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Severed Mineral Rights Mean Lengthy Title Search

by Kenneth E. DuBose on August 31, 2011

Mineral rights ownership can be divided, divided again, and divided again just about as many times as you can say divided. There’s no simplicity in tracing back mineral ownership. It can take an hour, days, months or even years to track down the proper owners and the percentage of ownership that person has can be as little as 1/512th in the case of the mineral owner below.

If you are an active mineral owner, always keep good records that will make it easy on your descendants to make future decisions. If you have something of value, you’ll want your grandkids to reap the benefits and not some state escrow fund.

In Pennsylvania, property owners can sell surface property but retain control of minerals. That includes natural gas trapped in the mile-deep Marcellus shale formation that was out of reach until the technology behind hydraulic fracturing evolved enough to extract it.

Pore’s share, passed down from his great-grandmother, amounted to 5 percent, netting him $2,300 for a five-year lease but potentially much more from 14 percent in royalties if the firm drills a productive well. He plans to pass on the lease in his will so it can benefit his two children and six grandchildren.

“People are either really excited or really skeptical,” said David Szuhay of Szuhay and Associates, a Robinson-based consultant to oil and gas companies. “When I call, I try to quickly mention great-grandpa Joe Flanagan, and if that name clicks, they’re listening.”

The larger number of eligible descendants, the smaller their shares.

“We’ve had cases that have gone down to 1/512th of a share,” said Lester Greevy, a Lycoming County lawyer who specializes in estate planning and elder law. “They had a family tree that was eight feet long.”

Finding family members spread across five or six generations comes with high stakes.

Relatives can sue an energy company for millions of dollars if it drills a well and takes natural gas without permission from everyone who owns a portion of the mineral rights.

“There is a line of cases in Pennsylvania where if you take somebody’s gas, and you don’t have a lease with them, they can become a partner in the well,” said Harry Klodowski Jr., an attorney in Pine. “They certainly don’t want to give them 50 percent of a well, when it could be 18 percent.”

A typical title search before a home purchase goes back 60 years, said John Ward, a Greensburg attorney. Oil and gas searches reach back to about 1860, the year Abraham Lincoln was elected president.

Read the full news release at chron.com

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