2023 Q1

National Association of Division Order Analysts January / February / March 2023

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Volume MMXXIII • No 1

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Contents Feature

Articles

Modern Land Management.........................................................9 Legislative Update Pennsylvania New Royalty Requirements................................11 Legal Updates Pennsylvania Cross-Unit Drilling (Act 85)..............................12 Texas Granting Clause vs Exhibit: Citation 2002 Inv & Endeavor Res v Occidental Permian..........................13 Presumed Lost Deed Doctrine: Balmorhea Ranches v Heymann.............................................................14 Unclaimed Property – California..............................................16 National Niche...........................................................................17 2023 Institute - 50 Years in the Winner’s Circle.......................28

NADOA 2023 Officers President Norma Dooley 1st Vice President Vicki Danielson, CDOA 2nd Vice Presiden t Kimberly Bowman Treasurer Valerie Wible, CDOA Corresponding Secretary Kelly Sandoval, CDOA Recording Secretary Sonya Turner, CDOA

In This

Issue

The NADOA News Magazine is a quarterly publication of the National Association of Division

President’s Corner..............................................................1 Cob Webs............................................................................3 Decimal Points...................................................................4 Nominations for 2024 Board..............................................5 NADOA Symbols................................................................5 Certification....................................................................... 6 Membership Recognition Nominations...............................7 New Members...................................................................16 Counterpart Connection...................................................19 In Memory........................................................................25 Valerie Hill Al Worley Tribute Ellis Rudy Memorial Scholarship......................................27 NADOA Board & Committee Chairs................................36 Calendar of Events...........................................................37

Order Analysts P O Box 1656 Palm Harbor, FL 34682

Subscription: By membership to NADOA, at $75.00 per year.

News Magazine Editor Rona L. Erickson, CDOA Kaiser-Francis Oil Company Ronae@KFOC.net 918.491.4319

Graphic Design, Paul Beach

On the Cover: Louisville skyline Courtesy of Louisville Visitors Center

All rights reserved. No part of this publication may be reproduced/copied without written permission. Editorial disclaimer: The contents of this newsletter are intended for member use only and any other use without permission from the NADOA Board of Directors is strictly prohibited. Articles published herein represent the view of the authors; publication neither implies approval of the opinions expressed nor accuracy of the facts stated and NADOA accepts no liability for misprints.

President’s

Corner

Norma Dooley 2023 NADOA President

How do I begin to start this greeting for the New Year except that I am extremely excited about this being NADOA’s 50 th anniversary!! What an honor it is to serve as your President for 2023. NADOA is an association with a membership of extraordinary professionals who come together to share their knowledge of this industry with each other so we all may benefit to move ahead in our profession. Our industry has been hit hard over the past few years; although in 2022 we saw a surge of growth happening again. I hope this will continue throughout 2023 and thereafter. As most of you know by now, Institute will be held at the Omni Hotel in Louisville, Kentucky. I am sure some of you are asking why there; I originally sited Louisville back in 2012 and fell in love with the city, its history and charm. I knew that was where I wanted my Institute if I were ever elected as NADOA President and hope you will be able to see what I saw when you join us at Institute in September. We held our first Board and Institute Committee meetings the weekend of January 20 th . Planning is underway with some truly great ideas to make your experience at Institute an awesome educational experience and a GOLDEN anniversary to remember. A trio of FABULOUS Institute Chairs is guiding the Committee in their planning: Liz Fajen, Michelle Harris-Fairclough, CDOA, and Yoli Bazan, CDOA. The Committee is working hard putting together an OUTSTANDING program with excellent speakers, as well as planning a memorable Thursday evening event and some fantastic food to enjoy. I was so happy to see so many new volunteers this year eager to help put their stamp on Institute.

I just got back from attending NAPE in Houston. It was a great trip considering it took 6 hours to get there from Fort Worth on Wednesday due to the icy weather conditions here. But it was so worth it – Betty Davidson, Lisa Buffaloe and I had a ton of visitors at the NADOA booth and have at least 20 new members signing up. It was very interesting explaining to some people what NADOA and a DOA are. They were amazed at all the things we do. We were able to talk with many of the colleges that were there and gave them some information to use in their energy classes to help promote

G rowth T hrough E ducat i on - J anuary / F ebruary / M arch 2023

Division Orders. The winner of the Kentucky Bourbon basket drawing was Nikki Tramel with Point Energy. I found this letter from 1974 in our archives. I think several of you will find it FASCINATING how far we have come in 50 years; yet still learning and talking about the same issues that affect our job on a daily basis. Check out those prices!!

I close this greeting with a quote from Carla McCarty, our President in 2003, NADOA’s 30 th Anniversary year. The 2003 Institute was held in Salt Lake City, Utah and my first time attending an Institute meeting: “I hold in high esteem the NADOA leadership of yesteryear and look forward to a great 2003. My vision statement for 2003 is to communicate, promote and enhance the education opportunities for our members. Continuing our quest for education for our members can do no less than enhance our professionalism within the industry and further our careers.” Words I think anyone who holds this position should follow.

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for more info visit steptoe-johnson.com

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Cob Webs

recorded webinars: https://nadoa.wildapricot.org/page- 1709226 or by using the Webinar link in the Members Only section on the homepage. Please send suggestions for NADOA webinar topics/speakers to Webinar Chair, Yoli Bazan, CDOA, Yoli.Bazan@coterra.com . Details for upcoming NADOA Webinars can be found at: https://nadoa.org/news-events/ Steptoe & Johnson PLLC – Visit: https://www.steptoe-johnson.com and click on News for details. The Steptoe webcasts are recorded. To access previously recorded webcasts, go to www. Steptoe-Johnson.com and enter Webcasts in the search feature. Oliva Gibbs LLP – Energy Education Series: Visit www.oglawyers.com/ events for further information. If you are aware of other educational webinars, please advise NADOA News Magazine editor, Rona Erickson, CDOA (ronae@ kfoc.net ) or Associate editor, Susan Bradley, CDOA ( sbradley@ faulenergy.com ).

Educational webinars can be approved for 1 (one) CDOA certification point. NADOA webinars, Steptoe & Johnson PLLC webcasts and Oliva

Gibbs LLP webinars are pre-approved. Please check the certification page to determine if other webinars are pre-approved or need to be submitted for approval to the NADOA Certification Committee. Contact Sherry Werth for approvals ( srw6886@gmail. com ). Certification points should only be applied for after completing the event. If you are unable to attend an event due to unforeseen circumstances, it is an ethics violation to apply for the credit. NADOA – Webinar information and registration links will be posted on the website ( www.nadoa.org ). Webinars are free for NADOA members and $15.00 for non- members. NADOA members may use the following link to log in and register for upcoming webinars as well as listen to previously

G rowth T hrough E ducat i on - J anuary / F ebruary / M arch 2023 N at i onal A ssociation of D i v i s i on O rder A nalys t s

NADOA

Decimal Points

Remember to keep your NADOA directory information updated. Due to all the changes taking place in our industry and the world, it is more important than ever to maintain professional contacts and receive the educational benefits of membership in NADOA. NADOA online Job Bank has new postings. Visit http://www.nadoa.wildapricot.org/page- 662233

Regional Reporters

ABADOA

Steptoe & Johnson PLLC Ryan.daniels@steptoe-johnson.com

CAPDOA

OPEN

DADOA

Kelly Sandoval, CDOA Kelly.sandoval@sitio.com Lewis Box, CDOA lewis.box@gmail.com Emily Sheffield esheffield@oglawyers.com Rosanne Kidder Rosanne.kidder@pxd.com

DALWORTH

HADOA

2023 NADOA Article Deadlines

PBADOA

If you have a suggestion for someone to act as a Regional Reporter to help NADOA keep abreast of current legislation and legal issues for your region, please submit the name or the name of the firm . February 10..............................First Quarter April 21...............................Second Quarter June 16...................Special Institute Edition September 22.........................Third Quarter November 10.......................Fourth Quarter

SADOA

Dena Blevins Drblevins2014@gmail.com Jackie Clotfelter, CDOA jclotfelter@hannaoilandgas.com

Arkansas

Kansas

Amy Flaming Amy.flaming@chsinc.com

North Dakota Kimberly A. Backman

kbackman@crowleyfleck.com

New Mexico

Zachary P. Oliva zoliva@oglawyers.com Margaret Patton mpatton@pattonfirm.com

Louisiana

2023 News Magazine Team

Rona Erickson , CDOA Editor Susan Bradley, CDOA Associate Editor

Kim Bowman Associate Editor, Photography Michelle Davila Associate Editor

Joseph Carpini Associate Editor

Cheryl Hampton Associate Editor

Armando Lopez Associate Editor

N at i onal A ssociation of D i v i s i on O rder A nalys t s

The NADOA nominating committee is in search of candidates for the 2024 NEEDED: NADOA LEADERS FOR 2024! NADOA Board. This is a wonderful opportunity for volunteers who want to enhance their leadership skills, bring new and progressive ideas to the organization and work with some of the most dedicated and hardworking volunteers in our

profession. If you are interested in being a 2024 NADOA leader and are up for a very rewarding challenge or you have any questions regarding the open positions, please contact Michele Lawton at michele_lawton@swn.com.

NADOA SYMBOLS

NADOA’s original “stairstep” logo was developed when the association was founded.

Round NADOA logo came into use around 1983.

2008 update.

2013

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CANDIDATES FOR CERTIFICATION Publication of the following “Certified Division Order Analyst” applicant(s) fulfills the requirement as stated in the Voluntary Certification Policy, III C.2 which states: “…applicant’s name will be published in the NADOA Newsletter or other official publication of NADOA.” This allows the NADOA membership an opportunity to present objections to the certification of the applicant. Any objection to the certification of the applicant must be in writing and signed by a NADOA member or non-member who qualifies his knowledge and objection of the applicant. All such letters will be considered confidential and must be received by the NADOA Certification Committee at the following address within thirty (30) days following the last day of the month in which the Newsletter or other official publication of NADOA was published: NADOA Certification Committee P O Box 1656 Palm Harbor, FL 34682 If the objection warrants denial of the certification or temporary withholding of certification, the applicant will be notified by Certified Mail. CANDIDATES FOR CERTIFICATION

CANDIDATES FOR RECERTIFICATION Nichole Dwier – Arlington,TX Sunni Turney – Midland,TX

Bessie Andrews – Houston,TX Vivian Atchinson – Enid, OK Dale Bender – Houston,TX Cheryl Bigbee – Norman, OK Monica Bradley – Tulsa, OK Belinda Cathey – Houston,TX Linda Chance – Houston,TX

Teri Massena – Tulsa, OK Katherine Murrell – Houston,TX Jill Nelson – Oklahoma City, OK Rose Nguyen – Houston,TX Stephanie Nguyen – Houston,TX Elizabeth Nolan – Tulsa, OK

Brianna O’Keeffe – Denver, CO Charles Pearson – Claremore, OK Carlos Perez – The Woodlands,TX Terra Peterson – The Woodlands,TX Patricia Redding – Houston,TX Melanie Westbrook – The Woodlands,TX

Bonnie Didrickson – Englewood, CO Erica Hartnauer – Oklahoma City, OK Bonita Hill – Houston,TX Lisa Johnson – Tulsa, OK Thomas Killelea – Oklahoma City, OK

CDOAs with January renewal dates be sure to submit your 2022 employment credits using the Certification Self-Service portal on the NADOA website. This is a pre-approved drop down item. TIME TO RECERTIFY? If you are a CDOA whose certification expired January 1, 2023, you should have received your Re- Certification Application electronically by the end of January. If you did not receive your application, please contact Darryn McGee, CDOA at DMcGee@eag1source.com.

Congratulations to the following New CDOA!!

Somchay Fairbanks – Fort Worth,TX

N at i onal A ssociation of D i v i s i on O rder A nalys t s

2023 Nominations for NADOA Membership Recognition

I would like to nominate ___________________________________________________ for the Ellis Rudy Memorial Lifetime Achievement Award. This award is presented to the NADOA member who has exemplified the Division Order profession through demonstrated leadership contributions to the industry and the profession during his/her career. Please detail the nominee’s involvement in NADOA, the services they have performed and/or contributions they have made on page 2 (You may attach a separate sheet if necessary). Do you have a great mentor that you’d like to thank? Do you have an organization that is promoting the advancement of the Division Order profession? Consider nominating someone or an organization for an NADOA Membership Recognition Award.

I would like to nominate ___________________________________________________ for the NADOA Membership Recognition Corporate Award. Presented to the group or company that has contributed to NADOA’s growth and development, the Division Order profession, and/or the industry during the past year.

I would like to nominate ___________________________________________________ for the NADOA Membership Recognition Award for Education. This award is presented to the NADOA member who has dedicated their time and service to the betterment of Division Order Professionals through influence and mentorship.

I would like to nominate ___________________________________________________ for the NADOA Membership Recognition Award for Interaction. This award is presented to the NADOA member or affiliated organization who has had a positive community impact and extraordinary service and dedication in leading and promoting the Division Order profession.

I would like to nominate ___________________________________________________ for the Russell Schetroma Memorial Speaker’s Award. This award is presented to the individual who has made a difference in the lives of our members by contributing to the growth, development and education of our association or industry during the past year.

G rowth T hrough E ducat i on - J anuary / F ebruary / M arch 2023 Send nominations to: Member Recognition Awards Committee, c/o Jean Hinton (jean_hinton@oxy.com) Nominations will be accepted through July 1, 2023

2023 Nomination Form for NADOA Membership Recognition

2021 Nomination Form for NADOA Membership Recognition

I would like to nominate ___________________________________________ for the NADOA Membership Recognition Award for Interaction . This award is presented to the NADOA member or affiliated organization who has had a positive community impact and extraordinary service and dedication in leading and promoting the Division Order profession. Please detail the nominee’s involvement in NADOA, the services they have performed and/or contributions they have made (You may attach a separate sheet if necessary). Please detail the nominee’s involvement in NADOA, the services they have performed and/or contributions they have made (You may attach a separate sheet if necessary).

___________________________________________________ Signature ____________________________________________________ Please Print Name ____________________________________________________ Email Address

Send nominations to: Member Recognition Awards Committee, c/o Jean Hinton (jean_hinton@oxy.com) Nominations will be accepted through July 1, 2023

N at i onal A ssociation of D i v i s i on O rder A nalys t s

Modern Land Management

The current and future state of our industry demands us to “do more with less.” The facts are that budgets are shrinking, the demand for throughput is

A wise teacher once told me to, “Start with what you know and go from there.” I have utilized this approach many times over in my career. Start small and look for low hanging fruit, such as repeated manual data entry tasks. Review and document the process with your team, define the challenge, understand the stakeholders, and elevate solutions. For example, there may be a way to aggregate data into a tool that uploads into the software every night. By documenting the man hours it takes to complete the manual data entry tasks on an annual basis and the automation that will eliminate those man hours, the business case is created and often garnishes the support of management in order to execute the automation opportunity. Leveraging resources, both internally and externally, can be a challenge. One of the best methods I’ve found to manage work is to define and organize it. Measuring throughput, establishing Key Performance Indicators (KPIs), and creating visibility are critical in resource allocation. One of the most effective, proven ways to accomplish this is to implement the Kan Ban methodology. Kan Ban creates visibility by naming all of the work that must be accomplished, then organizing it into categories, examples listed below: • Backlog: Name and define all of the known work that needs to be accomplished • Planned work: Work with deadlines that help prioritize • Work in Progress (WIP): Work that is expected to be completed • Parking Lot: Work that cannot be completed due to a roadblock

increasing, and information silos and role separation are becoming extinct. With great challenges, great opportunities lie ahead for land professionals to have more well-rounded and fulfilling careers. Leveraging technology, processes and resources to produce more, be more efficient, and gain a higher return on investment for your company or team doesn’t always take the expected path. Each of these tools have the ability to create the desired results, but not well, if wielded alone. Technology and software are excellent tools when used in conjunction with good data and the bigger picture. In this case, technology is defined as a collection of modern software and reporting platforms that create palatable data and effective quality control measures that are the platform for creating visibility and innovative tools to make our jobs easier. Evaluating whether a software solution can integrate with other systems or data warehouses is just as important as evaluating the user interface. When assessing software, be mindful of existing workflows, the development time for customization, the implementation of software updates, the server size needed for processing power, and last, but not least, the data import and export process. It’s important to understand how malleable the reporting process is and what it takes to customize or create reports generated from the software system and the format in which the data can be exported. Process improvement is something that I believe we’ve heard ad nauseum over the past few years. It can be overwhelming and a challenge but is absolutely necessary to success in this modern era.

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• Completed Work: Work that has been completed

to small and mid-cap operators. We also provide land administration division order and lease records support services to assist in completing high value, time sensitive projec ts or augment day to day operations.

Once the quantity and the capacity limits of work for the team resources are defined, data is created that can be captured to reflect resource needs and build business cases to hire contract work or additional internal team members. Another way that resource allocation is evolving is through blended roles that are redefining traditional Land, Lease Records, Division Orders and Owner Relations roles. Together, all of the tools work to optimize our level of meaningful work. Despite all of the challenges we’ve overcome in the past couple of years especially, we have not only survived, but thrived. The way we perform our work has changed, but we have risen to the challenges and overcome them, working together to provide the energy our world depends on. Business per usual for this great industry. Carry on!

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Legislative

Updates Pennsylvania Adds New Royalty Payment Reporting Requirements and Deadlines for Unconventional Oil and Gas

Pennsylvania

On November 3, 2022, Pennsylvania Governor Tom Wolf signed Act 153 of 2022, which revises the Oil and Gas Lease Act’s provisions on required disclosures accompanying payments made to royalty owners from unconventional oil and gas wells. Beginning on March 3, 2023, unconventional oil and gas operators must provide production and sales information on a well- by-well basis. New reporting requirements include categorized royalty deductions with an optional summary format. If an operator does not provide the required payment information within 60 days after receipt of a written request from the royalty owner by certified mail, the owner may bring a civil action to obtain the information and to recover attorney fees and court costs. The Act also imposes new deadlines for royalty payments and penalties for late payments. Royalty payments must be made within 120 days of the first sale of oil and gas from a well, and thereafter within 60 days after the end of the month in which production is sold. Payments that are not made on time accrue an interest penalty at the legal rate, currently 6% per annum. Payments may be suspended only if the royalty owner lacks marketable title, if there is a bona fide dispute concerning the interest, or if the owner cannot be located. Unconventional oil and gas operators should take prompt action to review the Act and ensure that their royalty statements comply with the Act’s reporting requirements and timelines by the Act’s March 3 effective date. A full copy of the Act can be found here .

If you have any questions regarding these statutory changes or how they could impact you, please contact one of the authors of this alert. Copyright © 2022 Steptoe & Johnson PLLC. All Rights Reserved. Reprinted by permission. _______________________ Authors: Bridget D. Furbee Member Phone: (304) 933-8117 bridget.furbee@steptoe-johnson.com

Nathaniel I. Holland Member (814) 333-4906 nathaniel.holland@steptoe-johnson.com

These materials are public information and have been prepared solely for educational purposes. These materials reflect only the personal views of the authors and are not individualized legal advice. It is understood that each case is fact-specific, and that the appropriate solution in any case will vary. Therefore, these materials may or may not be relevant to any particular situation. Thus, the authors and Steptoe & Johnson PLLC cannot be bound either philosophically or as representatives of their various present and future clients to the comments expressed in these materials. The presentation of these materials does not establish any form of attorney-client relationship with the authors or Steptoe & Johnson PLLC. While every attempt was made to ensure that these ma- terials are accurate, errors or omissions may be contained therein, for which any liability is disclaimed.

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Legal

Updates Articles are not intended to be and should not be relied upon as legal advice or to establish any kind of an attorney-client relationship with the author.

Pennsylvania Court Upholds Cross- Unit Drilling Under Act 85

Pennsylvania

On January 24, 2023, the U.S. District Court for the Middle District of Pennsylvania held that Act 85 of 2019, which permits drilling horizontal oil and gas wells across existing drilling units, is not unconstitutional. Lessor Warner Valley Farm LLC sued Lessees SWN Production Co. LLC and Repsol Oil & Gas USA LLC, alleging that they breached the terms of a 2006 lease by drilling a well that crossed the boundary of the lessor’s unit. Warner Valley also sought a declaration that Act 85 was void under the Contracts Clauses of the U.S. and Pennsylvania constitutions. The District Court granted summary judgment to both lessees, ruling that Act 85 was valid and that the 2006 lease permitted cross-unit drilling. The District Court found that Act 85 did not impair the 2006 lease because the Act does not affect leases that expressly forbid cross-unit drilling. Thus, while Act 85 effectively lifts the 330-foot regulatory barrier to cross-unit drilling, it leaves the parties free to contractually prohibit cross-unit drilling. In addition, Act 85’s requirement that the lessees reasonably allocate production between existing units did not impair an existing provision of the lease. The District Court further held that even if Act 85 substantially impaired the 2006 lease, it was justified by its goals of reducing the economic costs and environmental impacts of oil and gas drilling. Finally, the District Court held that the 2006 lease did not forbid cross-unit drilling, citing the broad terms of the lease’s pooling and unitization clause.

If you have any questions regarding how this decision could impact you, please contact one of the authors of this alert. Copyright © 2023 Steptoe & Johnson PLLC. All Rights Reserved. Reprinted by permission. _______________________ Authors: Bridget D. Furbee Member Phone: (304) 933-8117 bridget.furbee@steptoe-johnson.com

Nathaniel I. Holland Member (814) 333-4906 nathaniel.holland@steptoe-johnson.com

N at i onal A ssociation of D i v i s i on O rder A nalys t s

Granting Clause vs. Exhibit: The Eternal Question of Assignment Scope

Texas

In Citation 2002 Inv. LLC & Endeavor Energy Res., L.P. v. Occidental Permian 1 , the El Paso Court of Appeals addressed the scope of an assignment of oil and gas leases. The issue was whether certain “deep rights” had been retained or conveyed in a 1987 assignment of oil and gas leases. The facts – which will likely be familiar to many oil and gas practitioners – concern broad language in the body of the assignment conflicting with a potential depth limitation in the exhibit. In 1987, Shell Western E&P, Inc. (“Shell”) assigned numerous leases, wellbores, and other interests in West Texas and New Mexico to Citation 1987 Investment Limited Partnership (the “1987 Assignment”). The 1987 Assignment included the following provisions (in relevant part):

leasehold estates described in Exhibit A; [and] All of Shell’s right, title and interest in and to any contracts or agreements . . . above or below certain footage depths or geological formations, affecting the property described in Exhibit A. It is the intent of this Assignment to transfer and convey to Citation . . . all rights and interests now owned by Shell . . . regardless of whether the same may be incorrectly described or omitted from Exhibit A . . .” (the “statement of intent”) The referenced Exhibit A scheduled numerous leases, some of which included in the tract description the phrase “down to 8,393 feet”. For example (emphasis added):

“All of Shell’s right, title and interest in and to the oil and gas fee, mineral and

IV.

VI.

TRACT DESCRIPTION

INTEREST ASSIGNED IN DESCRIBED TRACT 1.00000000 WI. 0.87500000 NRI. 0.50000000 WI. 0.43750000 NRI.

BEING SUBJECT TO THE FOLLOWING AGREEMENTS

Block A, A-271 L&SV Ry. Co. Survey

Gas Purchase Contract dated 12-14-79 with El Paso Natural Gas effective 02-25-80. Operating Agreement dated 03-01-66 with Shell Oil Company, Operator, and Southland Royalty et al. Non-Operators1

Sec 23: SE/4 and NW/4 down to 8,393 feet Block A, A-955

L&SV Ry. Co. Survey

Sec 28: E/2 SE/4 down to 8,393 feet

1 Id. at 12 2 Id. at 5. 3 Posse Energy, Ltd. v. Parsley Energy, LP, 632 S.W.3d 677, 693 (Tex. App.—El Paso 2021, pet. denied). 4 Piranha Partners v. Neuhoff, 596 S.W.3d 740, 752-55 (Tex. 2020). because of – and to the extent of – the relevant granting language 4 . A court will consider an instrument’s language as a whole in light of that controls the scope of the grant, regardless of the breadth of the granting language 3 . However, such an exhibit is only relevant

Shell’s interest later passed to Occidental Permian (“Oxy”), and Citation 1987 Investment Limited Partnership’s interest passed to Citation 2002 Inv. LLC (“Citation”) and Endeavor Energy Res., L.P. (“Endeavor”). In 2019, Oxy sued Citation and Endeavor to determine whether only the “Shallow Rights” (from the surface down to 8,393 feet) or all depths had been assigned in the 1987 Assignment. 2 As a general rule, when an exhibit is referenced to describe property being conveyed, it is the description of the interest in the exhibit

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these and other well-settled deed construction principles (and sometimes the relevant surrounding circumstances). 5 The goal is to determine the parties’ intent within the four corners of a document by harmonizing all provisions. 6 The Court agreed with Citation and Endeavor’s argument that the tract description column in Exhibit A to the 1987 Assignment does not contain depth-limiting language, but instead, merely contains “depth references.” In reaching this conclusion, the Court gave a great deal of weight to the statement of intent above. In particular, the Court emphasized the phrase “all rights and interests now owned by Shell” and “regardless of whether same may be incorrectly described or omitted from Exhibit A.” The plain language of this provision demonstrated an intent to convey everything Shell owned as of the date of the Assignment, as to all depths. 7 The Court further observed that the reference to “footage depths and geological formations” pertained only to third-party contracts and agreements. Thus, the Court asserted, it is reasonable to assume that the depth references

in Exhibit A were only intended to apply to these third-party agreements. Finally, the Court rejected Oxy’s novel argument that the reference to third- party agreements was a mere “Mother Hubbard” clause meant to clean up only small errors. Title was thus quieted in Citation and Endeavor as to all depths. 8 This case again evinces Texas courts’ commitment to interpreting the entirety of a deed as opposed to applying mechanical rules of deed construction. Although the general rule is that an Assignment’s exhibit controls its scope, a “statement of intent” can often trump this rule. This is especially true when the statement includes language like “all rights and interests now owned” or “regardless of whether the same may be incorrectly described or omitted herein.” We note that this article has been published prior to the deadline to file a petition for review with the Supreme Court of Texas. 5 Luckel v. White, 819 S.W.2d 459, 461 (Tex. 1991). 6 Id. 7 2022 Tex. App. LEXIS 9397, at 17. 8 Id. at 19-20.

The Presumed-Lost-Deed Doctrine: A Recent Texas Case Invokes an Obscure Rule

Texas

It is common to encounter old gaps in Texas land titles. In many instances, it is reasonable to assume that these gaps have been cured by adverse possession. 1 However, when gaps in the chain of title are very old (such as before 1900), it may be difficult to prove the elements necessary to perfect title by limitation. However, you may be able to fall back on an arcane legal concept known as the Doctrine of Presumed Lost Deed. The Lost Deed Doctrine (sometimes called Title by Circumstantial Evidence), is a common-law form of adverse possession. 2 It is used when an individual or entity does not have complete record title “but has claimed ownership for a long time.” 3 The Doctrine

applies to “ancient” transactions and Texas courts have noted that without it “numberless valid land title could not be upheld.” 4 The basic idea is that the Doctrine presumes the existence of a lost deed in favor of a party who has owned real property for an extended time. As far back as 1887, the Supreme Court of the United States described this “lost deed” presumption as follows:

“The general statement of the doctrine . . . is that the presumption of a grant is indulged merely to quiet [title to] a long possession which might otherwise be disturbed by reason of the inability of the possessor to produce the muniments of title which . . . have been

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there was no actual gap or defect, and a prerequisite for proving the Lost Deed Doctrine applies as a matter of law is “undisputed evidence establishing a gap or defect in ancient deeds.” 15 As a result, Balmorhea Ranches, Inc. was unable to prevail on its Lost Deed claim. The Balmorhea court took a typically narrow view of the Lost Deed Doctrine. It held that the doctrine only applies to “ancient” gaps in title – apparently defined as gaps arising prior to the start of the Twentieth century. An actual reason for the gap must also be alleged, such as: (i) a muniment of title being lost, destroyed, or stolen; (ii) a party proving they were owed but never obtained a muniment of title; (iii) a fraudulent transfer convoluting the title; or (iv) a clerical error creating irregularities. Therefore, it appears that, at least with regard to gaps in title occurring after the turn of the Twentieth century, one will have more success quieting title through adverse possession. Another takeaway is that if you are going to assert the Lost Deed Doctrine, you should probably ensure that the deed is actually “lost”! 1 A standard adverse possession claim will assert that a party has been in “hostile, actual, exclusive, open, notorious, and continuous” possession for a period of at least ten years. Tex. Civ. Prac. & Rem. Code § 16.026. Note that a limitation title is not marketable prior to a final adjudication because it requires proof of factual elements. 2 Haby v. Howard, 757 S.W.2d 34, 39 (Tex. App.—San Antonio 1988, writ denied). 3 See Purnell v. Gulihur, 339 S.W.2d 86, 92 (Tex. App.—El Paso 1960, writ ref’d n.r.e.). 4 Magee v. Paul, 221 S.W. 254, 256-57 (Tex. 1920). 5 Fletcher v. Fuller, 120 U.S. 534, 551 (1887). 6 570 S.W.2d 876, 879-80 (Tex. 1978). 7 Id. 8 See Magee, 221 S.W. at 255; Adams v. Slattery 295 S.W.2d 859, 861 (Tex. 1956). 9 Adams, 295 S.W.2d at 861. 10 See e.g., Miller v. Fleming, 233 S.W.2d 571, 572-73 (Tex. 1950). 11 In this case, the 1830s. Page v. Pan Am. Petroleum Corp., 381 S.W.2d 949, 952 (Tex. App.—Corpus Christi 1964, writ ref’d n.r.e.). 12 2022 Tex. App. LEXIS 7840, 5-6. 13 Id. at 17. 14 Id. 15 Id. at 19.

lost, or which he . . . neglected to obtain, and of which the witnesses have passed away, or their recollection of the transaction has become dimmed or imperfect” 5 Although the Lost Deed Doctrine is usually a question of fact, it may be established as a matter of law in cases where the deeds are ancient enough and the evidence is undisputed. For example, in the 1978 case of Howland v. Hough, the plaintiff presented a continuous chain of title, except for a 33-year gap between an 1845 patent and an 1878 deed. 6 The Texas Supreme Court found that the Lost Deed Doctrine applied as a matter of law, due to the fact that the conveyances were ancient and the successor of the original patentee was unable to produce any evidence of a competing claim made by the patentee. 7 Of particular relevance is that almost all of the cases successfully applying the Lost Deed Doctrine deal with gaps of title arising in the 1800s. These gaps may exist because a deed was lost, destroyed, or stolen. 8 They may exist because the courthouse containing the records burned down. 9 There are other cases where fraudulent conveyances or clerical errors made the title so confusing that ownership was impossible to determine. 10 There are even cases applying the Lost Deed Doctrine to the period where Texas land could be sold orally, with no written deed being necessary. 11 Fast-forwarding to modern times, in the 2022 case of Balmorhea Ranches, Inc. v. Heymann, a 1919 deed conveying various tracts of land failed to explicitly describe a 200-acre parcel in Reeves County, Texas. 12 The successors to the original grantor and grantee disputed ownership pursuant to this deed, while the grantee’s successors claimed this 200-acre tract had been inadvertently omitted from the 1919 deed. Heymann (as the grantor’s successor) argued that she owned a portion of the minerals through various layers of intestacy and testacy. Balmorhea Ranches, Inc. (as the grantee’s successor) argued that despite the 1919 deed omitting the 200 acres in controversy, it owned the minerals under the Lost Deed Doctrine. The El Paso Court of Appeals first noted that there was no dispute of title up to 1919. Thus, per the Court, the facts did not involve an “ancient” document for purposes of the Lost Deed Doctrine. 13 Further, the deed was properly recorded in Reeves County and therefore could not be considered “lost.” 14 Moreover,

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CONTACT If you have any questions regarding these case law updates or suggestions for topics to be covered in future issues, please call our office at 713-229-0360 or contact:

The content of this publication and any attachments are not intended to be and should not be relied upon as legal advice or to create a lawyer-client relationship. © 2023 Oliva Gibbs LLP. All rights reserved. This publication may qualify as “Attorney Advertising” requiring notice in some jurisdictions. Houston (principal office): 815 Walker St., Suite 1140, Houston, Texas 77002, 713-229-0360 | Columbus: 580 North Fourth Street, Suite 260, Columbus Ohio 43215, 614- 349-4525 | Lafayette: 412 West University Avenue, Suite 203, Lafayette, LA 70506, 713-229-0360 | Oklahoma City: 301 Lilac Drive, Suite 250, Edmond, OK 73034, 405-395-2615 | Modifications have been made to proposed regulatory changes allowing the Controller to continue to work with third-party auditors in order to locate, identify, and collect unclaimed property. You may view the proposed amend- ments on our website. The State Controller’s Office accepted written comments on the proposed changes until January 25, 2023. Writ- ten comments received by the deadline that pertain to the indicated changes will be reviewed by the Board and will be summarized and responded to in the Final Statement of Reasons.

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Pursuant to the requirements of Government Code sec- tion 11346.8(c) and section 44 of Title 1 of the California Code of Regulations, the California State Controller’s Of- fice hereby provides notice of changes made to proposed regulations at Article 6, § 1200 et seq., to Title 2 – Ad- ministration; Division 2 -Financial Operations; Chapter 2 -State Controller; Subchapter 8 -Unclaimed Property Law; of the California Code of Regulations.

NADOA Welcomes The Following New Members:

Pioneer Natural Resources Patricio Carrasco James Suchecki Red Willow Production Company Ryan Kruthaupt

EOG Resources Inc Sandy Salazar

Civitas Resources Christine Cline Erica Sandoval Comstock Resources Amy Franks Krista Anne Miller

Independent

Heather Johnson

Independent

Nikki Savage

Rees-Jones Oil & Minerals Stephanie Kinsman

Confluence Resources LP Malea Broyles

Land & Mineral Management of Appalachia, LLC Timothy Greene

Sage Natural Resources, LLC Cindy Juby

Enerplus Resources (USA) Corp Oksana Orlova

PDC Energy

Fredrick Turner

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National Niche Supplemental Environmental Impact Statement Prepared for Gulf of Mexico Lease Sales 259 and 261 Pursuant to the Inflation Reduction Act of 2022, the Bureau of Ocean Energy Management (BOEM) is required to hold two Gulf of Mexico oil and gas lease sales: Lease Sale 259 by the end of March and Lease Sale 261 by the end of September 2023. On January 9, 2023, BOEM announced it has prepared a Final Supplemental Environmental Impact Statement (EIS) to inform the lease sale process. • Final EIS • Note to Stakeholders: BOEM Issues Final Environmental Analysis for Upcoming Gulf of Mexico Oil and Gas Lease Sales (1/9/2023) ****************************************************** Judge Dismisses Big Oil Conspiracy Lawsuit The anti-trust suit, filed in a California court, alleged the Trump administration and U.S. oil producers conspired with Russia and Saudi Arabia in 2020 to keep oil and gasoline prices high. Among defendants named in the lawsuit were the American Petroleum Institute, Chevron Texaco, ExxonMobil, Occidental Petroleum, Phillips 66, Devon Energy and Energy Transfer. When the lawsuit was dismissed, U.S. District Judge Jeffrey White wrote that “The complaint simply does not allege sufficient plausible facts…” to proceed, and he barred the plaintiffs from re- filing an amended version of the suit.The judge also wrote:“The court lacks jurisdiction over a complaint that ‘requires an inquiry into’ whether foreign nations entered an agreement with defendants at the behest of the President of the United States.” ****************************************************** Louisiana Ruling Sides with Carbon Capture & Storage Project In December 2022, Federal Judge Shelly Dick of the Middle District Court of Louisiana ruled

in favor of a motion for a preliminary injunction against the moratorium imposed by Livingston Parish’s government over building test wells and seismic testing in the area and denied a motion from Livingston to dismiss the lawsuit.The federal judge sided with Air Products, ruling the company can move forward with plans for test wells to store carbon dioxide emissions under Lake Maurepas, after a local ordinance aimed to block the project. Air Products can now proceed with plans to drill Class V injection wells and open a $4.5-billion hydrogen manufacturing complex in Ascension Parish, Louisiana by 2026 that would store its carbon output a mile beneath Lake Maurepas. ****************************************************** Permian Basin Smog Plan Deferred by Biden Administration The Environmental Protection Agency (EPA) is not currently actively considering labeling parts of the Permian Basin as violating federal air quality standards for ozone; however, the issue could be revived. In an agenda of planned regulations released in January, the administration deemed the measure “inactive,” indicating finalization of a plan is not expected in the next six to twelve months. Per EPA’s emailed statement,“If EPA decides to advance this action, EPA would initiate the redesignations process by sending a notification letter to the appropriate state governors soliciting their input and recommendations.As part of a potential redesignations effort, EPA would also provide an opportunity for public comment on the action.” The smog created in the Permian Basin is being attributed to violations of federal air quality standards for ozone, which forms when ground level organic compounds and other air pollution from sources such as tailpipes, smokestacks and oil wells react with sunlight. Oil producers lobbied for a slowdown on the policy, but this deferral was viewed as detrimental to public health by conservationists. Texas Oil and Gas Association president Todd Staples stated,“Carbon dioxide,

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Factors such as the war in Ukraine, which has led to sanctions against Russia, China’s lifting of Covid policies and natural disasters are also playing a role in the market forces of supply and demand. Global recession is still viewed by some market analysts as a matter of when rather than if it will occur. ****************************************************** BLM recommends smaller footprint for Willow project to ConocoPhillips In its final supplemental environmental impact statement (SEIS), the U.S. Bureau of Land Management recommended to ConocoPhillips to eliminate one of its five planned drill sites for the proposed Willow development in Alaska’s National Petroleum Reserve and defer another to reduce the impact on migratory birds and caribou.The SEIS, which required additional environmental analysis, was conducted after a federal district court vacated a prior approval in August 2021. Willow would affect the environmentally sensitive Teshekpuk Lake area, as well as freshwater use and the length of pipelines, gravel and ice roads. BLM recommendations notwithstanding, the Department of the Interior said in a press release that it had “substantial concerns about the Willow project … including direct and indirect greenhouse gas emissions and impacts to wildlife and Alaska Native subsistence,” so final approval of the project remains uncertain. ****************************************************** Cause of Keystone Pipeline December 2022 Leak Determined TC Energy released an independent lab analysis in February that revealed the pipeline rupture in Kansas was caused by a combination of a faulty weld connecting 2 sections of the 36-inch pipe, and “bending stress fatigue”. Over 500,000 gallons of crude oil spilled down a hill and into a creek, triggering the entire pipeline to be shut down. Remediation is underway.

methane, and other related emissions have been declining substantially over the last few years and operators are focused on continued good environmental stewardship.” ****************************************************** Washington May Find Refilling the SPR a Challenge Over 221 million barrels of oil were drawn from the Strategic Petroleum Reserve (SPR) in 2022, bringing it to its lowest level in four decades according to data from the U.S. Energy Information Administration. The Department of Energy (DOE) planned to establish a pilot program in February 2023 to purchase 3 million barrels; however, rejected the first offers on the grounds that they failed to meet requirements or were too expensive. The DOE hoped that the price of oil would settle at about $70 per barrel for the pilot program to fix a price at which sellers could make future deliveries. A statement from the DOE advised: “DOE will only select bids that meet the required crude specifications and that are at a price that is a good deal for taxpayers.”“Following review of the initial submission, DOE will not be making any award selections for the February delivery window.” Even at $70 per barrel, the DOE may not have enough funding to completely refill the SPR. ****************************************************** Turbulent Year Predicted for Oil and Gas Because of decarbonization plans, governments have been caught between commitments to transition away from fossil fuels and attempting to encourage more oil and gas production, which would also increase energy security. Record profits posted by oil and gas companies in 2022 led European governments to impose windfall taxes. In the face of competing priorities, companies are reluctant to increase production and have been cautious with investment decisions. In the U.S., the Biden administration has repeatedly called for oil and gas companies to increase production, which is at odds with administration plans to reduce emissions.

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