Where can oil lease title opinions be located.
Depending upon the situation, they are usually proprietary and owned by the operator who contracted to have them done. They are very expensive to do and not public information.
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I usually add to the leases I am negotiating that the lessor can receive a copy of the portion of the title opinion involving just their interest upon request. I have never had an oil company refuse this language. However, in the case of a lease without this language, I have had good luck requesting nicely a copy of the title opinion involving just their interest. The title opinion is proprietary but they will usually send a redacted copy with just my client’s interest shown.
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So they send you 3 line items that look something like this? 1.0 x 0.1875 x 10/160 for the tract 1.0 x 0.1875 x 10/640 for the section 0.5 x 0.1875 x 10/1280 for the unit
Out of curiosity, how many times does that differ from the OGL acreage that they sign? When it does differ, how many times is the title opinion right vs wrong?
The oil and gas lease will usually have the gross tract acres on it-which is standard practice. The actual net acres will be determined by the division order title opinion. So very rarely would it match the oil and gas lease because of the difference between the net and gross acreage. The division order title opinion will have to account for 100% of the acreage for the unit.
As Amy said, one can sometimes have good luck asking for the paragraph of the DO title opinion that pertains to one’s personal acreage. The operator will not give the larger title document as it is very expensive to obtain. Be sure and save that paragraph in your files so that you have it for the future.
The equations that you quoted might be examples of the calculation of a decimal interest for a two section multi-unit horizontal well in OK. I am correcting the math.
Most spacing units in OK are at 640 acres with some at 1280 or other differing amount.
The equation in words is: net mineral acres/actual spacing acres x royalty x % perforations in your section. So this example would be 10 net mineral acres in the first section/640 acres x 3/16hs royalty which is .0.1875 x 50% of the total perforations in the first section. Then the second section would be an additional ten acres repeat with the other 50% of the well perforations.
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Martha, Thank you and very clear in calculating a interest.
Im very well aware of gross acreage vs net acreage. When someone asks for info on the title opinion, they are only going to get the redacted line item version like I mentioned above or maybe a comment and requirement snippet. I used simple terms in my equations, but thats what you will get when you ask, an equation for the tract, section and unit. I was simply asking, how many times does the title opinion stated net acres not matcup vs what the lessor and Aimee Hess the attorney for the lessor hires claim? Id guess its 9 times out of 10 they match, so then my other question is/was, when it does not matcup, who usually wins that dispute? Think its important for mineral owners to know when they hire attorneys to negotiate OGL’s what the success rate is vs the inhouse/hired attorney that drafted the DTO is, which is rarely talked about
Ownership shown in a title opinion is based upon your mineral interest in the land you have leased. The title opinion has to be right (in theory) because that is what the oil company uses (and often pays a steep price for) to pay all parties. A title attorney will not stay in business very long if his ownership calculations tend to be wrong. The oil company relies on it, the mineral owner can as well. Of course, there are always title complications and legal issues that arise where the attorney has to make an educated guess, but in those situations the attorney will require the oil company to take some affirmative corrective action to fix the issue. Oil companies spend a lot of money to have title examined, and they are relying on the accuracy of the ownership and information included.
The calculations you show indicate that you own a 10-acre interest (6.25%) in the 160-acre quarter section, which you leased at a 3/16 royalty (0.1875 or 18.75%). The remaining numbers are calculated on the same basis for the Section (640 acres) and the Unit (1280 acres.)
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Frank, I was an Oil and Gas attorney for a couple years in the 80’s, its been forever but I still know a bit about how the business. I simply asked the current attorney above how much success she has for her clients challenging their findings
Bob- I started in 1981 and am still at it! My experience dealing with operators is they are mostly agreeable to providing excerpts from the title opinion that apply to and discuss the specific mineral interest you are questioning or asking about. I find that if there is some title issue, which there most always is if you are requesting the TO, they are usually glad to have someone else weigh in on the issue.
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The Title Opinion is based on the quality of information that is provided to the Title Attorney by the Landman. The Landman will usually go to the Title Company and get a list of documents associated with the tract and then pull these into a runsheet for the attorney.
The documents only get into the Title Company if the legal description is listed on the document. If it is a general document that conveys all interest owned in a county or all interest owned at a specific time it will not show up in the Tract books at the Title Company. A good landman will also index the names of owners of the interest at the County Clerk. However, pressure to get it done quick from bosses can cause corners to be cut.
My families interest is very complicated and I have many times had to contact the oil company before, during, and after leasing(and even while the well was being drilled, which caused much excitement at the oil company) to walk them through my interest thread and have been successful a majority of the time. You do have to have all your documents and a flowchart is helpful.
I have also created Affidavits explaining my families interest and filed them in the counties that I have interest in so Landmen will find these documents easily while indexing on the computers now. One thing when doing this is to make sure you instruct the County Clerks on all the names(ancestors or predecessors in title) you want it indexed under as there is an extra charge to index after so many names(3 or 5 I think). Then it is also critical after it is filed to make sure it is in the records and indexed properly. I learned this the hard way with a document with 30 properties that was filed in a county but was not in the index!
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I was briefly a title attorney and still know several title attorneys, Ive never heard of a title attorney preparing a division order title opinion based off a landmans runsheet, maybe you meant the picture taker that takes all the images filed against the section that title attorney reviews? Or maybe some shops do this now, guessing they wont last long.
If your families interests are that confusing and youve been contacted numerous times, have you filed a stipulation of interest and cross conveyance for all parties so that you dont have to keep messing with it?