Sect. 17, T23N,R1E........It is my understanding that this section 17 is part of a
mineral servitude acquired by Exxon from Humble which was established back in
the 30s or 40s and encompasses some 22,000 acres. Exxon, by drilling one well
(dry or producing) on any part of the 22000 acres , in each 10 year prescriptive
period , since the entire acreage was declared one unit, can maintain ownership
of these minerals indefinitely. This is Union Parish and Louisiana Mineral Code.
Does anyone know if this is acccurate. It seems to be a devious maneuver by the
oil company to take advantage of laymen mineral owners. Could this be challenged
in a class action suit by the by the landowners of the 22,000 acres?
Jim, I be this servitude has been broken in some of the sections somewhere in time. Focus on your section. You just have to find it. Is it all raw land? Any subdivisions in this area? Cutting a major road through an area will sometimes break the servitude. Get your list of LA mineral codes and start researching. If it overwhelms you, then hire an experienced oil & gas attorney or an experienced landman and search to see if a servitude was broken.
Incorrect. Any new subdivision or road has no effect on an existing servitude. I'm sorry but "Getting your list of LA mineral codes and start researching" is very dangerous advice. Hire a crackerjack landman or oil/gas attorney. Louisiana mineral servitudes... there aren't even that many landmen that can get it right. It can be EXTREMELY complicated... it's not work for a layman.
I would have to be hard up for work to take on a project like that. It is probably some well known servitude so it would be waste of time anyway.
Hale, a lot of people hired attorneys during the heyday of the Haynesville. I personally know 3 parties not including myself ( and I have hired attorneys on 2 different tracts) who hired 3 different attorney groups. In the 3 above cases, those parties are still unleased. Three different groups of attorneys were negotiating on 3 different lg. tracts of land. They negotiated the mineral owners out of leases. All are unleased as of today. In one case that really touched me, a couple who were very poor and had worked hard all of their lives were going to become very wealthy. They would have been happy with $10000 an ac. but on advice from their attorney, they held out for $20k an acre. They didn't get it. The husband is now dead & she is still working 50+ hours a week at age 70.
In my personal case, I have hired 2 different groups to do mineral titles. In both cases, my attorneys were wrong about the titles (at lease that is what the oil & gas attorneys representing the companies wanting to lease gave as their opinion). The attorneys who did those mineral titles called it an OPINION of course and they got paid very well for their opinion. For the past 2 yrs. I have run my own titles and my own mineral histories. If I am wrong, at least I haven't paid someone to make a mistake. One other thing, I did put a caveat in my post to get an oil & gas attorney (unfortunately a lot of attorneys these days who are slow in business call themselves o&g attorneys when really they don't know anymore about o&g than most people on the street); or hire a good landman.
I didn't mean to offend you, I should've softened my comment a bit. Suffice to say, I think maybe you have hired the wrong attorneys. It is rare for a top notch oil and gas attorney to make a mistake. A top notch landman beats a mediocre attorney any day but a top notch OIL AND GAS attorney can be even better. Of course, they charge bigtime money. A layman running title on Louisiana properties (or any state for that matter) is dicey; you may be an exception but I'd be very careful and seek expert help when making a monetary decision. Louisiana servitudes can be nightmares!
As for hiring attorneys and have them give "hold out" advice, I don't know what that has to do with this thread but I could not agree more. I have seen attorneys cost people a FORTUNE, advising them to hold out. This website's members, including "experts" were notorious during the Haynesville hay day for advising people to hold out. We still have "experts" on here giving dangerous advice, IMO. The oil biz is fickle. An offer today can disappear tomorrow. And... everything has a price. For instance, to think "never sell minerals"... that is also foolish advice. I have seen people turn down FORTUNES because of the "never sell minerals" nonsense. I've won, I've lost, with minerals I own, but you can bet, if the price is right, I'll sell. How much money does one need? I have stories that will make you sick!
I am familiar with some of Exxons servitudes in that area. Most are quite large, and more importantly are single servitudes.
On what basis would you challenge the servitude? The mineral code is quite clear, that prescription is interupted in very specific ways. Exxon is very careful to insure that they maintain their servitude by drilling wells to interupt prescription. I think a legal challenge is a long shot, if even impossible as Exxon has done what it legaly must do to maintain the servitude.
" It seems to be a devious maneuver by the oil company to take advantage of laymen mineral owners"
No... Exxon is the mineral owner. They are protecting an investment they paid for a long time ago.
"Exxon, by drilling one well (dry or producing) on any part of the 22000 acres , in each 10 year prescriptive period , since the entire acreage was declared one unit, can maintain ownership of these minerals indefinitely. "
Its not a unit, but one contigous servitude.
You are simply replacing one word for another.
I am neither a landman nor an attorney, therefore I do not know what basis to
challenge the La. Mineral Code. Actually, it is my belief that a landman is not
qualified to advise one way or the other. I do see that your opinion favors the
oil companies rather than we layman.
Are you aware of a lawsuit filed by Plum Creek vs. Exxon concerning a large
mineral servitude in Union Parish.......filed July 2011.
Thank you for your input!
It is likely that a large mineral servitude such as this has been maintained in just such a manner over the years. Oil and gas companies have frequently bought contiguous mineral blocks as well as surface and mineral blocks of acreage in prospective and productive acreage in order to explore and produce on a long-term basis (these blocks are sometimes known as fee lands [ie. "fee title"] where the oil and gas company held both surface and mineral title at one time).
While I can't speak specifically as to this potential large mineral servitude, owners of such servitudes are generally very much aware of their existence and the obligations required to maintain them for as long as possible. Where surface was sold in such areas, typically the title can be traced back to an entity which was conveyed a larger block of acreage, subject to a single large mineral reservation, creating the servitude. Thus the entity that then "owns" the surface can sell off the property piecewise and will not create multiple servitudes from each particular sale.
In this scenario, typically the rights sold reserved not only the mineral rights, but also the right to use a reasonable amount of surface to explore for minerals. These rights exist as a continuing encumbrance on the property; so long as as the mineral servitude is maintained and a lessee or operator does not use what would be considered an unreasonable amount of surface acreage to conduct mineral operations and operate outside of statutory minimum distances from habitable structures, there is very little that the surface owner can do to impede development.
This type of development is not limited to oil and gas companies. Large timber companies and institutional land holders (banks, manufacturers, etc.) and their successors that have aggregated large amounts of land over the years have also engaged in such activities.
Unlike a lease (which can and has from time to time) been dissolved or partially dissolved on the basis of non-development or a lack of full development, there is virtually nothing that stands in the way of such an owner maintaining such servitudes as long as they employ the methods available to them under the current mineral code. A single producing well, or a timely spudded well commenced on the mineral servitude (note here: the acreage does not need to be unitized in any part for this to occur) pursued in good faith to a reasonable or stated depth with the expectancy of obtaining production in paying quantities, whether same produces or not, is enough to interrupt the entire mineral servitude.
Moreover, depending upon the terms of the conveyance that created the servitude, it may even be possible to hold the entire servitude by a well located off of the servitude proper, but embraces a portion of the servitude as part of a unit (see R.S. 31:75 for example).
Any challenge by a non-owner or surface owner is likely to fall flat. Pleas as to "fairness" are a nonstarter. To have any chance of success, such challenges would almost certainly revolve around a dispute as to whether the drilling of a certain well or well(s) purported to maintain such a servitude meets the burdens and obligations implied by good-faith, use, the intent of obtaining production, and in paying quantities. These challenges become quite technical in nature and involve concepts that are in many cases ultimately the subject to judicial determination, case-by-case; thus suits can prove to be quite burdensome to the challenger(s) (plaintiff(s)).
I say all of the above to caution you to this: not only would such a project require in-depth research by a qualified individual, the research would be just the beginning in mounting what would have to be a long-road legal challenge (and, IANAL). So even the research would first have to be vetted in the eye of an attorney, who would agree to take the case, and subject to further research and review before you would even have an answer as to just cause to file. These types of disputes make even the most "deep-pocket" corporate challengers shudder and wince.
Thank you for the info.
I believe Plum Creek tested the La. Mineral Code by filing law suit vs. Exxon
in July of 2011 ......Plum Creek lost on the issue of Exxon Mineral servitude
involving about 12000 acres in Union Parish.
Jim, do you know if they appealed?
I do not know if they appealed......a good question. I am considering going
to the courthouse in Farmerville to see if I can look up this case. The docket
#40737. It is my understanding that Exxon was required to provide a map
and listing of their servitudes in the discovery portion of the case. I do not
know if discovery info would be included in public record of this case.