Where There Is A Well There Is A Way
Where There Is A Well There Is A Way Out Tract Title Issues Regarding Horizontal Wells 2015 Law School Homecoming CLE Friday, March 20, 2015 Peter E. Hosey Jackson Walker L.L.P. 112 E. Pecan, Suite 2400 San Antonio, Texas 78205 (210) 978-7700 phosey@jw.com Introduction A. Horizontal Well B. Vertical Well Unleased or Previously Undrilled “Out” Tracts • Lots in old Subdivisions • Gardendale Colony • Carrizo Park Categories of Out Tract Title • Tract subsequently acquired by surrounding landowner • Tract kept by the grantees • Surrounding landowner has not ripened adverse possession, tract owners are unknown • Surrounding landowner has ripened fee simple limitations title • Tract’s surface and mineral interest have been severed Resolving Title Issues in Out Tracts Various options exist to overcome any impeding title issues plaguing the out tract. Title Rests with Surrounding Landowner by Grant or Tax Foreclosure Sale • Surrounding landowner would purchase adjacent tracts • Heirs or devisees unaware of interest fail to pay taxes and tracts are sold at tax foreclosure Title Rests with the Original Lot Grantee, Her Heirs, Devisees or Successors, None of Whom are the Surrounding Landowner • Lease from Original Grantee, heirs, devisees or successors and Pool Leases • Obtain allocation permit from Railroad Commission Due Diligence and the Procedures Available to Lease Mineral Owners • Trespass to try title action • Receivership Leases • Adverse Possession • Partition Suit Receivership Proceedings • • • • Used when Owner cannot be identified Court Appointment of Receiver Negotiate Lease for benefit of Unknown Owners Pay proceeds to Court Adverse Possession • Adverse Possession litigation is fact determinative • Outcome depends upon adjudication of facts as a result of determination by a jury • Possession must by open, continuous, exclusive, adverse and notorious, and otherwise comply with relevant limitations title statute • Judgment should be recorded Mineral Estate In the Out Tract is Severed • • • • Lease directly with outstanding mineral owner Receivership Adverse Possession prior to mineral severance Adverse possession after mineral severance • Drilling and production from wells located on acreage • Possession of Minerals required Partition of Multiple Undivided Interests • Partition in Kind • Determine share or interest of each joint owner • Tract must be susceptible to partition in kind • Partition Sale • Purchase by surrounding landowner • Purchase by third party Unleased Title to Dedicated Roadways • Dedication of Easement • Minerals owned by adjacent landowner • Lease of lots covers minerals • Dedication in Fee in Favor of County • Lease with General Land Office • Have road declared abandoned • Common Law • Dedicated use impossible or improbable • Use for which property is dedicated fails • Texas Transportation Code §251 • Dedicated use improbable or impossible • Enclosed with a fence for at least 20 years A Discussion of Examples In Practice Conclusion • Prudent, diligent and thorough title analysis • Chain of title • Use, possession and occupancy of tract • • • • Secure Lease from owner determined by search Receivership Adverse Possession Partition Where There Is A Well There Is AWay! Out Tract Title Issues Regarding Horizontal Wells 2015 Law School Homecoming CLE Friday, March 20, 2015 Peter E. Hosey Jackson Walker L.L.P. 112 E. Pecan, Suite 2400 San Antonio, Texas 78205 (210) 978-7700 phosey@jw.com
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