Louisiana mineral rights agreement discussion thread

They can keep for 10 years as long as there is no activity. Once activity takes place the 10 years starts over. I suggest a surface rights waiver

We countered with a reduction in price for no rights.

The owner of the property will not get the rights themselves until the end of the year, which will be the ten year mark for them. They are offering a percentage to us, which I can live with, however if they don't own them yet themselves how can they convey this? I'll talk to my attorney but everyone here knows so much more than attorneys and rocket scientists I figured i would toss it out there.

As of now we know the property is not under lease and no activity is on it and I believe it is safe to say nothing will happen before the end of the year. I will say its in an oil play area and we expect it to be active at some point in the future. Hence the reason for the rights being important.

I think my biggest concern is can we even negotiate mineral rights if they don't have ownership of them now anyway. And does the previous owner come into play?

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I think my biggest concern is can we even negotiate mineral rights if they don't have ownership of them now anyway. And does the previous owner come into play?

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I am an oil and gas attorney but have very limited experience with Louisiana oil and gas law. You're really going to need to talk to a Louisiana attorney on this one, but I'll give my thoughts.

On the one hand, reversionary interests or remainderman interests are conveyable (for instance, in Texas, the Grantor of a conveyance of minerals for "a term of 10 years and as long thereafter..." would be free to transfer those reversionary rights).

But as I understand mineral ownership in Louisiana, it isn't so much a "term interest" in the usual sense, and if you were allowed to separate the reversionary rights it would defeat the entire purpose of the prescription statute in the first place. The current owner's interest in the minerals is fully tied to surface ownership, and it sounds like what the owner is attempting to do would result in the minerals being severed from the surface for 20 years, which is clearly not allowed by the statute. The owner seems to be operating under the assumption that he owns a reversionary interest distinct from his surface ownership, but I don't think that's correct.

You cannot convey what you do not own.

Talk to your attorney. Make sure you mention the "the seller doesn't have the mineral rights right now but he wants to convey them" part.

I don't think they can reserve minerals that they do not own. After the 10 year prescription period, the minerals revert to the current surface owner, which in this case would be you, assuming you make the deal before the end of the year.

FYI- an oil and gas lease trumps surface ownership, so if someone else has a lease on the property, they can enter the property and drill wells, and the company will only have to settle surface damages with you.

I'm fairly certain that is the case- he can't reserve what he doesn't currently own. I'll double check tomorrow when I get to the office.

FTR- I'm in the oil and gas business

Honestly, you need to be asking your lawyer these questions.

You're getting into some nuanced stuff that can significantly alter the value of the land and you need to be asking a professional instead of a bunch of dipshits on a message board.

ETA: There is some misinformation in this thread. Don't rely on anything here