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Energy & the Law

Category Archives: Land Titles

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The Parol Evidence Rule at Work in a Mineral Transaction

Posted in Contract Disputes, Land Titles, Title Issues

A phrase currently in common usage begins with “‘cluster” and ends with a vulgarity that has been around for centuries. Saheid v. Kennedy presents facts that pretty much exemplify the meaning of the phrase: While living in England, start out to buy a hotel in New Orleans, have no experience in Louisiana mineral transactions, when the… Continue Reading

The Constructive Notice Doctrine in Action

Posted in Land Titles, Title Issues

Today’s “pay attention” edition begins with a quiz. What is the most important thing to read carefully: a. Speed limit sign in small-town (insert name of Southern state). b. Itinerary for that dream vacation, the one with multiple layovers of varying durations in airports and time zones far from your own. c. Title documents to which you affix… Continue Reading

Your Louisiana Override – Where Does it Come From?

Posted in Land Titles, Royalty Disputes

It’s a multiple choice question: a.  The royalty interest reserved by the lessor. b. The drillbit, courtesy of fearless, risk-taking entrepreneurs, the backbone of the great American free enterprise system and the sworn enemies of collectivism. c.  A cache of DNC emails, discovered by Vladimir Putin himself. d.  The working interest. e. It doesn’t matter. Trump won. Get over it. Can’t… Continue Reading

The Rule Against Perpetuities is Alive and Enforceable in Oklahoma

Posted in Contract Disputes, Land Titles

Today we venture into Oklahoma, to be instructed on the Supreme  Court’s treatment of the Rule Against Perpetuities. First, the Rule: No property interest is good unless it must vest, if all, not later than 21 years after some life in being at the creation of the interest. In American Natural Resources LLC v. Eagle Rock Energy Partners LP,… Continue Reading

Operator – Don’t Get Burned by Paying an Insolvent Contractor

Posted in Land Titles, operations, Title Issues

MEMORANDUM From: Legal Department To: Accounts Payable Re: What we learned from Shell Western E&P, Inc. v. Pel-State Bulk Plant, LLC ________________________________________________________________________ Just received notice of a Texas subcontractor’s mineral lien? DO NOT continue to pay the contractor. He hasn’t paid the subcontractor. Think you owe nothing on the well on which the lien will… Continue Reading

Assigning By “Stratigraphic Equivalent”? Be Careful

Posted in Contract Disputes, Land Titles, Purchase and Sale Agreements

Co-author Brooke Sizer How many of your mineral conveyances are described like this: … all of Sellers’ right, title and interest in and to (a) the oil, gas and other minerals in, to and under the lands … ONLY INSOFAR as such oil, gas and other minerals are located below that depth which is the stratigraphic equivalent… Continue Reading

Louisiana Partition Agreement: You Can’t Trade What You Don’t Own

Posted in Land Titles, Title Issues

Square Mile Energy LLC v. Pommier considered this language in a Louisiana partition agreement: “N.B: Included in this transfer are any and all mineral rights, when available, to Roxanne and all surface rights.” Did this language include an interest in a mineral servitude inherited by Paul as co-owner with his siblings? To answer the question, a few… Continue Reading

Neither a Will Nor a Gift Deed?

Posted in Land Titles, Title Issues

This narrative about a daughter gone bad is for title examiners, landmen and moralists. Business development persons, skip straight to the lesson. The background Elvira owned a home and lived with Johnny. Elvira and Johnny were named managing conservators for her three grandchildren after a daughter died. The grandchildren lived at the house. Elvira and Johnny signed… Continue Reading

What Happens to a Bundled Production Payment When a Lease Terminates?

Posted in Land Titles, Royalty Disputes, Title Issues

Must a production payment out of four oil and gas leases be proportionately reduced if two of the leases expire because production ceased? In Apache Deepwater, LLC v. McDaniel Partners, Ltd., the Texas Supreme Court says yes. Absent express language in the assignment to the contrary, this general rule applies:  When an assigned lease terminates,… Continue Reading

Texas Property Code Change – No More Subordinations?

Posted in Land Titles, Lease Disputes, Title Issues

Special thanks to Gray Reed colleagues Paul Yale and Dominic Salinas for this post. Weary of having to solicit those pesky subordinations of pre-existing mortgages to your recently-acquired oil and gas leases? Tired of chasing down the third assistant to the fourth vice president for loan servicing just to obtain one simple document? The 2015… Continue Reading

You Own the Oil. Do You Own the Rock?

Posted in Land Titles, operations

Riddle: What’s the difference between a hydrocarbon molecule and the underground structure which the molecule inhabits? Answer: In Texas, you can own one and not the other, according to Lightning Oil Co. v. Anadarko E&P Onshore LLC. Dueling Estates This was a subsurface trespass case between lessees on two adjacent mineral estates. The Cutlass lease, owned by Lightning, is a severed… Continue Reading

The Danger of “Too Much Information”?

Posted in Land Titles, Title Issues

I know contract writers who like to state terms, such as property descriptions, several different ways. If you just have to over-describe, at least be careful, and at least be sure the descriptions are consistent. The McGregors and Millican were adjacent landowners fighting over a 34.28 acre wooded tract in Brazos County, Texas. The question:  Was the acreage in Millican’s chain of title. The answer: “No”. A 1945 deed… Continue Reading

Faulty Property Description Haunts Louisiana Servitude

Posted in Land Titles, Royalty Disputes, Title Issues

Co-author Brooke Sizer Halloween is approaching, so let’s talk poltergeists – troublesome spirits that haunt a specific location. Where do they come from? In Quality Environmental Processes, Inc. v I.P. Petroleum Company, Inc., it was from a faulty property description that lay dormant for 30 years before beginning its vexations. The Demon is Spawned A 1966 mineral deed… Continue Reading

Easements: Roads Traveled, Less Traveled, and Not Traveled

Posted in Land Titles, Title Issues

Why would anyone buy property without access to a public road? Because it seemed like a good idea at the time, I guess. And often it is, until things change, “things” often being new and unfriendly ownership of the surrounding property. The Texas Supreme Court has addressed this situation.  Hamrick v. Ward clarified the law for two different kinds of implied… Continue Reading