Hello:
(I've also posted this question in the Major Co., OK group, but as it relate to ownership, I'm posting it here as well).
I recently received a request to lease my interest in Sec. 8-22N-10W in Major County, OK. I agreed to the lease, received a check for my interest, and all seemed fine. Ten days after receiving the check, I got a call from lessee that the original deed that conferred my interest was a "term interest deed" that expired if no oil production occurred after the original term of 20 years, that the area being leased did not show production during the time in question, and therefore my deed is no longer valid, and they are asking for their money back.
This was their error, and I had no knowledge at the time I signed the lease that the deed for my interest was a "term interest deed." I did find the original deed (from 1948) in my records and it is a 20-year term deed, but it also includes a provision that the deed remains valid as long as oil production occurs after the initial 20 year term.
According to a 1984 court case (Fox vs. Feltz) a stipulation was added to term interest deed law that if a deed is in its secondary term (after the initial 20 years has passed) production need not be on the land conveyed by the term deed, but can be from a drilling and spacing unit encompassing the described land in the deed.
Does anyone know how I could determine if production has occurred on or around Sec. 8-22N-10W in Major Co., OK in the years since 1968? (the end of the 20-year term). I don't want to take the landman's word that my deed is void before researching the issue myself.
And, if a lessee sends a lessor a check, then the lessee subsequently finds they made an error and wants their money for a lease back, is the lessor obligated to pay that money back? Does anyone know where to find a precedent legal case for this, or is it a question for a lawyer?
Thanks in advance for your help!
Angela
I show 4 wells with production from that section
Duffy Jun 1970 - May 1971 35-093-20398
Francis Duffy Jun 1966 - Nov 1967 35-093-30686
Duffy 1-8 May 1981- Sep 1984 API 35-093-22097
Alvey 8-1 Nov 1980- July 1983 API 35-093-22017
However, It would be my guess that the production would have to be continuous starting before the 1968 date and would terminate at the end of production.
I would suggest consulting an oil and gas attorney with experience with title opinions before returning any money. The Landman made a mistake. No question about that, so in which instance did the mistake occur? IMO, The expense of the attorney should be deducted out of the money refunded if that is the outcome.
You will get many opinions on if it should be paid back. I think a "good" attorney would be the one to direct it to. Depending on the amount, it could result in a lawsuit. However, I've also seen them badger and bully for a refund and then walk away from some pretty decent sized amounts.
Rick:
Thanks for your response, and the detailed info about production--is the well production info at the OK Corp Comm site? I'm still learning about all the information they offer.
The deed confers interest rights "for a period of twenty years from the date hereof (1948) and as long thereafter as oil, gas, or any other mineral is produced from said land, or operations for any such mineral are being conducted thereon, by grantor or grantee."
I looked carefully for any wording regarding "continuous production" and don't see that. Seems like I may have a case. My interest isn't huge--the bonus check for leasing the land was $1050--but I'm interested in maintaining my rights to future royalties, if in fact I'm still the rightful owner. I've contacted a couple of lawyers by phone and am waiting to hear back.
Thanks again for your help!
Angela
Based on the production info I found:
In my opinion (I'm not an attorney) the ownership would stop in 1968. Unless it was still producing at that time. Then once production ceased, ownership would go back to the original owner or whoever the deed stated. New production at a later time would not re-validate the deed.
"as long thereafter as" oil, gas, or any other mineral is produced from said land"
The Oklahoma Tax Commission may be able to provide the production reports. You will have to submit a list with payment for them to search. But the well spacing may not involve your deed. I didn't see the production info for the two older wells there or look for the newer ones.
OCC well data is here.
http://occpermit.com/wellbrowse
https://apps.occeweb.com/RBDMSWeb_OK/
Rick:
Thanks again for your input. I believe there are production reports available for free through the OK Corp Comm site--at the well info area, there's a button labeled "Production" and you can then enter a year to get the production totals.
I want the "as long thereafter" wording to be in my favor, to mean that as long as I can find records that show production at any time during the period after the original term of 20 years, that means I'm still the legal owner of the interest. I know that's likely too good to be true, but still, I want to hear it from a lawyer.
The other question that arises is assuming the original grantor of the deed (who solid his rights in 1948) is now deceased, and assuming he/she didn't leave any heirs, what happens to the interest? And if the grantor has heirs, would they know about this deed reverting back to them? Maybe, maybe not. The fact that the landman paid us for a tract he believed we owned the rights to says to me there are no other mineral rights owners listed--the ownership is in "limbo." If this is the case, and assuming my term-limit deed is no longer valid, I wonder if it's possible to buy a perpetual ownership. Would obviously cost a lot more today than the $10 my great-great-great-uncle paid in 1948!
I agree there are production reports available on OCC, but not all are there. I don't know what the have tracked historically, but only gas is tracked in those databases.
For the sake of argument/discussion;
If your "any time" after the primary term is valid, then how would the Term Interest Deed terminate? It would never terminate under that interpretation.
The "fact that the landman paid you" shows that he is wrong. Either in the original evaluation of title or the last. In my experience the original title run is the most common one to have errors.
I'll bet there are heirs but if not the state would get it. "estate shall escheat to the state for the support of the common schools". The small interest could end up divided among several cousins. The more likely scenario is that it would be escheated to the unclaimed property fund under the deceased name.
http://www.oscn.net/applications/oscn/DeliverDocument.asp?CiteID=73029