Ownership and Rights Flashcards
What is “civil” law?
How is civil law developed?
Is the system of law concerned with private relations between members of a community rather than criminal, military, or religious affairs.
- Federal
- State
What are oil and gas Laws?
Oil and gas law is a body of law based on traditional civil law theories and doctrines. Oil and gas law combines several disciplines of civil law: real property law, contract law, tort law, administrative law, tax law, environmental law, and others.
Oil and Gas laws at State Level
Each State which has oil & gas production has also developed its own body of oil and gas law.
Oil and gas laws require regulations
Oklahoma Corporation Commission
Oklahoma Department of Environmental Quality
Oklahoma Wildlife Commission
Legislature-> Statues-> Administrative Agencies->Regulations
Agencies enforce regulations and disputes with industry often begin with an administrative proceeding before an administrative law judge.
Appeals from the state agency level are generally made into the state judicial system.
Many oil and gas disputes (e.g. surface damages) are initiated in the state court system and never involve a state agency such as the OCC
KEY → understand the jurisdictional issues
Fee simple absolute in real property
Surface and minerals
Unlimited duration
Unlimited rights [subject to regulation under the police power of the federal or state government].
Transfer of title to real property
A. Inception of title
Real Property rights are transferred by:
Instrument of Conveyance, e.g., Quitclaim Deed, Warranty Deed, Mineral Deed, etc.
Inheritance, e.g., Will or through the laws of intestate succession
Judicial Action, e.g., foreclosure, tax sale, quiet title action
Adverse Possession – the open, notorious, visible, and continuous possession of the property for the prescribed statutory period.
B. Chain of Title” – Successive conveyances and other transfers of title for a particular parcel of the real property beginning with the government patent through the present owner.
Examination of the Chain of Title provides the current owner of the surface and minerals and any encumbrances, burdens, or defects with the title.
Recordation of the conveyances and other transfers of title in the County Clerk’s office provides notice to the public and protects the Grantee’s rights to the property.
Tract Index
Instrument Books
Abstract Companies
D. Requirements for a valid instrument of conveyance.
a. A writing
b. Words of the grant, e.g., “. . . does hereby grant, bargain, sell and convey . . .”
c. An adequate description of the property
d. Grantor and Grantee – identify and capacity
e. Proper execution – signature
f. Delivery and acceptance of the instrument
[Majority position – a consideration not required but commonly recited and provided. Louisiana requires consideration.]
E. Examples of Instruments of Conveyance.
Quitclaim Deed – Conveys all of Grantor’s rights without any covenants of title.
Warranty Deed – Conveys rights described and includes covenants of title. Granting clause may be limited by lesser interests, e.g., limited legal description, fractional interest, or reservation of minerals.
Mineral Deed.
In Oklahoma, the mineral estate is the “dominant” estate
Land Descriptions
- Original 13 states and Kentucky, Tennessee, Ohio, Maine and Vermont
- Locations of the property by reference to exterior boundary lines and monuments. Starting point with monuments at each angle or corner.
Example:
Deed 1730 [Kentucky] “ . . .a certain piece of land lying and being upon Potomack River beginning at the mouth of Audictum Creek at Box Elders marked with three notches on every side and to run up said River to hundred shoots as far as a arrow can be flung out of a bow and is to be one hundred shoots right back from the river so containing its square till it intersects with the said Creek again . . .”
Deed 1897 [Texas] “From a pile of rocks to a steel post to the bank of Mukewater Creek and north to the open prairie . . .” Describes a 755-acre farm near Brownwood, Texas
3. Drawbacks and difficulties to Metes and Bounds Irregular tracts Complex descriptions – error-prone Monuments are not permanent Gaps and overlaps
Rectangular Survey System
The most common type of legal description used in an oil and gas conveyance is a reference to a governmental survey. The most commonly referenced governmental survey is the “Rectangular Survey System” which was officially adopted by the Federal government in 1805 to create a uniform land system for the expanding United States.
Original rectangular surveys were conducted by the Federal government under the jurisdiction of the General Land office.
“Central Point” is a point from which all survey lines originate and run North and South and East and West. [See Diagram 1]
a. “Meridian lines” or “Range lines” run North and South
b.“Baseline” or “Township lines” run East and West
- A rectangle survey consists of contiguous tracts 6 miles square. Each tract, or “Township”, contains 36 “Sections”, each 1 mile square. Sections are numbered 1 to 36 commencing at the Northeast (NE) corner of the Section and running West to Section 6, then dropping down to 7 and East to 12, and so on to Section 36 in the Southeast (SE) corner of the Township.
A Section is the smallest survey unit [See Diagram 2].
Section = 640 acres (except for correction sections)
Section = 1 square mile (except for correction sections)
Township = 36 Sections - Irregular Sections (other than Correction Sections) which require the use of Government Lots.
Townships bordered by Indian reservations, National Parks, and other government-established Townships.
Meandering streams [See Diagrams 5 and 6]
Riparian owner – “One who owns on the bank of a river, stream, or another watercourse.
“Accretion” – The gradual and imperceptible accumulation of land by natural causes”. Property ownership follows the act of accretion.
“Avulsion” – A sudden and perceptible loss or addition to land by the action of water, e.g., a sudden and perceptible change in the bed or course of a river or stream. Property ownership does not follow the act of avulsion. - Legal Descriptions within the Rectangular Survey System
Quarter Sections – NE ¼, NW ¼, SE ¼, SW ¼ [See Diagram 7]
Sub-divided Quarter Sections [See Diagram 8] Writing out the legal description, i.e., Northwest Quarter, is preferred to abbreviating the legal description, i.e., NW/4; however, both are legally acceptable.
Keys to interpreting the legal description.
No separator describes on the tract, e.g., NW/4 SW/4 of Sec. 22 – one 40 acre tract.
“of the” describes one tract, e.g., NW/4 of the SW/4 of Sec. 22 = one 40 acre tract.
“and” or “and the” describes two tracts, e.g., NW/4 and the SW/4 of Sec. 22 = two tracts of 160 acres each.
“,” (a comma) describes two tracts, e.g., NW/4, SW/4 Sec 22 = two tracts of 160 acres each.
Three different ways to describe the same 20-acre tract:
West Half of the Northwest Quarter of the Southwest Quarter of Section 22, Township 18 North, Range 10 West, of the Indian Meridian, Blaine County, Oklahoma, containing 20 acres more or less.
W ½ of the NW ¼ of the SW ¼ of Section 22, Township 18 North, Range 10 West, of the Indian Meridian, Blaine County, Oklahoma, containing 20 acres, more or less.
W/2 NW/4 SW/4, Sec. 22, T18N, R10W, Blaine County, Oklahoma.
Correction Sections
Correction Sections allow for the curvature of the earth. Correction Sections are not exactly 1-mile square and do not contain exactly 640 acres.
Each Township of 36 Sections has 11 “Correction Sections” along its North and West sides, being Sections 1 through 6, 7, 18, 19, 30, and 31. [See Diagram 2]
Government “Lots” are used in Correction Sections 1 through 6 and along the West sides of Sections 6, 7, 18, 19, 30, and 31. [See Diagram 3 and 4]
