Unless you are familiar with the dormancy acts in your state, don't suppose that if 20 years has passed and you don't see any activity, that the minerals belong to the surface owner. What if those rights were severed in 1950 and that TOTALLY SEPARATE CHAIN has been kept active? How would you know? Nothing is going to show up in your surface owner's chain.
What if there's an active well on the property? Since it is HBP (Held By Production), the dormancy laws don't affect it. I did oil/gas work in Ohio several years ago that had active wells that started producing around 1920 and still produce today. Again, totally separate chain of title. (With 20 or 30 or 50 outsales of royalty percentages -- it was a nightmare. Searching one parcel took me a week.)
When you report oil/gas leases, having a disclaimer (I think Scott mentioned his?) is the way to go. Dangerous to give your client (usually title or mortgage company) the impression that the surface owner has the rights based on an oil/gas lease THAT MAY HAVE BEEN SLAPPED ON THERE WITHOUT A SEARCH HAVING BEEN DONE SIMPLY TO SECURE THE POSSIBILITY OF LEASING THE LAND.
Finally, 100 year search is not foolproof, especially in a state like PA where coal has been mined prior to that. PA separates their coal from oil/gas, but still it muddies the water. AND there's no dormancy act there. 100 years is not safe. Back to Patent is the norm in the oil/gas industry.
to post a reply:
login - or -
register