Mineral Owners vs Surface Owners Reaches New Level in Louisiana

by Elizabeth Alford on November 11, 2015

A Baton Rouge federal court is trying to untangle a very messy web in one case of surface vs mineral owners.

Related: Surface Rights vs Mineral Rights

Union Pacific Railroad and WarHorse Oil & Gas LLC are engaged in a legal battle over who has the rights to use a piece of Louisiana land. WarHorse holds the lease for the mineral rights to the property and obtained permits to drill two wells, according to the Louisiana Commissioner of Conservation James Welsh. But Union Pacific owns the surface rights and wants to use the land for a railroad yard. They argue that the federal preemption clause bars state regulation of rail transportation, including construction or operation of a yard, and that WarHorse should use directional drilling to extract the oil.

Starting in January, both sides began firing off accusations and court documents that escalated to physically using bulldozers to assert their rights.

Keith Hall, director of the Louisiana Mineral Law Institute at LSU said it is unusual for a dispute between surface and mineral owners to reach this level, but when it does happen, those who own mineral rights are generally viewed as the dominant estate. 

“That’s one of the tensions when a landowner, such as the railroad in this case, purchases land without purchasing the mineral rights,” Hall says. “It’s well established that the mineral rights owner—unless the parties have agreed otherwise—has the right to come on the surface as reasonably necessary for mineral production. If push comes to shove, generally the mineral rights owners are the rights that trump. So occasionally, you do see these disputes.”

Both companies have sued the other seeking permanent injunctions, but after after a settlement conference on November 3rd, but there is still no resolution.

Read more at businessreport.com




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