Can an Oil Company Sever My Property from a Lease if I Don't Sign a Pooling Agreement?
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Answer:
As to whether an oil, gas and mineral lease is binding on heirs and assigns, the answer will depend on the terms of the contracts and deeds involved, such as the duration of the mineral lease and the effect of the death of the lessor. Such a lease often contains terms that it will transfer to the lessor's heirs and successors. In some cases, the lease will expire on the death of the lessor. The lease/pooling agreement terms will also determine whether you have a right to royalties. Generally, one party cannot change a contract without the agreement of the other party. However, it is possible there is language in the contracts allowing for severing the property, or it may be a matter of requesting court intervention to partition the property. We suggest you contact a local attorney who can review all the facts and documents involved.
A partition action is a court action to divide property. Partition statutes allow those who own property in common to sever their interests and take their individual share of the property. An action for partition usually arises when a property is jointly owned and there is a dispute as to how to divide property, or in a dispute as to whether property should be sold. One co-owner of real property can file to get a court order requiring the sale of the property and division of the profits, or division of the land between the co-owners, which is often a practical impossibility. Normally, a partition order provides for an appraisal of the total property, which sets the price for one of the parties to buy out the other's half. The partition statutes govern actions for partition of real property, but the partition statutes do not apply to property divisions under the Family Law Act or in other types of cases specifically governed by other statutes. A partition action may be initiated and maintained by any of a co-owner of personal property; an owner of an estate of inheritance, an estate for life, or an estate for years in real property where such property or estate therein is owned by several persons concurrently or in successive estates. Generally, a partition action may be maintained only by a person having the interest in the property, however, an equitable interest, is sufficient to support a partition action. A 'partition in kind' refers to land partitioned conveniently and equitably between or among the owners. Alternatively, it must be sold as a single parcel and the proceeds divided among the owners. If two or more people who own a property as tenants in common or if people who are not married to each other own a property as joint tenants with right of survivorship develop a dispute concerning the property, any owner may bring a partition action with the court to get the property divided between owners. While the lawsuit is pending, all owners will have equal access to and interest in the property. This arrangement applies regardless of whether the mortgage is in one owner's name or the name of all owners.
Partition may be either voluntary or compulsory. Voluntary partition is when the cotenants (owners) divide the property themselves, usually by exchanging individual deeds. Each co-owner owns a part of the property and ceases to have an undivided interest in the whole. The parties can also provide for the sale of the property and divide the proceeds among themselves.
When the co-owners cannot agree to a voluntary partition, a lawsuit to compel partition can be filed to sever property interests. Unless there are exceptional circumstances, a tenant in common or a joint tenant has the absolute right to seek a compulsory partition. Partition must be made even if every other owner objects to it. The motives of the party seeking partition are irrelevant, and the court that hears the lawsuit has no discretion to deny partition. Its main function is to determine the method of executing the partition. Commonly the court will order the property sold and the proceeds divided, instead of ordering a physical partition of the property.
The mineral estate is a separate interest in land that can be severed from the surface estate. With regard to an oil and gas lease, a contract between mineral owner, otherwise known as the lessor and a company or working interest owner, otherwise known as the lessee in which the lessor grants the lessee the right to explore, drill and produce oil, gas and other minerals for a specified primary term and as long thereafter as oil, gas or other minerals are being produced in paying quantities. This lease gives the lessee a working interest. The oil and gas lease is granted in exchange for royalty payments to the lessor. In some cases, a lease will allow an assignment of those rights.
