I am in the process of buying home. The title company listed an oil and gas lease on the property. I looked up the lessee and their company is dissolved. Is this lease still valid? Where can I get information on how to remove this lease? How do I know what the current status of the lease is?
Is there active production in the immediate area / neighborhood?
What year was the lease recorded? There is still a lot of production in the Long Beach / Signal Hill areas as well as other parts of Los Angeles County. That being said, I’ve also seen where title companies will list oil and gas leases from decades ago in a title report simply because there was never a release filed on that particular lease. So it is possible that there is active production, and also possible that it is simply an old lease that just never got formally released (though it likely has expired by the terms of the lease).
You could ask the title company for a copy of the lease, as well check the oil and gas GIS maps on CalGEM to see if there any active wells in your neighborhood.
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If you can provide the recording information of the lease I will be able to tell you if the lease is active or not and should or shouldn’t be removed from title.
Thank you for your help and responses, understanding the terminology is difficult. I do have a copy of the lease. Here is some of the info on the lease: Subsurface oil and gas lease 3306 Lease No- 1083 Date: June 9, 1968 BK : M2929 PG 543 Lessee: R.K. Summy Inc
I reached out to the title company asking if I would become the owner of the mineral rights and therefore the new lessor. Their response seems to say this isn’t something I need to worry and it’s not a big deal there is a current lease on the property. I may be understanding it all incorrectly but I thought when you buy a land this is part of the transaction. Does this have to be stipulated one the purchase contract or is it just assumed the rights are transferred to me? This was their response:
Mineral rights are not part of the transaction, they are excluded as they are under a current lease until 2067. There can be no surface drilling, ie. no ability for lease to come onto property . If these dormant oil reserves were to be activated, they must drill from adjacent properties and below 550 ft . No applicable or problem for your buyer.
Gwen: The question you need answered is, were mineral rights severed prior to the current owner’s purchase? Mineral rights can be severed from the surface ownership.
Thus, one person owns the mineral rights and another owns the surface. So, if the mineral rights were severed prior to the current owner’s purchase, then the current owner cannot transfer minerals rights to you, since the current owner has none. It sounds like the title company has confirmed that the mineral rights are not owned by the current owner and therefore you will not be obtaining such rights upon your purchase. If the current owner DOES own the mineral rights, however, then the current owner will either explicitly state that the current owner is reserving the mineral rights or you will own them.
Hope this helps. Jean
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Thank you this really hits the jackpot on my question. If the current seller is unaware is that something I need to worry about prior to closing. I did ask title company but I am afraid they are not aware if the mineral rights were separated. How would I go about looking something like this?
Because escrow / title companies rarely deal with mineral interests and likely won’t confirm whether the mineral interests are included in the sale, you might want to hire a landman (which is a professional knowledgeable in mineral titles) to review the title history. There are many good ones on this site so you should be able to find someone to help. Good luck!
Check the directories list above for professionals. If the mineral deeds were separated, there should be a deed in the county courthouse which documents it. The lease is also filed there.
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