CHAPTER 4 FINDING, ACCESSING, RUNNING, AND EXAMINING THE LOCAL RECORDS AND PREPARING THE CHAIN OF TITLE

• Jurisdiction: United States

Mineral Title Examination
(Sep 2007)
CHAPTER 4
FINDING, ACCESSING, RUNNING, AND EXAMINING THE LOCAL RECORDS AND PREPARING THE CHAIN OF TITLE
George A. Snell, III
Attorney at Law
Amarillo, Texas

George was born in Pampa, Gray County, Texas. He attended Baylor University and Baylor Law School graduating in 1972 with BA and JD degrees.

Since 1972, George has practiced law in Amarillo. He maintained a general practice, including litigation, until 1979. In 1979, George joined an attorney who had been preparing title opinions for oil and gas purposes since 1966. George also limited his practice to the oil and gas and real property areas, focusing primarily on the preparation of title opinions for all purposes. George and his former partner, now deceased, have together prepared over 8,000 title opinions.

From 1985 to 1991, he was one of the team of speakers teaching AAPL's Certification Review course. He taught NADOA's Certification Review course from 1993 to 1996. George has spoken at many other industry seminars for landmen, division order analysts and bar associations. Many of his articles have been published in The Landman.

Since 1989, George has served on the Texas Bar's Title Standards Joint Editorial Board. The purpose of title standards is to summarize the law on a real property subject and provide practical solutions to common conveyancing problems. All real estate practitioners, including oil and gas practitioners, should be familiar with the title standards of any state where they conduct business.

While George is not a member of a firm in the traditional sense, George has put together a network of title lawyers in 16 states who work together for both business and writing purposes. All other 15 lawyers have written articles comparing the oil and gas law of their state to Texas, using the same format as in the prototype article written in 1989 which compares the oil and gas law of Oklahoma to Texas.

As a solo practitioner, George has more flexibility in administrative matters than a larger firm. For example, depending upon the volume of work to be done, he answers the phone either "Hard working lawyer's office" or "Hardly working lawyer's office"!

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CONTRIBUTING FRIENDS

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Arkansas	California
Tom Daily	James M. Day, Jr.
Daily & Woods	Day, Carter & Murphy, L.L.P.
Attorney at Law	3620 American River Drive, Suite 205
P.O. Box 1446	Sacramento, CA 95864
Stephens Building	(916) 570-2500 x 102
Fort Smith, AR 72902-1446	jdav@davcartermurphy.com
(479) 782-0361
(479) 782-6160 FAX
tdailv@dailvwoods.com
Colorado
Greg Danielson
Davis Graham & Stubbs, L.L.P.
1550 17th Street, Suite 500
Denver, CO 80202
(303) 892-7438
(303) 893-1397 FAX
greg.danielson@dgslaw.com
Kansas	Louisiana
Charles C. (Chris) Steincamp	Rick Revels
Depew & Gillen	Liskow & Lewis
151 North Main, Suite 800	P. O. Box 52008
Centre City Plaza	Lafayette, LA 70505
Wichita, KS 67202-1409	(337) 232-7424
(316) 265-9621	(337) 267-2399 FAX
(316) 265-3819 FAX	rwrevels@liskow.com
chris@depewgillen.com
Michigan	Mississippi and Alabama
Jim Neal	John Sanford McDavid
Loomis, Ewert, Parsley, Davis & Godding	Young Williams P.A.
232 South Capitol Ave., Suite 1000	2000 AmSouth Plaza
Lansing, MI 48933	Jackson, MS 39201
(517) 482-2400	P. O. Box 23059 (39225-3059)
(517) 482-7227 FAX	(601) 360-9014
jrneal@loomislaw.com	(601) 355-6136 FAX
jmcdavid@youngwilliams.com
New Mexico	New York
Greg Nibert	John H. Heyer
Hinkle, Hensley, Shanor & Martin, L.L.P.	Attorney at Law
400 Penn Plaza, Suite 700	P. O. Box 588
P. O. Box 10	Olean, NY 14760
Roswell, NM 88201	(716) 372-0395
(505) 622-6510	(716) 372-0446 FAX
(505) 623-9332 FAX	john.hever@psinet.com
Gnibert@hinklelawfirm.com
North Dakota & Montana	Oklahoma
Brian R. Bjella	Timothy C. Dowd
Craig C. Smith	Elias, Books, Brown, Peterson
Fleck, Mather & Strutz, Ltd.	& Massad
400 East Broadway, Suite 600	211 N. Robinson
Norwest Bank Building	Suite 1300
P. O. Box 2798	Oklahoma City, OK 73102-7114
Bismarck, ND 58502	(405) 232-3722
(701) 223-6585	(405) 232-3746 FAX
(701) 222-4853 FAX	timdowd@eliasbooksbrown.com
bbjella@flecklaw.com
Pennsylvania	Texas
Russell L. Schetroma	George A. Snell, III (Deanie)
Culbertson, Weiss, Schetroma & Schug, P.C.	Attorney at Law
201 Arch Street, Suite 200	2201 Civic Circle, Suite 508
Meadville, PA 16335-3432	Amarillo, Texas 79109
(814) 336-6400	(806) 359-8611
(814) 336-6570 FAX	(806) 355-3339
russ@cwss.com	gasiii@nts-online.net
Utah	Wyoming
Angela L. Franklin	Craig Newman
Pruitt Gushee	Attorney at Law
1800 Beneficial Life Tower	P. O. Box 2310
Salt Lake City, UT 84111	123 W. 1st Street, Suite 675
(801) 531-8446	Casper, WY 82602
(801) 531-8468 FAX	(307) 237-9588
alf@pruittgushee.com	(307) 237-9589 FAX
(307) 237-5518 - H
cmannew@aol.com

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TABLE OF CONTENTS

I. A Practical Comparison - Reading an Abstract v. Standing Up in the Courthouse

A. Definitions

B. Examination of Abstract Prepared by Abstract/Title Company

C. Examination of a "landman's abstract"

D. Conducting a Standup Examination

II. How to Access Local Records

A. Arkansas

B. California

C. Colorado

D. Kansas

E. Louisiana

F. Michigan

G. Mississippi

H. Montana

I. New Mexico

J. North Dakota

K. Oklahoma

L. Texas

M. Utah

III. What Constitutes the Chain of Title

A. What is "Inside" Or "Outside" the Chain of Title

B. Matters Outside the Chain Of Title Which May Have Priority Over Record Title

1. Farmout Agreements

2. Joint Operating Agreements

3. Pooling

4. Bankruptcy Considerations

C. Summary of Effect of Lien Burdens Upon Title

1. Important Terms

2. Judgment Liens

3. Other Involuntary Liens

4. Ad Valorem Taxes

5. Operator's Lien

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6. Statutory Mineral Contractor's Liens

7. Oil and Gas Products Lien

8. Personal Property

9. Lien Priority and Subordination

10. Removal of Liens

11. Lis Pendens

D. Summary Of the Doctrine of After-Acquired Title

1. Current Rule

2. Nature of the Doctrine

3. Limitations and Exceptions

E. Dormant Mineral Acts

1. Abandonment

2. The Louisiana Solution - Prescription of Nonuse

3. Constitutionality - Texaco, Inc. v. Short

4. The North Dakota Solution - Dormant Mineral Act

5. Some Lingering/Unanswered Questions

IV. Assignments of Leases - Wellbore Only

A. Examples of Assignments

B. The Best Description

C. The Difficult Description - PetroPro v. Upland Resources

Bibliography

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I. A PRACTICAL COMPARISON - READING AN ABSTRACT v. STANDING UP IN THE COURTHOUSE

A. DEFINITIONS

1. Run Sheet - list of instruments, either by date of recording or by date of the instrument, identifying all instruments that affect title to a specific tract.

2. Abstract/Title Company Abstract - List of the instruments themselves, may or may not contain a run sheet/index/table of contents, prepared by a state licensed abstract/title company that contains at the end a certificate that the abstract includes all instruments affecting title to the land described.

3. "Landman's Abstract" - Abstract prepared by an unlicensed land/brokerage company that purports to include all instruments affecting title to the land described, but without a certificate.

4. Tract Index - List of instruments, in the order recorded, that identify a specific tract of land, usually by section, abstract or survey. Tract Indices are maintained by nearly all abstract/title companies and by county clerks in some states.

5. Grantor/Grantee Index - List of instruments by last name of the grantor and grantee of each instrument. A reference to the land covered may or may not be included. Some abstract/title companies may maintain a grantor/grantee index, but all counties that do not maintain a tract index maintain a grantor/grantee index.

B. EXAMINATION OF ABSTRACT PREPARED BY ABSTRACT/TITLE COMPANY.

1. The examiner should be able to rely upon the completeness of the instruments contained in the abstract, as certified by the abstractor.

2. This is the most costly option as abstractors charge considerably more per page than a clerk for copies.

3. This may take more planning and lead time because most abstractors do not prepare abstracts quickly.

4. It is becoming more difficult to obtain an abstract in rural counties, and nearly impossible in urban counties.

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5. Because of the amount paid for the abstracts, the parties are reluctant to dispose of them, but who has the space to keep them?

C. EXAMINATION OF A "LANDMAN'S ABSTRACT".

1. Can be obtained more quickly than an abstract/title company prepared abstract.

2. Is not as complete/thorough because it usually contains only the instruments identified in the abstractor's tract index. In other words, too often there is no corresponding grantor/grantee record check.

3. There is no corresponding certificate as would be attached to the abstract/title company prepared abstract.

4. Because there are frequently important instruments omitted, such as probates, name changes, etc., that are not listed in a tract index, the examiner must wait for the landman to return to the project and submit the missing instruments.

5. Because of title examiner demands, some land companies preparing abstracts are examining the title themselves, running the grantor/grantee indices and even preparing plats of important metes and bounds descriptions.

D. CONDUCTING A STANDUP EXAMINATION.

1. The examiner usually relies on a third party prepared run sheet listing the

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