Oil in the Family': Obtaining the Requisite Consent to Conduct Operations on Co-owned Land or Mineral Servitudes

• Author: Patrick S. Ottinger
• Position: Member, Louisiana and Texas Bars
• Pages: 745-791

“Oil in the Family”: Obtaining the Requisite Consent

to Conduct Operations on Co-owned Land or Mineral

Servitudes

Patrick S. Ottinger∗

TABLE OF CONTENTS

I. Introduction ..........................................................................747

II. Rights and Duties of Co-owners Generally .........................749

A. Introduction ....................................................................749

B. Partition Is the Remedy Available to the Unhappy

Co-owner ........................................................................750

C. Jurisprudential Treatment of the Right of a Co-owner

to Grant a Mineral Lease on Its

Undivided Interest in the Co-owned Land .....................752

D. Jurisprudential Treatment of the Right of a

Co-owner to Grant a Mineral Servitude on Its

Undivided Interest in the Co-owned Land .....................761

III. Enter the Louisiana Mineral Code .......................................761

A. Preface ............................................................................761

B. Amendments in 1986 .....................................................763

C. Amendments in 1988 .....................................................763

IV. Creation of a Mineral Servitude by a Co-owner of Land....764

A. Article 164, Louisiana Mineral Code .............................764

B. How It Works .................................................................764

V. Granting of a Mineral Lease by a Co-owner of Land ..........765

A. Article 166, Louisiana Mineral Code .............................765

B. How It Works .................................................................765

Copyright 2013, by PATRICK S. OTTINGER.

∗ Ottinger Heber t, L.L.C., Lafa yette, Louisi ana; Member, Lo uisiana and

Texas Bars; Adjunct Professor of Law, Paul M. Hebert Law Center, Louisiana State

University, Baton Rouge, Louisiana.

746 LOUISIANA LAW REVIEW [Vol. 73

VI. Rights of Co-owners of a Mineral Servitude to Operate

on the Land ..........................................................................766

A. Article 175, Louisiana Mineral Code .............................766

B. How It Works .................................................................766

C. A Limited Exception to the Need for a Requisite Level

of Consent ......................................................................766

D. Scenario Within a Scenario ............................................769

E. Jurisprudential Treatment of the Co-owned Servitudes

Created by Partition .......................................................769

VII. Rights of Co-owners of Land to Operate on the Land,

Independent of a Mineral Right ...........................................772

VIII. Form, Duration, and Extent of Consent ..............................773

A. Introduction ....................................................................773

B. Form of Consent ............................................................773

C. Duration of Consent .......................................................777

D. Revocability of Consent .................................................777

E. Transfer of Lease After Obtaining Consent ...................778

F. Mineral Lease Containing a “No Surface Operations”

Clause …………………………………………………779

IX. Doing the Math ....................................................................780

X. The Proviso ..........................................................................782

A. The Legislature Lowers the Threshold but Introduces

a Proviso .........................................................................782

B. Unanswered Questions ...................................................782

C. The “Other” Contract .....................................................784

XI. Rights and Obligations of a Nonconsenting Owner.............784

XII. Application of Consent Requirements to the Conduct of

Seismic Activities on Co-owned Lands or Co-owned Mineral

Servitudes ............................................................................785

XIII. What Is the Worth of a Mineral Right if the Requisite

Consent Cannot be Obtained? ..............................................788

XIV. Conclusion ..........................................................................790

2013] OIL IN THE FAMILY 747

I. INTRODUCTION

This Article examines Louisiana law regulating the circumstances

under which oil and gas activities may be conducted on co-owned

land or on land burdened b y a co-owned mineral servitude.1 Although

this important topic has been considered in other writings,2 a more

current examination is in order because no prior commentary has

considered the significant amendments to the Louisiana Mineral Code

in 1988.

“Ownership of the same thing by two or more persons is

ownership in indivision.”3 Also known as co-ownership, the Civil

Code further provides that “[t]wo or more persons may own the

same thing in indivision, each having an undivided share.”4 A

person owning along with others an undivided interest in the same

thing is called a co-owner or an owner in indivision. For purposes

of ownership, a person must be a natural person or a juridical

person.5

“Tracts of land, with their component parts, are immovables.”6

Hence, land is a corporeal7 thing which is susceptible of being

owned in indivision.

Co-ownership of land might arise in a variety of ways. While

the most typical situation giving rise to co-ownership is that

resulting from a recognized mode of disposition or alienation of

land to two or more persons (such as sale, donation, or exchange),

it might also arise as a consequence of inheritance8 or divorce

1. First recognized by the Louisiana Supreme Court in Frost-Johnson

Lumber Co. v. Salling’s Heirs, 91 So. 207 (La. 1922), a mineral servitude is now

codally defined as “the right of enjoyment of land belonging to another for the

purpose of exploring for and producing minerals and reducing them to

possession and ownership.” L A. REV. STAT. ANN. § 31:21 (2000).

2. J ohn M. Shuey, Some Problems of Co-ownership in Louisiana Mineral

Law, in TWELFTH ANNUAL INSTITUTE ON MINERAL LAW 63 (George W. Hardy,

III ed., 1965); Thomas A. Harrell, Problems Created by Coownership in

Louisiana, in THIRTY-SECOND ANNUAL INS TITUTE ON MINERAL LAW 379

(Patricia A. Geier ed., 1986); Angela Jeanne Crowder, Comment, Mineral

Rights: The Requirement of Consent Among Co-owners, 48 LA. L. REV. 931

(1988).

3. LA. CIV. CODE ANN. art. 797 (2008).

4. Id. art. 480 (2010).

5. Id. art. 479. For the definition of both a natural person and a juridical

person, see id. art. 24 (1999).

6. Id. art. 462 (2010).

7. “Corporeals are things that have a body, whether animate or inanimate,

and can be felt or touched.” Id. art. 461.

8. “When a person, at his decease, leaves several heirs, each of them

becomes an undivided proprietor of the effects of the succession, for the part or