Landman Terms & Definitions:
Title Abstracting:
An abstract of title is a collection of legal documents that details a property’s complete legal history from its first record of ownership to present day. The title abstract includes information such as previous owners, title transfers, any liens or encumbrances on the property, and any legal disputes related to the property.
Lease Acquisition:
Negotiating lease terms that are beneficial to all parties. Protecting the mineral owner, their rights, and resources while still maximizing profits for the operators and investors involved in the projects.
Abstract:
Land assigned a number by the General Land Office of Texas. The abstract number is unique to the county. A named survey or section can be divided into abstracts.
Acre:
A unit of area; in the United States and England, an acre is equal to 43,560 square feet (4047 square meters). This is equal to 10 square chains or 160 square poles. 640 acres equals one square mile.
Bounty Grant:
Issued by the Republic of Texas to soldiers who served in the Texas Revolution and to those who enlisted in the army before October 1, 1837. The amount of land granted varied depending on length of service. Each three months of service provided 320 acres, up to a maximum of 1280 acres. Often the heirs of a soldier who died in battle would be granted the full 1280 acres on the assumption that the fallen soldier would have served for the duration of the war. Under a separate law, the Republic of Texas extended bounty grants from 1838 to 1842 to soldiers guarding the frontier.
Contiguous Tract:
A tract of land of which there is a continuous and unbroken perimeter.
Headright:
The right to a grant of certain acreage in a colony or province—or the certificate granting that right—often awarded as a means of encouraging immigration to and settlement within that colony. Headrights could be sold or assigned to another individual by the person eligible for the headright.
Indiscriminate Survey:
A survey method used in the U.S. State Land states which uses natural land features, such as trees and streams, as well as distances and adjoining property lines to describe plots of land. Also called metes and bounds or indiscriminate metes and bounds.
Mineral lease provision that extends the right to operate a lease as long as the property produces a minimum quantity of oil & gas.
Held By Production:
Continuous Development Clause:
In an oil and gas lease, a clause designed to keep drilling operations going steadily after the primary term has expired.
Correlative Rights:
Doctrine that each owner or producer in a common pool may produce only in such manner or amounts as not to injure the reservoir to the detriment of others or take an undue proportion of the production or cause undue drainage between developed leases.
Division Order:
A schedule of owners and their decimal ownership share in revenues of a well’s production derived from the sale of oil or gas.
Executive Rights:
Mineral lease provision that extends the right to operate a lease as long as the property produces a minimum quantity of oil & gas.
Horizontal Pugh Clause:
A clause often added to an oil lease to limit holding non producing lands beyond primary term of a lease. Also known as a Freestone Rider or a Pugh Clause.
Net Mineral Acres:
An expression of the fractional interest in a tract of land expressed as acres rather than a percentage. For example, a 1/4 undivided interest in an 80 acre tract amounts toa 1/4 interest in the entire 80 acres or 20 net mineral acres.
Non-Executive Mineral Interest:
A term used to describe an interest in oil and gas which lacks the right to join in the execution of oil and gas leases. It does have the right to a share of the bonus, delay rentals as well as royalty under existing or future leases.
Non-Participating Royalty:
An interest in oil and gas production which is created from the mineral estate. Like the plain “royalty interest” it is expense-free, bearing no operational costs of production. The term “non-participating” indicates that the interest owner does not share in the bonus, rentals from a lease, nor the right (or obligation) to make decisions regarding execution of those leases.
Suspended Funds:
Money that is held by the operator until certain requirements are met. This often happens when a change in title has taken place.
Vertical Pugh Clause:
Limits an operator’s ability to hold all depths of minerals with producing formations. Deals with depths of the minerals instead of areal extent addressed in a traditional Pugh Clause.
Divided Interest:
A tract has been partitioned into two or more sub-tracts and one party owns one sub-tract and the other party owns the other sub-tract.
Deed of Trust:
Sometimes called a Trust Deed. It is the instrument which conveys subject property to a Trustee to be held as security for the debt named therein.
Duhig Rule:
Refers to the case of Duhig v. Peavy-Moore Lumber Co., 135 Tex. 503, 144 S.W.2d 878 (1940) wherein the court held in favor of the grantee in a deed where the grantor did not clearly state how much interest he had in the minerals. When he reserved one-half of the minerals to himself, he forfeited his right to those minerals since one-half of the minerals had already been reserved by a prior owner and the new grantee, being an innocent third party, understood from the language of the deed that he was to receive one-half of the minerals. In summary, when the grantor does not clearly state what interest he has in the minerals in a deed, whatever he reserves, he first reserves for parties who had made prior reservations and then to himself.
Fiduciary:
A person who serves, with or without bond, to act for the benefit of another in all matters connected with the specific undertaking. Fiduciary obligations exist, for example, between trustees and the beneficiaries of a trust.
Grantor:
A person who grants or conveys lands, minerals, etc. in a conveyance.
Grantee:
The person receiving lands, minerals, etc. in a conveyance.
Mineral Lease:
An instrument which sets out the terms by which one party leases the right to explore and produce (if found) certain minerals within a specific tract or tracts of land. In the oil and gas industry, this is sometimes referred to as an Oil, Gas, and Mineral Lease.