Chapter 42 - § 42.8 • UNKNOWN|UNCLAIMED MINERAL INTERESTS

• Jurisdiction: Colorado

§ 42.8 • UNKNOWN/UNCLAIMED MINERAL INTERESTS

In situations where the mineral estate has been severed from the surface estate, it is not uncommon for mineral interest owners to be unaware of their interest or for the identity of such mineral owners to be unknown. These problems typically arise when there are reserved fractional mineral rights from real estate conveyances, which are further fractionalized through residuary clauses of wills and intestacy laws.

For years, jurisdictions have struggled with this problem of missing or unknown mineral owners, which was often thought to be an obstacle or restraint to mineral development. In several jurisdictions, this issue can be resolved through principles of abandonment, adverse possession, and/or tax sales. Finding such procedures inadequate, other jurisdictions have passed so-called dormant mineral statutes in an attempt to unify title. In this portion of the chapter, some of the traditional remedies, along with their inherent limitations, are discussed, including their applicability to mineral interests in Colorado.

§ 42.8.1—Abandonment

Abandonment is one method utilized to extinguish another's property interest. Under the common law theory of abandonment, there were two required events: (1) non-use of the property by the owner; and (2) the intent by the owner to abandon it. Williams & Meyers, supra at § 210. Abandonment requires the simultaneous concurrence of these two elements, each of which must be clearly proved by competent evidence. Although non-use of the property alone will not constitute abandonment absent the requisite intent, it may be considered as evidence of the intent to abandon. Id. Non-use need not exist for any specified duration; abandonment may be immediate if relinquishment of possession is accompanied by the requisite intent. See 1 C.J.S. Abandonment §§ 3 and 7 (1936).

At common law, how an interest was classified impacted whether the interest was subject to abandonment. An incorporeal interest, such as an easement or profit à prendre, could be extinguished by abandonment. Williams & Meyers, supra at § 210. On the other hand, common law did not recognize the possibility of losing a corporeal estate by abandonment. It would logically follow that, in jurisdictions that classify a mineral interest or leasehold interest as incorporeal, such interest should be subject to abandonment. In contrast, in jurisdictions that classify a mineral interest or a leasehold interest as corporeal, such interests should not be subject to abandonment. However, in several jurisdictions, the classification of an interest as corporeal or incorporeal does not appear to have any correlation with whether an interest is subject to abandonment.

In Colorado, use of the abandonment theory without specific statutory authority has been very limited when dealing with a severed mineral fee interest. While some early cases suggest that the theory of abandonment can be used to argue that an oil and gas lessee abandoned its leasehold interest, it is unlikely that such an argument will prevail because of the difficulty in establishing intent to abandon. See, e.g., Hoff v. Girdler Corp., 88...