AboutDavid B. McCall Expertise Questions regarding oil and gas exploration and production, the operation and management of oil and gas producing properties, and questions related to mineral ownership, title problems, and oil and gas leases.
Experience I am Board Certified in Oil, Gas and Mineral Law in the state of Texas. I have more than 34 years of experience in the industry as both an in house attorney for major oil companies and as a partner in oil and gas firms. I am also a mineral owner and receive royalties from oil and gas production. I have extensive title examination experience, and have represented clients in many administrative and court proceedings.
Organizations State Bar of Texas, Texas Bar Foundation, and Austin Bar Foundation.
Publications Various state bar seminars on Oil and Gas matters.
Education/Credentials I have a business degree in marketing from McMurry University, 1971, and a JD degree from Texas Tech University in 1974, where I graduated 17th in my class. Board Certified in Oil, Gas and Mineral Law in 1986.
Expert: David B. McCall Date: 7/19/2008 Subject: Deed Subject to Gas and Oil lease not disclosed
Question David,
We recently purchased 20 acres in PA, and have been approached by a gas company to sign a lease. We repeatedly turned down offers. We are not interested in gas drilling on our property.
But...after reading stories about property owners not owning their mineral rights, I pulled out our deed to see if we owned ours. I found a clause that states "UNDER AND SUBJECT TO AN OIL and GAS LEASE". I then went looking for the title insurance, and sure enough found that our property was leased to the New York Oil Company in 1985.
We were not aware of this clause, and would not have purchased the property if we knew that it was under a lease. We were not provided the deed and title insurance information until after our closing. The Title Ins and Deed were mailed to us from the lawyers office that we used when we purchased the house and property.
1) Shouldn't this information have been disclosed to us by 'someone', 'anyone'. I don't know if the previous owners even knew about this clause, since the lease was signed before they bought the property too.
2) I could not find any information on the New York Oil Company. Do they still exist?
3) If a contract was signed, where can we get a copy of the contract to see how long the lease was for?
4) I'm hoping the lease has expired by now. Was there a standard lease time oil companies used back in 1985?
Even though you may not want to lease, oil and gas activity in your area could still affect your proerty so it is good to know your rights, particularly if you don't own the minerals beneath your property. I can't tell from your question whether the minerals were conveyed with your property.
First, I would get a copy of the oil and gas lease. You should be able to get it, or order a copy the deed from the title company, and abstract plant, or the registrar of deeds in the county where you live. In all probability, an oil and gas lease that old has probably expired, but you will want to look at the term of the lease to make sure. Lease terms of 5-10 years were common in the time frame mentioned by you. I also could not find anything on New York Oil Comapny.
Is there any production on adjacent tracts or in the area? If there is no production in the area, and you or your predecessors have not been receiving any royalty, and the lease is beyond its term, then it is probably expired.
As oil and gas matters are generally excepted from title coverage (I assume that this is also true in Pa.) I don't know that anyone had an obligation to tell you about the lease, but you might want to check with your attorney on this.
I am guessing that you don't have anything to worry about here.
Good luck and let me know if you have any further questions.
