Thursday, March 28, 2013

The Legas Effect of a Severance

Today we enter into Chapter 2 of Texas Law of Oil and Gas.  The first section of Chapter 2 is "The Mienral Estate and The Surface Estate. 

When we look at general property law in Texas, from the time of Patent, the owner of the land owns the oil, gas and other minerals below the surface in Fee Simple (the authors cite Texas Co. v. Daugherty, 107 Tex. 226, 176 S.W. 717).  It is, however, possible to sever the ownership interest between the surface and the oil, gas and other minerals.  The most often means of doing so is via a mineral reservation in a deed, however, it's also possible for there to be a conveyance of the oil, gas and other minerals via deed or other conveyance. 

There are legal consequences and other considerations involved in a severed estate.  For example, the authors cite Glasscock Underground Water Conservation District v. Pruit (915 S.W.2d 577 - Tex. App.--El Paso 1996, n.w.h.), where surface owners claimed that their having joined a water conservation district bound the owners of the severed mineral estate to... annex the land described in (a petition) be annexed into the Glasscock Underground Water Conservation District.  However, the court held that the owners of the mineral estates held equal right to use, dispose and tax the water.  The conclusion reached by the court was that the surface owner also owns the water beneath his land, so he can entrust exclusive jurisdiction of it tot he district he chooses to join, howeve,r the subsurface water owner does not have the exclusive right to use.  The owner of the dominant mienral estate has a right to use water belonging to the surface estate for various exploration and development purposes (this would be a part of the bundle of sticks included in the mineral estate), and only if the owners of the mineral estates remain in the Santa Rita Water District and began withdrawing water for secondary recovery would there be the need for conflicting assertions of jurisdiction and regulation.  This sounds to me a bit as if the court punted on the issue, but that's what the conclusion is. 

Tune in next time when we delve into the Mineral Estate.

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