Old Rules Are Learned Anew In Louisiana Servitude Case

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http://www.energyandthelaw.com/files/2013/08/Les-Miles1.jpgOccasionally in my litigation experience I’m reminded of time-honored rules of law.  Often I’m pleased, sometimes I’m not. So it was, I assume, for the parties in Midnight rilling, LLC v. Triche et al .

The Rules

In Louisiana law, operations and production of minerals sufficient to interrupt prescription of a mineral servitude for nonuse within a unit can interrupt the running of prescription on all tracts within the unit.

But there is a catch.  Drilling and production do not interrupt prescription of a servitude encumbering the surface location if the operations are for the sole and exclusive purpose of discovering and producing minerals from property not subject to the servitude.

Parol evidence cannot be used to prove title to any mineral right, nor to prove any claim for or any interest in the revenues from a mineral right. In Midnight Drilling, whether a well was produced on a unit basis could not be proved by parol evidence. The claim failed because it was not supported by a writing.

The Facts

Triche owned two tracts of land in Terrebonne Parish, separated by the Intracoastal Waterway. Cole’s mineral servitude covered both tracts. Neither party had mineral rights under the canal. The Cole # 2 well had been operated as a lease well, apparently on leases granted by Triche and Cole covering both tracts. The problem for Cole was that, although the surface location was on the North tract, the bottomhole was on the South tract.

Triche asserted that 10 years had elapsed since creation of the original servitudes during which no operations for the benefit of the servitude tract were conducted. Cole asserted that both servitudes had been preserved by production and/or operations, arguing that the parties to the lease acted in such a manner that the Cole #2 well was produced on a unit basis.

Cole’s evidence was insufficient as a matter of law. Whether a well is produced on a unit basis cannot be proved by parol evidence outside of the lease. Invoking the parol evidence rule, the court found that a voluntary unit was not established for the North tract, nor were there operations on the Cole #2 well such that prescription was suspended from accruing on the Cole’s mineral servitude for the North tract.

The Point

Non-unit well operations and production must occur on the actual land burdened with the servitude in order to interrupt prescription. The surface location of the Cole # 2 well did not determine whether the operations or production associated with the well constituted an exercise of the mineral servitude.

It’s that special time of the year: football season. I dedicate this musical interlude to our Aggie friends who will be visiting Baton Rouge in November.

*Photo text: Les Miles encourages Vidal Alexander to subscribe to Energy and the Law.

Topics:  Minerals, Natural Resources, Resource Extraction

Published In: Energy & Utilities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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