Our oil & gas lease was with SandRidge Exploration for 88.83mineral acres. Range Resources recently completed a well and provided us division orders for royalty interests based on 85.775 acres out of the 640 acre spacing. Range subsequently supported the 85.775 acres with their title opinion that indicated our acreage was reduced by 3.055 acres for a railroad right-of-way that runs through the section. The legal description of our SandRidge lease does not have this right-of-way exclusion as neither did our contract/deed when we bought/sold (excluding minerals) the property. I have explained and provided a land diagram to Range to demonstrate that our mineral interest borders the railroad right-of-way and that none of the right-of-way is situated within our acreage. Range has provided chain of title relating to the right-of-way and stands by the acreage as set forth in their title opinion (3.055 acres should be excluded because of different ownership).
I think we’ve reached an impasse on the issue. Any suggestions for next steps? I’m not aware of any recent property surveys. If the next step is legal action, I would very much appreciate recommendations for attorneys that have handled similar situations.
You have made great progress. If it were me, I would look at the title chain and get a copy of the Rail road conveyance.
If sounds as if they provided you with a copy of the portion of the Title Opinion as it pertains to your conflict. If they have not, I would request it.
I would also ask them if they would mind providing their section survey showing interior tracts. Probably filed of record already. I would be surprised if it were not.
Just need to find out a little more to understand what is going on. You are wise to confirm your interest on a Division Order. People make mistakes all the time.
Be careful that you don't put too much faith in Sandridge mineral takeoff. They may have missed the RR right of way also. New lessees want to get the lease first and foremost knowing that DO Title opinions will correct any mistakes they make. They would prefer to err on the side of leasing too much not too little so sometimes they lease the same acreage twice just to be sure they have it. They may or may not have taken a lease from the RR and Buddy C is right, you should make sure your part of the DO is supported by facts. I managed the Rock Island RR minerals for several years across Oklahoma and know that some right of way title for minerals is better than others. Sometimes it is just a surface right not a mineral right.
Just taking a guess, but I would imagine, like Gary said, the land crew working for Sandridge did miss the RR right of way, probably confusing a simple right of way with a right of way deed, conveying not only the surface but the minerals under the RR tracks, and X amount of feet on each side.
If you'll provide the Section-Township-Range, I can shed some more light on the situation.
Thanks for your help/responses. The location is SW/4 S20-T24N-R2W.
The RR R-O-W was established in 1899 by staking a center line and taking 50’ on both sides (initially 6.58 acres, now 6.11 acres). It appears to me that minerals were conveyed to the RR. I’m not sure of the significance of this since my deed / legal description start with “all that part lying west of the abandoned right-of-way.” This is also why I don’t think my interests / acreage should be reduced for any part of the RR ROW….they do not overlap.
I‘ll see if Range will provide a section survey showing interior tracts.
Appreciate any additional thoughts you might be able to provide.
From my experience, yes, the Railroads always got minerals whenever they acquired surface for their tracks and operations. That's not to say that there isn't some instance where they did not get any minerals, but from my experience throughout Texas they always did. Don't know about Oklahoma.
Anyway, did anybody notice that the 3.055 acres reduced from the 88.83 acres is exactly one-half (1/2) of what Phil states is the current acreage for the RR ROW (6.11 acres)? This tells me that the landman obtaining the Lease threw in half of the RR ROW without determining that the ROW was a Deed, not an Easement. This combined with Phil's statement that "my deed / legal description start with 'all that part lying west of the abandoned right-of-way'" is the smoking gun for why I believe that Range is correct and the lease acreage amount is incorrect.
It seems like Phil has inspected the instrument into the RR and "it appears to me that minerals were conveyed to the RR." And in the very next sentence, he says that the legal description for the tract of land that HE purchased contained wording that it lied "west of the abandoned right-of-way." So clearly, he believes that the minerals underneath the RR belong to a tract separate from his tract. But THEN he says, "I don’t think my interests / acreage should be reduced for any part of the RR ROW….they do not overlap." But that is EXACTLY why the acreage amount upon which your royalties are based SHOULD be reduced, Phil, because there ARE two separate tracts, one of which you don't own!
Now if you're thinking, "Well, I don't care if I own those minerals under the RR ROW or not, I leased 88.83 acres to SandRidge, Range owns the SandRidge Lease, so Range has to pay me for 88.83 acres," I would refer you to what's called a "Proportionate Reduction" clause. That's a clause in most leases that says that regardless of whatever acreage amount is specified in the Lease (and most Leases specify gross acres, NOT net mineral acres), you will be paid royalties on whatever net mineral acreage you actually DO own.
If the SandRidge Lease contains such a clause, then my suggestion is for you to forget about talking to an attorney because unless there is some other information that we don't know about, you do not have a case. In that case, just be grateful that the landman screwed up and you were overpaid for an extra 3.055 acres of bonus consideration which you undoubtedly will not have to reimburse! Otherwise, if the SandRidge Lease does NOT contain a Proportionate Reduction clause, then you might have a case. The answer is in the exact wording of the Lease. Good luck.
For Buddy's question: Range does not have a survey and no survey was filed with county records. I was told that they use acreages from filed land/mineral conveyances in the Title Opinion.
Seeing Pete’s response, let me explain a little more. Basically, there are three parts to the quarter: West side of ROW (my portion), the RR ROW (deeded) and East side of ROW.
The West side deed legal says “all that part lying west of the abandoned ROW”
The East side deed legal says “all that part lying east of the west line of the RR ROW”
The Title Opinion was prepared for Range by a 3rd party law firm. The attorney told me that because of ambiguity in the legals, their interpretation was that west of the ROW’s center line should be excluded from the West side (my portion) and, likewise, east of the ROW’s center line should be excluded from the East side. (As Pete commented ½ is deducted from me).
To me, it sure appears obvious that all of the ROW should be deducted from the East side and none from the West side (my royalty interest is understated as a result). However, the 3rd party law firm / Range are standing behind their Title Opinion.
I still think the landman who took the lease screwed up by putting 88.3 acres on there, he should have put 85.775 in the first place and paid you on that second amount, not the first amount. Nothing in this discussion leads me to conclude otherwise. Just because he paid you bonus on 88.3 acres does not mean that the company has to pay you royalties on 88.3 acres, unless there is no proportionate-reduction clause? So does the SandRidge lease have a proportionate-reduction clause? Perhaps you could upload a copy of the lease?
Pete, I don't have access to my lease right now. I'll let you know on the proportionate-reduction clause in couple weeks.
Thanks for clarifying that royalties should be paid on my deeded mineral acres and not lease acres. Perhaps I should started this discussion by saying that our deeded mineral acres is 88.83 (same as the SandRidge Lease) and Range is trying to pay us royalty on 85.775 acres (3.055 acres less for ½ of the RR ROW – also deeded property). The Attorney who prepared the Title Opinion for Range said that “all that part lying west of the abandoned RR ROW” is ambiguous and that, by their interpretation, ½ of the ROW should be excluded from our 88.83 acres (West side owner) and the other ½ of the ROW should be excluded from the East side owner.
Hopefully this is a little clearer and demonstrates my problem. Suggestions for next steps?
I did NOT say "that royalties should be paid on my deeded mineral acres and not lease acres." I said they should be paid on your deeded mineral acres and not lease acres if there is a proportionate-reduction clause. Or to be even more correct, they should be paid on what YOU ACTUALLY OWN unless there is no proportionate-reduction clause. So even if the Deed where you bought the property says that you were conveyed 88.83 acres, which I would have to see to believe, if that is not actually true in reality, then if there is a proportionate-reduction clause in the Lease, then you have a right to be paid only on whatever acreage you ACTUALLY OWN.
You have said, "that our mineral interest borders the railroad right-of-way and that none of the right-of-way is situated within our acreage." You have also said, "my deed / legal description start with 'all that part lying west of the abandoned right-of-way.'” You seem to agree that the acreage west of the RR ROW is 85.775 acres, so why on Earth you believe that you are entitled to get paid on more than that acreage is beyond me.
Nobody can convey to you property they were not entitled to convey. So if I sold you a piece of land and called it 88.83 acres, but it actually contains 85.775 acres, then THAT is what you own, 85.775 acres! Or take a more extreme example. Let's say I conveyed to you 888.83 acres, but it actually contains 85.775 acres, does that mean that you own 888.83 acres and does that mean that you are entitled to be paid royalties on 888.83 acres just because the Buyer made a typographical error and just because a landman was incompetent enough to put that amount on a Lease? Of course not! You own what you own, and you can only lease what you own, and you will be paid only on what you own unless there is no proportionate-reduction clause.
So no, things are not any clearer after your last post, and I fail to see what problem you have. You appear to own 85.775 acres, so that's what you should be paid on. Range is a very professional, reputable, and fair company. I see no "next steps" for you. Take the money and run.
Pete, we don’t quite see eye-to-eye but I do appreciate your viewpoints. To answer your questions, 1) my O&G lease does have a proportionate-reduction clause and 2) my deeded 88.83 net acres (94 acres before exclusions) can be easily calculated from the deeds.
I’m not wanting to be paid royalty on the RR ROW. As stated previously, I don’t own it. My interest is all west of the ROW and thus there is no reason to reduce my 88.83 acres by the 3.055 ROW acres. The east side property was conveyed as 66 acres (the number should have been reduced by the 6.11 ROW acreage but wasn’t even though the legal description excluded the ROW).
I’m sure Range and the 3rd party law firm are fine companies, but anyone can make mistakes. As long as Range tries to pay us royalty on 85.775 acres, I believe that my west side royalties will be underpaid and the east side owner's overpaid for the life of the well(s). I have 4 other producing properties and each time the oil company has asked me to sign a Division Order / verify my royalty interest without any details of how it was calculated. Hopefully this serves as a “heads up” to all other royalty owners to double check their numbers.
As for my situation, I intend to pursue this issue. The Title Opinion attorney says that he’ll change the Title Opinion provided the east side owner agrees. There’s not much incentive for the east side owner to agree at this point (after the fact) but we’ll see what happens. I was told at the outset that they probably wouldn’t change anything unless they faced legal action.
I believe that your last post was the first one in which you state that your actual deed states that you were conveyed 88.83 acres. That definitely would change things. So you claim that you own 88.83 acres and ALL of it lies immediately West of the West line of the RR ROW, then there is the RR ROW consisting of 6.11 acres, then there is the "east side property," which you say is 66 acres minus 6.11 acres, or 59.89 acres, for a total of 154.83 acres, right?
I don't understand what you mean when you say that the legal description in the deed for the 66 acres did not include the 6.11-acre ROW but the 66 acres should have been reduced by 6.11 acres anyway. I'm thinking it is actually 88.83 acres W of W Line of RR ROW, 6.11 acres underneath RR ROW, and 66 acres E of E Line of RR ROW, for a total of 160.94 acres, very close to a typical 160-acre quarter section. So I'm thinking the 66-acre figure is correct. Anyway, that is secondary.
So if your deed says that you own 88.83 acres and it also says that that acreage is W of the W Line of RR ROW, as you have said in a previous post, and your Lease was for 88.83 acres, as you stated in the original post, then I would agree with your position that you should be paid on 88.83 acres, with the caveat that I would still want to read your deed (or preferably all three deeds) before expressing confidence in this new opinion.
Yes -almost…All acres west of the west line of the ROW is 94 acres (of which my portion is 88.83). All acres east of the west line of the ROW is 66 acres. Total 160 acres. The center point of the initial ROW is 586’ from section center on the north side and 1486’ from the SE corner on the south side and extends 50’ on both sides. Using a little geometry, one can confirm/support the 94 acres and 66 acres. Unfortunately, the situation is a bit more complicated and there are not just a few deeds to support the numbers – there are several deeds over time, some I’m still obtaining.
Since there is no survey, this is what I suspect the attorney faced when preparing the Title Opinion: 94 acres conveyed west of the ROW (west side owner + a couple of others), 6.58 acres (now 6.11 acres) conveyed as the RR ROW and 66 acres conveyed for all east of west line of the ROW excluding the ROW (east side owner). Total 166.11 acres. The attorney concluded the Title Opinion by excluding ½ of the ROW from the west side owner and excluding the other ½ of the ROW from the east side owner. He said that because of ambiguities, his interpretation is that the dividing line/boundary between the west side and east side is the center line of the ROW, not the western most line of the ROW. (One could speculate that he realized that there was an error in the conveyed number of acres and so not knowing which is correct/incorrect and no survey, he decided upon a quick solution: reduce the west side by ½ of the error and the east side by ½ of the error and see if anybody complains.)
This discussion has helped in three regards: 1) I probably need to explain both the west side understatement as well as the east side overstatement to effectively communicate the problem - the most egregious change from the deeded legal descriptions to the Title Opinion is for the east side owner 2) gained some assurance that I haven’t overlooked / misunderstood something and 3) a reasonable / prudent person would interpret “west of the ROW” and “west line of the ROW” as meaning/referring to the western most line of the ROW and not the center line of the ROW as proposed by the attorney. I appreciate your time.
OK, I'm still confused. In the first paragraph, you state, "All acres east of the west line of the ROW is 66 acres." In the next paragraph, you state, "66 acres conveyed for all east of west line of the ROW excluding the ROW (east side owner)." So which one is it, 66 acres includes the RR ROW or does NOT include the RR ROW?
Also, you say in a previous post that the land conveyed to you was 94 acres less "exceptions," for a total of 88.83 acres. What was excepted? I'm guessing that you are right now about this whole situation, but it's just impossible to say with any real confidence unless I can read the deeds, and I think that there is still some piece of information that you are missing or that I am missing, one of the two. Please upload the deeds when you get a chance. Otherwise, I don't see how I can contribute further on this thread.