We often think of easements as roads or maybe something that the power company uses to run highlines across our property. Both are correct, and there are many, many more examples (pipelines, drainage easements, pad sites, frac ponds, etc.). An easement is simply a property right to use land belonging to another person. Easements create a dominant and servient estate—the dominant estate being the land served by the easement, and the servient estate being the land used for the benefit of other land. Easements can be express or implied. For example, Owner A sells his highway frontage property to Owner B but keeps the rest of the property behind it. In the deed to Owner B, Owner A reserves an express road easement to access the property in back (the dominant estate) from the highway over Owner B’s frontage property (the servient estate). That’s an express easement. On the other hand, if Owner A sold the entire surface of his property to Owner B but reserved the minerals in the deed, Owner A now owns an implied easement to use Owner B’s surface (the servient estate) as is reasonably necessary to develop the minerals underneath (the dominant estate). Owner A would not have to expressly reserve such an easement; it is “implied” in his reservation of the minerals in the conveyance of the surface to Owner B.
A landowner with a mineral fee estate may own some of the following mineral rights or attributes: the executive right (right to lease), right to develop, and the right to receive royalty payments. The executive right allows a mineral owner to enter into an oil and gas lease, receive bonus and the right to receive delay rental (deferment of drilling during the primary term of the lease). The right to develop allows a mineral owner the right to drill, extract, transport and sell oil and gas production. The right to receive royalty payments is reserved by the mineral owner in an oil and gas lease when the right to develop (working interest) is granted to the oil company.
A mineral owner may have one, some or all of the mineral rights. It is important to know what rights you hold when entering an oil and gas lease or other transaction to properly determine the economic benefits to which you are entitled.
A royalty interest is created by an oil and gas lease, entitling its owner to receive payments from production of oil and gas free of operational production costs. Typically, a royalty interest in an oil and gas lease is no more than ¼ of the sales from production.
A non-participating royalty interest (NPRI) owner is also entitled to share in production with no production costs; however, since an NPRI is carved out of the mineral interest and stripped of executive rights, an NPRI owner does not have the right to enter into a lease (which is the executive right) or receive the benefit of bonus or delay rentals.
In general, an oil and gas lease grants a fee simple determinable interest, which requires production after the primary term in order to perpetuate the lease, subject to savings or extension clauses (example: shut-in, dry-hole, drilling operations, reworking operations, etc.) in the lease. Depending on your lease, if production stops and drilling operations are not started within the specified time under the production clause of the lease, then the lease may terminate. If there are no savings operations during the time in which the lease stops producing, the lease will terminate. Of course, savings clauses and time periods for cessation of production vary from lease to lease. It is important to understand the time frame for cessation of production and other savings clauses of your lease when contemplating a claim for termination.
A delay rental in an oil and gas lease is payment that is made by the lessee, usually on an annual basis, during the primary term in lieu of production or drilling operations. This payment effectively delays drilling operations and production. If the lease contains conditional or “unless” language, then a lease can terminate if the delay rental payment is not made timely in the full amount by the lessee. Delay rental clauses are strictly written with the time frame, amount and delivery instructions for payment.
A Paid-Up Lease substitutes the delay rental payment and is instead calculated as part of the bonus. The payment is made up front at the execution of the lease which pays for the entire primary term. A Lessee typically prefers to enter into a Paid-Up Lease to avoid the administrative burden of annual payments and avoid potential termination of the lease for failure to timely pay. Most modern leases are Paid-Up.
Depending on the wind lease, payment can be structured in different forms at various stages of the lease. However, most leases are broken up by two terms: 1) the development or exploration term, followed by 2) the operations or production term. Typically, a wind lease during the development term will provide for payment on a per acreage basis paid annually during such term. This payment may increase or escalate each year depending on the lease. During the second term (known as the operations term of the lease), Lessee will typically pay royalties to the Lessor based on a percentage of the revenue generated from production and/or sale of the electricity generated. Alternatively, a lease may provide for fixed payments based on each installed wind turbine or a megawatt capacity, or a combination which pays the greater of the royalty or the megawatt capacity. Like the initial development term of the lease, the operation term of the lease will typically include an escalation or increase (by term of years) of the royalty percentage that the lessor is entitled to receive. A wind lease will also provide for surface damage payments relating to but not limited to the installation of wind turbines, meteorological towers, roads, ingress and egress access, facilities, underground and above ground transmission lines, hunting and other damages.
If you have been a victim of an accident, you probably have a personal injury claim. A personal injury is any physical or mental injury to an individual resulting from another person’s harmful or negligent act. The act does not have to be intentional. A personal injury claim can involve many types of accidents including, but not limited to, the following: auto accidents, truck accidents, motorcycle accidents, construction accidents, and accidents in someone else’s property. If you have been injured as a result of someone else’s actions, Martinez, Franklin & Morales PLLC in Laredo, TX is equipped to help you decide if your claim is valid.
If you have been hurt as a result of someone else’s actions or involved in an accident, you should contact a personal injury attorney as soon as possible. Claims must be filed during a certain time period if not you may be legally prevented from recovery. The statute of limitations for personal injury differs from state to state. Accident victims who are thinking about hiring an attorney should contact Martinez, Franklin & Morales PLLC in Laredo, TX right away for a free consultation.
Hiring a personal injury attorney can often help maximize or improve your ability to receive compensation for your injuries and losses. Remember, insurance adjustors are far more experienced at negotiating a personal injury case than you are. A personal injury attorney can help you negotiate with insurance adjustors and prevent you from accepting an unreasonably low offer.
At Martinez, Franklin & Morales PLLC in Laredo, TX all our initial consultations for personal injury cases are free of charge.
Martinez, Franklin & Morales PLLC in Laredo, TX handles all personal injury claims on a contingent fee basis. In other words, we only charge a fee if we recover for you. Our fee is deducted from the total amount of the settlement or verdict we obtain for you.
Every case is different. The value of your case cannot be fully understood until it has been fully evaluated by our team. We work with each client individually to build a strong and successful strategy. After our team evaluates your claim, our team will seek economic damages (such as medical bills, car repair costs, and lost wages) and non-economic damages (such as pain and suffering and emotional distress) on your behalf. There are several factors that can change the value of your claim. Therefore, it is important to seek the guidance of an attorney with Martinez, Franklin & Morales PLLC in Laredo, TX.