Previous owner of the property entered into an O&G lease that is currenty HBP from a pooled unit.
My land is not the drillsite.
As the new owner, I am entitled to my proportionate share of production from the pooled unit.
The question is, I did not enter an agreement with the company that leased from the previous owner. No mention of the lease was made by title company seller at time of purchase. I found out about being included in the unit from another owner.
Am I now subject to the original lease or do I have a right to enter into my own lease now that I'm the owner?
I don't want to make the exploration company mad and have them cut me out of unit due to non-cooperation on my part.
Thanks
The land and you as owner are still subject to the lease. You really should have been informed of the lease by the title company.
You are subject to the lease signed by the previous owner as long as that lease has production. If you are in Texas, the lease, as well as other old leases and easements, etc., that you are under should have been listed on Schedule C, I believe, of the Title Commitment.
If the lease you bought under is past its primary term, then the Title Company would not know it was still in effect. Most Title Companies ask if you have any questions regarding Schedule C but really have no obligation to go into detail.
Entitlement to royalties from production assumes that the mineral rights passed to you when you purchased the property. Are you positive that you received the minerals?
Actually, even more complicated. The original lessor executed and filed of record an affidavit of non-production even though the lease was included in the continually producing unit prior to him selling it. He signed it when he sold to the guy that bought the land prior to my family buying it. The guy between the original lessor and my family did not receive any royalties and neither has my family. We are in the process of getting the royalties paid to us by the current operator, rather than the original lessee. The guy between the original owner and my family only had the property for one year. My family has now had it for 5 years. The minerals or definitely owned by my family.
Who made the mistake when he filed the affidavit of non-production and stated the lease had expired by its own terms? It looks like to me the title company required that it be filed prior to the sale to the owner prior to my family. Clear as mud!
Even more interesting is there was seismic shot over our land several years ago. The company shooting the seismic said they were sure we owned the minerals. If it was the current operator, they should have acted upon changing who they were paying. My next move is figuring out who shot the seismic, my mom is looking for the paperwork she signed.
The affidavit of non-production really has nothing to do with who owns the minerals. Title companies do require them to be filed occasionally for exchanging properties. Minerals are never covered by title policies most if not all states. They would be doing a favor if they even mention a lease on the exceptions page anymore (we always did even if the lease might be expired or null). If the minerals truly passed to you, I would be contacting the current operator to find out about royalties in suspense. It is normally the mineral owners responsibility to make sure when they acquire producing mineral rights, to notify the operator so that the ownership is updated and any royalties will be paid correctly.
I've talked to the current operator. They have continued to pay the original lessor to date. Can't blame them if no one ever told them the minerals had changed hands. Since the minerals were pooled, we had no idea they were producing until a couple of months ago. If we want past royalties, it looks like we need to get them from the original owner. Probably not worth the effort until I sit down and figure out what the $$$ may be using RRC prod and estimated prices during the time period.
You are correct. If you are interested in recovering past royalties, and the amount is less than $10,000, in Texas you could seek action through Small Claims Court (with or without an Attorney). Sounds like you got the ball rolling (on future royalties) though by communicating with the operator!
To make matters worse, the land appears to be just outside of the oil window in Washington County. Can't win 'em all! :-)
As long as you are in a pool they should be paying you even if the production is from other tracts.
You will need to send a copy of the Deed from whomever you purchased the property from as well as a copy of his Deed from the originial Lessor. Be sure to send these Certified Mail for proof
Your best recourse to recoop any royalties is thru tje JP court where the property is located. Your suit would be against the originial Lessor but before I would file suit, contact them to see if they will pay you the back royalties. In JP court you do not need a lawyer, just get the paperwork from the clerk of the court.