Wednesday, June 25, 2008

Louisiana Oil and Gas Association

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Anonymous said...

We own 675 acres in Natchitoches parish. The previous owner of the land reserved 50% of the mineral rights for 10 years. If we have a natural gas lease on our land, prior to the 10 years ending point, who makes the negotiation? Is the previous owner entitled to lease proceeds (mineral rights) or merely the royalties in the event that natural gas is found?

Gifford Briggs said...

Each party is eligible to negotiate for their interest in the property – there could actually be two different leases. The minerals would remain owned 50% by each party until the end of the 10 year period – if no well has been drilled on the property or the property is not included in a unit, the 50% scheduled to prescribe will in-fact do so. To expand this explanation, in the event of a well being drilled on said tract and/or production before the end of the prescription period, minerals would be interrupted and remain separate. This would be subject to whether or not a well was drilled on the tract in which case minerals would be interrupted as to the entire tract or if the well is located off the subject tract and on a separate sight and the property would be included in a unit – the minerals included in that portion of the property included within the unit would be interrupted and the portion outside the unit would prescribe to the current surface owner – given the factors listed below.