Deed Language

Looking for an opinion on the following deed language for a relative of ours that owns some property. "Seller retains all rights to royalties from mineral, oil and gas leases on existing wells". Does this mean that the mineral rights transfered with the property as it does not say excepting and reserving all minerals? but the only thing that was reserved was the royalties from exisiting wells? The property was originally sold thru a land company to an individual and then down the road my relative and they used this language in all of their transactions when the land company split the farm up. There is no existing wells or leases on the original farm as they last well was plugged in the early 90's and all old leases were recorded when they were released. They plan to seek the advise of an attorney soon, but just wanted to see if anyone else has this deed language or can give some insight to see if the mineral rights were included. thanks

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Permalink Reply by Billy Park Whyde on July 24, 2012 at 1:17pm

What state is this in, makes a difference!

Permalink Reply by joe-s on July 24, 2012 at 1:48pm

Its in Ohio, Muskingum County

Permalink Reply by Billy Park Whyde on July 24, 2012 at 2:17pm
Permalink Reply by joe-s on July 24, 2012 at 2:32pm

OK thanks, I will give it a look. Does this language in the deed though reserve the rights to all minerals OR just the rights to royalties on existing wells as it is worded which no wells and no leases no longer exist?

Permalink Reply by Billy Park Whyde on July 24, 2012 at 2:35pm

"Seller retains all rights to royalties from mineral, oil and gas leases on existing wells". Not an attorney but with the wells being gone I would say it was over with. 

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on July 24, 2012 at 3:49pm

Just the royalty.  To severe a mineral interest it must be explicitly spelled out in the deed.  

Permalink Reply by J Wengert on July 25, 2012 at 11:39am

I am located in Muskingum county as well, I purchased a 15 acre tract that was cut up by Detwieler. It was part of a much larger tract of land. I have the same language in my deed. When i purchased the property I put wording in the contract "continginous to all mineral rights transfering". This forced the current landowner to have a title search completed. When the results came back it showed Kenoil had a lease recorded on the property. Before I purchased the property, the current landowner called the Kenoil office, and they agreed to release the property. Now all my new neighbors have an official lease release recorded at the county, along with myself. dumb luck I guess.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on July 25, 2012 at 4:50pm

Dumb luck that was spurred by your good choice in having extra language added to your deed.  Don't discount the role that you played in having those old leases released.

Permalink Reply by william r rinehart on July 26, 2012 at 4:45am

Our property and my neighbors was tied to same terms as the one you stated it is worded tieing all royalties to existing shallow well. We called them so we would be release they said no way. Devon was just permited for a well right next to our property,  the shallow driller called us and said, they sold our mineral rights to someone they would not say. My quess is they sold them to devon, but said we would receive 12% royalties, what a rip off. Sounds like you can get out of yours though they said we where held by production, the well sits across the street about a mile from our poperty. I had heard they write anyprodcution number the need to keep the well in production, capping a well runs about $12,000.

Bill

2pwt9ru4672sqPermalink Reply by 2pwt9ru4672sq on July 26, 2012 at 5:11am

Bill,

Not sure why you consider to be a "rip off"?  When you purchased the property it would appear that you were aware of the existence of this HBP oil and gas lease, as well as the fact that you weren't entitled to receive any of the royalties from existing wells.  It could be worse, your grantor could have reserved the right to receive ALL royalty income, not only from existing wells but from future wells too. 

If you truly suspect that the existing production on this old well isn't sufficient to keep the old lease in force and effect then you could make that allegation to the existing well operator.  Chances are that Devon will perform some due diligence of their own to confirm that the existing well has in fact produced in paying quantities.  If it hasn't, Devon will defect the lease and presumably approach you (assuming you own the mineral rights) for a new lease, or perhaps a ratification... that would be your entree into getting some cash out of the transaction. 

Permalink Reply by Bob McClelland on July 26, 2012 at 3:20pm

In looking at the replies to this thread, there seems to be a confusion between actual ownership of minerals (that is contained in the deed) and the right to produce the minerals that you own (that are contained in a lease).  This is understandable considering the actual deed language commingles the two.  WIth that being said, case law in Ohio is clear that language almost identical to "Seller retains all rights to royalties from mineral, oil and gas leases on existing wells" is NOT a transfer of minerals, and just a right to recieve royalties from existing wells.  So it appears from your scenario that your relative does in fact OWN the minerals. (as an aside, the dormant minerals act has absolutely nothing to do with your relatives ownership interest as the seller did not technically reserve the minerals). With the plugging of the wells, this language has not effect on anything, and your relative has the right to enter into a subsequent lease.  In order to make entering into a subsequent lease more likely, the one thing you need to ask yourself is "What would a title examiner decide when reading this language in the chain of title?"  You are probably better served to file an Affidavit of Facts Relating to Title to make is crystal clear that there are no producing wells or active leases ojn the land and the language in the deed has no effect.  You would hate for an ill informed title examiner to read this language and defect your title, putting you back months from collecting a bonus payment.

Bob McClelland

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