How to determine if an oil and gas lease is recorded for your property
Landowners who are considering purchasing, or have already purchased a property can search their county Register of Deeds registry to determine if an oil and gas lease is recorded.
When you purchased your property, it is likely that the title company that provided your title insurance did not include any information regarding existing oil and gas leases. The reason for this is that mineral rights are an exception to title insurance, and therefore, the title company does not look for them in the public records. According to “What are the Exceptions to Title Insurance Coverage?”, “Both disclosed or undisclosed easements and rights of way are exempted from title insurance coverage. Grants of mineral and water rights over the land to companies or private developers are exempted from title insurance coverage in some states, particularly in the West, according to the American Bar Association.”
Because of these exceptions, a property could be purchased with an existing oil and gas lease and the buyer not be aware of it. Some properties may not be covered under title insurance so these properties would normally have an abstract which is a series of deeds that tracks the historical ownership of a property. You may want to review your abstract with a land professional to establish if it is complete.
How do you determine if your property is already subject to a recorded oil and gas lease? A search of the public records at the county register of deeds office is necessary. For example, in Oceana County, the public records are available online, or you can go to their office. You can search by name or by legal description. The mineral owner at the time is considered the Grantor (person granting the lease) and the Grantee (lessee) is the company. If you search by legal description, the quarter section, section, township and range are required. The more specific you make the legal description, the more focused the search becomes. For example, a search using the NE of Section 22, Township 15 North, Range 18 West will be more specific than using the section number only. Each county may have a slightly different web format to make the search.
The search will display the document number, the legal description, type of document (deed, O&G lease, farm lease, mortgage, etc.) and filing date, along with other filing information. You will be able to see the number of pages on the results screen before viewing the document. In Oceana County, in order to view the document there is a charge of $1.20 per page. While viewing the document, you can print one page or multiple pages at no additional charge.
A search for an oil and gas lease and revealed the lease was recorded, but not the Exhibit A or the Side Letter Agreement the lease stated were also part of the document. This indicates that alterations from lease negotiations were made utilizing a combination of exhibit A and a side letter and either or both parties wanted to keep them confidential.