Can seismic tests or drilling exploratory well be done when property owner is deceased, & property owner has 50% mineral rights deed?

Law & Legal
1

I live on 20 acres of NW Elbert County, CO; my mother-in-law owns (owned) this property, but she passed away in 2010). Tthere are two surviving sons , but one of them, my husband, also passed away Jan.2012; now, the remaining son, my brother-in-law, has not finalized his mother's estate, no papers have been filed notifying her death, nor has an estate been filed and an estate will not be completed. My mother-in-law has 50% mineral rights & a mineral deed. My question: a seismic co. on behalf of Chespeake Energy will conduct seismic testing directly east of our land, and as well, want to conduct testing on our land as well. In the event the tests prove worthy of exploratory drilling, can Chespeake continue testing and/or try to drill on our 20 acrea? or could a directional drill be completed from the land east of us, into our formations? Since the estate of my mother-in-law is an "open book" and not finalized, can an energy company legally conduct testing or drilling?

2

Patricia, I'm not an attorney so take this for what it's worth. Bottom line, if there is nearby activity it would be best to get the estate work done. You may find an attorney willing to do both of them jointly. Now to answer your questions, I believe the following applies;

1. Chesapeake (CHK) can do seismic work only where they have written permission to do so.

So they can't do it on your property unless an estate's executor (or surface owner) allows it in writing.

2. Though your 20 gross acres of minerals can be pooled with other lands even without your permission. This means for the purpose of developing the minerals, your 20 acres are combined with the rest of the section (the remaining 620 acres). Though they can't drill on your land without trying to get your written approval as surface owner and pay you damages.

3. Yet it is possible CHK could still drill under your property via a horizontal well on neighboring property. If they did they would need to attempt to lease the minerals under you. Though since their is no estate or executor yet they could say "it wasn't possible to lease them."

4. However even without having a lease on 'your' minerals, if they drilled under you, they would have to set aside your proportional share of any proceeds from oil & gas sold. Those funds would be held until your M-in-law's and husband's estates were finally settled.

3

Thank you very much for your reply, I have a much better understanding now of the direction we need to go. I did talk to an attorney yesterday, and he suggested as well, to try and get the estate finalized. He also commented that we may as well let CHK do seismic testing and see what the results are, if we are allowed to get the results. The tests should indicate if any exploratory drilling may occur in the near future. Several counties along the front range have seen an increase of O&G leases being filed in various county offices due to the Niobrara play in our area, and energy co's are trying to determine how far south this play may/may not exist, therefore the interest in NW Elbert County, Co. Again, thank you for the wonderful info, it is so appreciated.

4

Hi Patricia -

I am sorry to hear of your recent loss. I am certain that all of ours' prayers are with you.

I am also not an Attorney. For the sake of full disclosure, I am a Certified Professional Landman and occasionally offer up what little information or advice I might be able to provide here on the Forum.

It is always best for me to suggest that you contact an Attorney regarding your questions, so I do so. Most will allow an initial conversation / consultation free of costs.

You mentioned that your Mother-In-Law had a 50% mineral interest, indicating that it was deeded to her, and that her Will had not yet been submitted for probate. Do you have a copy of her Will or have you read it? Who does she leave the mineral interests to?

Also, you refer to the land as "our land". Is this to indicate that your husband left you his share of the mineral rights in his Will and that you and your Brother-In-Law are now the owners of the subject mineral rights?

The reason I ask is that to the best of my knowledge it is not typical that inherited properties automatically pass down to surviving Spouses. Surviving Children, yes. Surviving Spouses, not typically.

Your husband would have had to specifically leave you the mineral interests, inherited by him from his Mother, even if only covered under what is referred to as a "rest and residue" provision in his Will.

They can't lay seismic cables across your land without permission. If they were to lay seismic cables across your neighbor's land and in the course of their seismic research the resulting computer image "bleeds over" under the fence line and shows something about your land, it is my understanding that they cannot research that portion of the image. It's referred to as Mineral Trespass or something similar. You should be able to Google it.

Some States require a certain percentage of participation from the interest owners (a certain percentage of the Mineral Owners in a given tract must sign Seismic Permits), but none that I am aware of presently require 100%. Louisiana tried that and it was a resounding failure.

In other words, the other 50% Interest Owners, or even an Owner of a single 1%, might sign a Seismic Permit, thus allowing the company to include your lands / interests in their research without ever contacting your Brother-In-Law or you.

If you own the surface, you will be reimbursed for damages. Settlements of that sort are typically settled before the Shoot. In a situation like yours, where neither of the subject Wills have been submitted for probate, the seismic company may just have every possible heir sign a Settlement Agreement and cut them all or each a check.

Eastern MT is correct that you can be included in a unit without your title being clear or whether or not you are leased - they pool the land, not the mineral interests.

But since you know they are coming, I assume they must know where you are as well. If and when the Seismic Company or any subsequent Oil and Gas Company reach a point to where they are required to obtain signatures from whomever, they will contact you.

Hope this helps -

Charles

5

Charles, thank you so very much for your kind words and prayers regarding the loss of my husband, it has been difficult these past 7 months now. I have been researching every angle of our situation, contacted an O&G attorney, but he was not much help, but it was worth a shot. The will left by my mother-in-law didn't specify who mineral rights will be given to- her will was hand-written and just divided everything "in half" to both sons'. I intend to visit our county offices again to determine where/who owns the other "50%", or how it is/was broken up yrs. ago.

My husband didn't specify mineral interests either, so our son will probably be the next in line, as he wants to keep the property and eventually live here after he graduates from college next Dec.

Thank you again for the needed information, I really appreciate your help, and yes, it does help.

Patricia

Charles Emery Tooke III said:

Hi Patricia -

I am sorry to hear of your recent loss. I am certain that all of ours' prayers are with you.

I am also not an Attorney. For the sake of full disclosure, I am a Certified Professional Landman and occasionally offer up what little information or advice I might be able to provide here on the Forum.

It is always best for me to suggest that you contact an Attorney regarding your questions, so I do so. Most will allow an initial conversation / consultation free of costs.

You mentioned that your Mother-In-Law had a 50% mineral interest, indicating that it was deeded to her, and that her Will had not yet been submitted for probate. Do you have a copy of her Will or have you read it? Who does she leave the mineral interests to?

Also, you refer to the land as "our land". Is this to indicate that your husband left you his share of the mineral rights in his Will and that you and your Brother-In-Law are now the owners of the subject mineral rights?

The reason I ask is that to the best of my knowledge it is not typical that inherited properties automatically pass down to surviving Spouses. Surviving Children, yes. Surviving Spouses, not typically.

Your husband would have had to specifically leave you the mineral interests, inherited by him from his Mother, even if only covered under what is referred to as a "rest and residue" provision in his Will.

They can't lay seismic cables across your land without permission. If they were to lay seismic cables across your neighbor's land and in the course of their seismic research the resulting computer image "bleeds over" under the fence line and shows something about your land, it is my understanding that they cannot research that portion of the image. It's referred to as Mineral Trespass or something similar. You should be able to Google it.

Some States require a certain percentage of participation from the interest owners (a certain percentage of the Mineral Owners in a given tract must sign Seismic Permits), but none that I am aware of presently require 100%. Louisiana tried that and it was a resounding failure.

In other words, the other 50% Interest Owners, or even an Owner of a single 1%, might sign a Seismic Permit, thus allowing the company to include your lands / interests in their research without ever contacting your Brother-In-Law or you.

If you own the surface, you will be reimbursed for damages. Settlements of that sort are typically settled before the Shoot. In a situation like yours, where neither of the subject Wills have been submitted for probate, the seismic company may just have every possible heir sign a Settlement Agreement and cut them all or each a check.

Eastern MT is correct that you can be included in a unit without your title being clear or whether or not you are leased - they pool the land, not the mineral interests.

But since you know they are coming, I assume they must know where you are as well. If and when the Seismic Company or any subsequent Oil and Gas Company reach a point to where they are required to obtain signatures from whomever, they will contact you.

Hope this helps -

Charles