mineral Title Ownership

General Mineral Rights Discussion
1

Hey Forum Members,

This is my first post on as a new member in your group. Let me qualify my post, to let you know I am inquiring about a title/mineral rights question in the state of Louisiana. We do have interests, fortunately inherited in Texas, Louisiana, and West Virginia, Haynesville and Marcellus plays. I have become a "quick study" in the ways of leasing and mineral rights over the past 10 years, but, you quickly realize you have just scratched the surface of any expertise knowledge.

On to my most recent O&G dilemma. To set the stage, the companies are all mid-size independents that operate in Texas and Louisiana markets; without mentioning names:

Company "A" leases a 40 acre tract from me (a fractionalized owner, 6.8 acre interest). Company "A" sells their leasehold to Company "B". Lease is held by a producing well in Desoto Parish, Louisiana, and we are paid royalties by Company "B". Company "B" then sells (in 2014) to company "C".

This is where it gets interesting: Company "C" does not send me any new division orders, or acknowledgement that they are the new leaseholders, and makes no payments to us. Upon some investigation with the previous company "B" I am informed who Company "C" is, and contact them. I am informed by company "C" that based upon their title work, that they independently determined, that our rights to the mineral leasehold had been "Prescribed" back in 1936, and cannot be reclaimed, and they owe us nothing. Hear to say, that everyone may not be aware of Louisiana's 10 year, non-use Prescription Laws, where mineral servitudes revert back to surface owners.

Needless to say, I was confused as to how the two prior Oil companies' title work justified them paying me bonus monies, and lease royalties, but, present Company "C" claims, that was their fault, and they have no requirement to payout, because our ownership was apparently interpreted to be forfeited, based upon their title work.

I know, an O&G attorney might be the most common response to resolving my issue, but, any suggestions from any Forum members would be greatly appreciated, that would perhaps provide me an alternate, less expensive route, to further investigate, to prove or disprove, Company "C's" claim of my new status as a non-existent mineral owner. My posts are generally not so long, just trying to provide some specifics here for consideration.

Thanks, Shelby

2

Well said, Shelby. My guess is we’ll be seeing new posts with the same general theme, but with different players and different states/operators. Basically mineral rights owners are dealing with Lessees/0perators with less access to production data and differing interpretations of the owners current mineral ownership, but with few cost-effective ways for owners (original lessors) to justify legal action.

I know many small mineral owners with similar interests who will be following your post.

Good luck!

Nput

3

Thanks for your comments Jim. Basically, you have the David and Goliath syndrome in effect; a small interest mineral owner against an Oil and Gas conglomerate. I do have the benefit of sharing this 40 acre tract with three beneficiaries of my Grandfathers original mineral investment. That at least covers any legal expenditure 3 ways. It would be pretty bad if the legal interpretation of uninterrupted use is not applicable to apply prescriptive forfeiture of my mineral ownership, as claimed, but is only a calculated scheme of the new gas company feinting go ahead and try to sue us. They know the risk benefit is on their side, they have nothing to lose.

Shelby

4

Interesting Reading: https://digitalcommons.law.lsu.edu/cgi/viewcontent.cgi?article=1739&context=lalrev

I wish you luck.

5

Dear Shelby,

To understand what going on, you need to have a clear understanding of the Louisiana Mineral Code. The Mineral Code Statute is located here:

https://law.justia.com/codes/louisiana/2006/21/21.html

This is over many people's heads, but a qualified land man in south Louisiana should be able to figure it out.

I do question Company C's conclusion when two predecessors in working interest ownership reached a different conclusion.

Regards,

Buddy Cotten
6

Buddy,

Buddy, thank you, and others for posting the links pertaining to the Louisiana Mineral codes. It is not what I would consider "light reading" but still very illuminating. It is strange to think about cases, creating legal precedent many decades old now. With the changes in drilling; cross-unit laterals, pooling, and what constitutes "paying quantities" or ongoing, good faith efforts to explore by the O&G companies, it's amazing not a bigger mess than it is presently.

I will probably get the services of a good Northwest Louisiana landman to look into this before it's all over, and even if I find out that I'm right in claim to minerals, I will have the unfortunate option of hiring an Attorney to sue, with no guaranties of a positive outcome, a victory for the Plaintiff.

If it costs 10-30K to sue them, maybe more if I lose and have to pay their in-house legal fees, I am faced with a pretty dangerous gamble, with the potential of losing a lot more money than that 6.8 acres might ever pull in. I know millionaires who take on these type of challenges "win or lose" but, I am just an "old retired guy" and Uncle Sam does not provide me that type of income to play with.

I will notify this company in question, and demand at least that they provide a written termination of the Lease they purchased of which I am party to, and see what they say. Also, I've been advised to request title evidence justifying their claims, but, doubt that I will ever see this, except in a courtroom; "pay to play". Discussing "Oil and Gas" can sometimes be as depressing as talking "Politics" but we still have to do it to try to maintain our rights; at least it can be mentally stimulating.