My question has to do with mineral rights to my single family residence located in LA. I know some of my neighbors receive royalties for mineral rights resulting from an oil and gas lease (from the 50's?). I'm looking into whether these rights should have been passed down to me as the owner of this property. The original lease was to Union Oil but I've spoken to PXP about it and they sent me the following reply:
A review of the file for this property reveals the royalty rights were severed by virtue of an Assignment of Union Royalty Interest dated November 12, 1973 and Final Decree of Distribution of the Estate of George M Fujita, filed on 07.19.74.
This reply was very interesting too, because when I first contacted PXP a year before they said my subject property lies outside the PXP drilling district, and returned my grant deed I had sent them showing that I am the current owner of the property. Now they produced documents that show the oil and gas rights were transferred in a will in 1973. Hmmm, they didn't have this information the first time?
I've gone into public records here in Los Angeles and pulled some of the grant deeds documenting historical sales of my property. Almost none of the deeds mention the oil and gas rights but there was a sale in 1987 that includes the following language:
"Together with all right, title and interest accruing to grantor under the certain oil and gas lease recorded in Book 54330 page 161. Official Records of Los Angeles County California."
To me, it seems like the oil and gas rights were still attached to the property at that point in 1987. So PXP provided documentation of the Assignment of Union Royalty Interest and a will dating back to 1973 where the previous home owner granted 100% of royalties to their heir.
Do they now hold these rights forever or can they will it to another heir? Or does this lease ever revert back to the current homeowner, which is me. That would be nice.
Let me know if anyone has information about this type of thing.
Thanks,
Pierre Dwyer
pierredwyer@gmail.com
(196 KB)
2689-1987Propertydeed.pdf (644 KB)
Afternoon Pierre, I have been in the oil business for 30+ years but I am not specifically knowledgeable of California property laws even though I own minerals in several counties, so my answer will be a generic one.
In all states that I am knowledgeable of minerals pass with the surface unless specifically reserved. That said, it would be my guess that a predecessor in title reserved the minerals which would cause you to own surface but no minerals. Once severed, the minerals do not revert back to the owner in any state that I am aware of with the exception of Louisiana and that is only in the case of 10 years of inactivity.
Thanks for the reply. It does seem by the documents I uploaded that a previous owner willed the oil and gas lease rights to an heir, which would leave future buyers of the property with only surface rights. But, when they sold the property, is it possible that they did not reserve the rights to the property in a title grant deed? Is the will enough to show that they transferred the subsurface rights or does it have to be reflected in a title deed? As I mentioned this will occurred in 1973. The property was sold a few times since then and then in 1987 there was language in the grant deed pertaining to oil lease rights. This was not mentioned in any other deeds.
Thanks for the info on mineral rights not reverting to an owner. It seems like the rights stay with the family or heirs once it has been split off from the surface property. I guess my only hope is that they did not tranfer these oil and gas lease rights properly by not having it reflected in a grant deed. Maybe that will supersede the will.
It's interesting because in my neighborhood in LA, Union Oil leased the rights from just about everybody in this area. My neighbor across the street bought his house in the 70's and the previous owner was going to keep the mineral rights. He said in that case, he wouldn't buy the house. Eventually, the owner included the subsurface rights. My neighbor has been making $80-$100 month off of that lease for nearly 40 years now. That adds up to some good money.
Pierre, minerals are the best asset you can possibly own in my opinion. I often refer to them as mailbox money and the gift that keeps on giving. I have been acquiring them since 1982 and own in over 100 counties in 14 states and have never sold an acre.
Again, I dont know California laws but I would think that if they probated that estate and filed it against the property in question that would suffice as far as passing title.
You often see transactions later in title that are erroneous but they do not affect the fact that the minerals were severed and did not pass with the surface.
It is my understanding that once severed by a will there would never be any chance to obtain them without buying them from whoever owned them through the will. I am not an attorney, and it could be different in California,
Do you have a copy of the Lease referenced in your deed?
It may benefit you in googling "Dormant Mineral Act California"
It's impossible to say who owns what without a full blown title search, otherwise we are just speculating here. In the "Assignment of Union Royalty Interests," which I would call a "Royalty Deed," somebody named Cherry Hotta conveyed 100% of whatever royalties she owned to James Takahishi. She appears to have inherited 1/2 of WHATEVER royalties George M. Fujita had, and James Takahishi appears to have inherited the other 1/2 of whatever royalties George M. Fujita had, so James Takahishi probably owned 100% of whatever royalties George M. Fujita had owned AT THE TIME OF HIS DEATH, BUT there is no way to know for sure from the information provided here what amount of royalties George M. Fujita DID own at the time of his death! Maybe he owned 1% of all the royalties, maybe he owned 100% of all the royalties, it's impossible to know without more research.
Also, your quotation about "Together with all right, title and interest accruing to grantor under the certain oil and gas lease recorded in Book 54330 page 161. Official Records of Los Angeles County California" DOES NOT convey any mineral or royalty ownership from the Grantor to the Grantee in fee simple, or to state it differently, conveys it to Grantee and their heirs/assigns ONLY for as long as the Lease recorded at 54330/161 is still in effect, after which time all mineral ownership and mineral rights revert back to Grantor or THEIR heirs/assigns. It would be like if I owned a condominium, leased it out, and then assigned all the rents under that lease to you. Therefore, you do not OWN the condominium, I still do, BUT you are entitled to the rents until the renter's lease is expired.
So IF 54330/161 was a valid Lease at the time the Deed was executed in 1987, and IF 54330/161 is still a valid Lease today and has not expired, and IF you are in the chain of title from Gualbert and Arrilia Martinez coming forward, and IF neither they nor anybody else between them and you in the chain of title reserved the royalties under this Lease, and IF nobody between them and you in the chain of title lost the royalties in some kind of judgment, then you MIGHT have a case. But if 54330/161 ever expired, then you probably do NOT have a claim on the royalties. Impossible to say without more research.
With all of these leases, does anyone know if the O&G companies have access to the Monterey shale reserves that are 10-15 thousand feet below? If so, this could mean some bigger checks soon!