National Association of Division Order Analysts October / November / December 2023
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Volume MMXXIII • No 4
Contents Feature
Articles
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
Can Your Title to Texas Lands be Stolen?........................14 Gathering is Not Transportation (DCOR v. U.S. Dept. of Interior).........................................18 Self v. BPX & Post-Production Costs in Louisiana.......20 Toma v. Devaul – Ohio Dormant Mineral Act................23 Alternatives & New Technologies........................................24 National Niche............................................................................27
Recording Secretary Sonya Turner, CDOA
In This
Issue
The NADOA News Magazine is a quarterly publication of the National Association of Division Order Analysts P O Box 1656 Palm Harbor, FL 34682 Subscription: By membership to NADOA, at $75.00 per year. News Magazine Editor
President’s Corner.............................................................1 Decimal Points....................................................................3 Belated Institute Thank You...........................................4 Certification......................................................................... 4 Cob Webs...............................................................................5 2024 Institute.......................................................................6 Counterpart Connection..................................................9 New Members....................................................................13 2023 NADOA Board & Committee Chairs................28 2024 NADOA Board & Committee Chairs................29 Calendar of Events..........................................................31
Rona L. Erickson, CDOA Kaiser-Francis Oil Company Ronae@KFOC.net 918.491.4319
Graphic Design, Paul Beach
On the Cover: Sunset on the Ohio River Courtesy of Luanne Johnson, CDOA
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
I cannot find the words to describe this past year - it came and went far too fast. Serving as your President during NADOA’s 50th Anniversary has been such an honor, privilege and joy, I thank you all for the opportunity. It has truly been a rewarding year filled with such special memories of the past 50 years of NADOA. After reading various comments made on the Institute survey and from talking with some of the members I met during our time in Louisville, I’d like for you to know that we take each comment, complaint and suggestion under consideration; we are here to work for you. Please keep in mind, the board members are volunteering their time, which can be very time consuming, to make our organization one of the best. The realization is, we’ll never please everyone but it is our job to do our best for the entire organization. I’d like to ask you, our membership, to take the time and let your NADOA board know what you see that might help us in going forward in the future. Send us your idea, how you would go about implementing it and whether you would be willing to volunteer to help with the process. The NADOA board is here to help with the growth and education of our membership. The Board is currently working on the Salary Survey which will be coming out in the first quarter of 2024 as the last one was sent out in 2020. We try to do this every 3 or 4 years to keep up with the changes and updates in our profession. When you receive it, please take the short 2 or 3 minutes to complete the survey and submit the information to Wild Apricot. The results will be posted on the website in the Members Area under “Compensation Survey” once all have been completed. You must be a NADOA member to access the survey . Many thanks to our Administrator, Chris Tucker, for all his hard work in getting this survey into a format that would be most helpful to the members. NADOA is extremely grateful to Chris for all the hard work he does for us behind the scenes. At the November 4 Transition Meeting, the Board voted to raise Membership dues from $75.00 to $100.00 starting January 2024. The last time dues were raised was 2008 which meant starting in 2009 dues were $75.00. That’s 15 long years with no change.
With the year coming to a close, as NADOA President, I want to thank all the board and committee members for their hard work this year. What a great group of professionals to work with. Vicki Danielson is the incoming President for 2024 and I look forward to another successful year for NADOA in Oklahoma City. I encourage all of you to volunteer and get involved, whether it be with NADOA or your local association, to see how the process works. You’ll be amazed how rewarded it makes you feel to know that you helped in the planning. You’ll meet new people, make great friendships, and for some, walk away feeling like you’re part of a big wonderful family.
As I close this letter, I wish you all a joyous and festive holiday with your family and friends on Thanksgiving, a blessed and Merry Christmas and a Happy New Year.
My Blessings
With a grateful heart Norma Dooley
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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. 2024 News Magazine Deadlines 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. First Quarter.....................................February 9 Second Quarter.................................... May 17 Special Institute Edition........................July 12 Third Quarter....................................August 23 Fourth Quarter............................November 15 NADOA online Job Bank has new postings. Visit http://www.nadoa.wildapricot.org/page-662233 ADVERTISE WITH NADOA Now is the time to start thinking about advertising your business or company in our 2024 NADOA Newsmagazine. Mineral buyers, attorney and division order services: the newsmagazine is a great way to get your business name out to NADOA members. If you or your company are interested, please contact Cheryl Hampton at champton@limerockresources.com.
Regional Reporters
ABADOA
Steptoe & Johnson PLLC Ryan.daniels@steptoe-johnson.com
CAPDOA DADOA
OPEN
Kelly Sandoval, CDOA Kelly.sandoval@sitio.com
DALWORTH Lewis Box, CDOA lewis.box@gmail.com HADOA Emily Sheffield
esheffield@oglawyers.com Rosanne Kidder Rosanne.kidder@pxd.com
PBADOA
SADOA
Dena Blevins Drblevins2014@gmail.com Jackie Clotfelter, CDOA jclotfelter@hannaoilandgas.com Amy Flaming Amy.flaming@chsinc.com Kimberly A. Backman kbackman@crowleyfleck.com
Arkansas
Kansas
North Dakota
New Mexico
Zachary P. Oliva zoliva@oglawyers.com Margaret Patton mpatton@pattonfirm.com
Louisiana
2023 News Magazine Team Rona Erickson , CDOA Editor Kim Bowman Associate Editor, Photography Cheryl Hampton Associate Editor
Michelle Davila Associate Editor
Joseph Carpini Associate Editor Armando Lopez Associate Editor
Susan Bradley, CDOA Associate Editor
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The thank you to the wonderful Institute greeters was inadvertently omitted from the Third Quarter NADOA Newsmagazine. Apologies to these volunteers – your willingness to help was very appreciated.
Jackie Powell – Plains Marketing, LP Rona Erickson – Kaiser-Francis Oil Company Norma Dooley – Wagner Oil Company Jennifer Smith – Murchison Oil & Gas, LLC Lewis Box – Riverbend Energy Group Mary Sons – Independent Melissa Fontana – Iberia Management Systems Inc Linda Buckman – Steptoe & Johnson Jamie Meyer – The Williams Companies Janet Cavanah – Pak Energy Catrina Brewer – Consolidated Asset Management Services (CAMS)
We look forward to working with you in Oklahoma City, Oklahoma on October 2-4, 2024!! Thank you again for all your help!! Sonya Turner & Connie Wilcoxson Co-Chairs – Volunteers/Speaker Packets
We would like to thank the following members for volunteering to be a Greeter at NADOA’s 50th Institute in Louisville, Kentucky!!
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
Tyrell Allen – Houston, TX Amy Galaviz – Houston, TX Paula Hernandez – Dallas, TX
Lakeiva Noel – Houston, TX Hannah Thompson – Houston, TX
CONGRATULATIONS TO THE FOLLOWING NEW CDOA!!
Jason Alexander – Houston, TX
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Cob Webs
speakers to webinars@nadoa.org . Details for upcoming NADOA Webinars can be found at: https://nadoa.org/news-events/ The webinar committee is looking for volunteers. Opportunities include: creating webinar flyers, contacting speakers before a webinar event to obtain biographies and presentations, help modernize NADOA’s GoToWebinar site. Please email webinars@ nadoa.org if you are interested. The 2024 Webinar Co-Chairs, Gordon Gallet, Heather Lister and Jamie Meyer would love to hear from you! 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 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/
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The first Institute committee meeting will be held in February 2024 in Houston, TX. A Go to Meeting link will be available for those who are unable to attend in person.
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NADOA 2024 ANNUAL EDUCATIONAL INSTITUTE OMNI Hotel – Oklahoma City, OK October 2-3, 2024
SPONSOR DONATION FORM Thank you for your sponsorship. Your donations help with the cost of our speakers, hospitality functions, conference publications, including a compilation of our speakers’ presentations, as well as to cover general fund- administrative costs. We have attached suggested contribution levels. However, please keep in mind that these are suggestions – all contributions will be recognized. This financial support helps reduce the costs to all attendees and allows NADOA to present a professional, quality educational event . If you would like to apply your sponsorship to a specific category, you may indicate that preference below.
CATEGORY
AMOUNT
General Donation (includes administrative costs, door prizes, etc.) Education / Speaker Hospitality Functions Publications Golf Tournament
SPONSOR INFORMATION
Company Address
City, State, Zip Email Address Phone Number Contact Person
G rowth T hrough E ducat i on - O c tober / N ov ember / D e c ember 2023 7 To assure that your name will be published in the NADOA Institute Brochure, please return your donation, along with this form to NADOA no later than July 1, 2024. Corporate sponsorships received after this date will be published in subsequent publications. PLEASE RETURN THE FORM AND CONTRIBUTION TO: NADOA PO BOX 1656 Palm Harbor FL 34682 For questions , please contact: Vicki Danielson Melissa Fontana Corporate Donations Co-Chair Corporate Donations vdanielson@att.net Melissa@iberiamansys.com
Any individual/Corporation making a $5,000 donation by July 1, 2024 will receive 1 free registration for conference.
Any individual/Corporation making a $10,000 donation by July 1, 2024 will receive 3 free registrations for conference
The FIRST individual/Corporation making a $10,000 donation before July 1, 2024 and waives the 3 free registrations will have the opportunity to stay in the Presidential Suite at the OMNI from October 1-3, 2024 for $199.00 per night.
Donation Categories
$10,000+
BLACK Gold
$5,000-$9999
FARM ON! Feeding the World
$3,500-$4999
Indian Spirit
$2000-$3499
Tornado Alley
$1000-$1999
Queen of Country
$500-$999
Cowboys/Boomer Sooner!
Up to $499
Rip Roaring Rodeo
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Counterpart
Connection
Lola Strickland Local Association Coordinator
CAPITAL ASSOCIATION OF PROFESSIONAL DIVISION ORDER ANALYSTS (CAPDOA) Association based in the Oklahoma City, OK Area
APPALACHIAN BASIN ASSOCIATION OF DIVISION ORDER ANALYSTS (ABADOA) Association Based in the Pittsburgh, Pennsylvania Area Serving NY, OH, PA, WV (Inactive)
………………………………… ARKLATEX ASSOCIATION OF DIVISION ORDER ANALYSTS (ALTDOA) Association based in the Shreveport, LA Area (Inactive) …………………………………
We are so excited to learn that the 2024 NADOA Institute will be held in our hometown of OKC! We are hoping to have more member involvement along with more hand in hand participation with whatever NADOA may need from our local chapter.
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We will wrap up 2023 with our Christmas meeting on December 12 with Preston Newton from The Title Law group presenting on the Ohio MTA. We will have our year end 50/50 raffle and vote to decide on which charity we will be presenting this year’s proceeds. For more information regarding CAPDOA, please visit our website at www.capdoa.org. ………………………………… DALWORTH ASSOCIATION OF DIVISION ORDER ANALYSTS (DALWORTH) Association serving the Dallas/Fort Worth, TX Area
We had our Fall Seminar at Comstock Resources in Frisco, Texas on Thursday, November 2, 2023, with 50 members and guests attending. Our line-up was top-notch, and we had a surprise visit from San Diego, CA, from Quin Moore at KPMG. Andy Graham had come all the way in from Pittsburgh, PA. From Houston, TX, Stephen Newton, and Colby Tiffee. Then, our local board members Melanie Finnegan and this year’s DALWORTH President, Eli Murray rounded out the program.
Using Pivot Tables and Power Queries by Melanie Finnegan
Unclaimed Property: Audits & Developments by William King and Quin Moore
NPRI’s: The Fixed v. Floating Landscape After Van Dyke v. The Navigator Group by Stephen Newton
Oil & Gas Marketing, Commodity Markets Update, and Energy Transition Reality Check by Colby Tiffee
Ethical Obligations for Land Professionals: A Comparative Approach by Andrew Graham
Lease Provisions (and how they impact the DOA) by Eli Murray
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For more information regarding DADOA, please visit our website at www.dadoa.org. ………………………………… HOUSTON ASSOCIATION OF DIVISION ORDER
DALWORTH – CALENDAR OF EVENTS – 2023 TBA Christmas Party (Location between Dallas and Fort Worth) For information regarding DALWORTH, please visit our website at www.dalworth.wildapricot.org. ………………………………… DENVER ASSOCIATION OF DIVISION ORDER
ANALYSTS (HADOA) Association based in the Houston, TX Area
ANALYSTS (DADOA) Association based in the Denver, CO Area
HADOA is moving and grooving as we come to the end of the year. Elections are underway and the holidays are upon us! HADOA wrote their Christmas wish list and sent it to Santa, but have you? Our next Holiday luncheon will be on December 13 benefiting BEAR, an organization that provides hope and help for at-risk and CPS-involved children and their caretakers in the greater Houston area. This is a great organization so HADOA is asking everyone to come out to the Holiday luncheon and buy some tickets to win some great prizes. On that note, we are asking anyone willing to donate a raffle basket to contact us at admin@hadoa.org. All proceeds for the raffle will go directly to BEAR so join us as we help make a difference. As stated earlier, HADOA elections are just around the corner and the 2024 HADOA Board (of the people who are known) are already at work preparing for luncheons and speakers and thinking of ways to help keep the organization alive and help our members with educational opportunities and networking events, because without our members, we wouldn’t be where we are so HADOA would like to thank all our members for their support throughout 2023. We ask that you continue to support HADOA by renewing your membership in 2024; many great luncheons are already planned so you do not want to miss out. Finally, as 2023 comes to a close, I would like to thank the 2023 Board of Directors for keeping the organization going and for all the hard work and dedication that they gave. This leaves me with my final words for HADOA and the membership. I have given 4 years of my life and my time to HADOA, and I wish nothing but the best for the future leaders. There will be times when you get angry, times when you want to give up, and times when you just ask yourself, “What am I doing?” During those times, I want you to close your eyes, take a deep breath, and remind yourself that you are a leader of an organization and although you may not think
DADOA held its joint seminar with DALTA on October 19, 2023. There were a variety of speakers and topics including Daniel Franklin (Oil and Gas Law – Mineral Deeds), Cori Peth (Texas Allocation Wells), Lyle B. Brown & Diana S. Prulhiere (How to Deal with Corporate and Personal Bankruptcy in your Day-to-Day Work), Doug Potter (Shut-In Clauses), Erica Honeycutt (DOI Calculation Considerations). It was a very comprehensive and thorough presentation of the topics. We always aim to provide topics that our members can take back to their desks and incorporate into their daily tasks. DADOA is preparing the 2024 ballot and looks forward to the coming year. Our last Board Meeting of this year was held at the offices of Enerplus on November 8, 2023. The 2023 officers of DADOA are: President-Sandi Rupprecht, Vice President-Wendy Hopkins, Secretary-Alicia Padilla, Treasurer-Allison Blancett, Directors, Troy Alsobrook, Kristina Gor & Liz Olds, Board Advisor-Leslie Jayne, and DADOA’s Director Representative to NADOA-Sandi Rupprecht.
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to volunteer for PBADOA and to ensure we provide quality educational opportunities for our members. In October, we welcomed Bill Keffer from Texas Tech School of Law. His topic, “Let’s Cancel Oil & Gas-No, Wait..” was very insightful. He illustrated what life would be like without oil and pointed out the top energy sources are still oil and gas. We appreciate him taking the time to present to us. On November 15, we met with PALTA to hear from Joel Parsons with Davis, Gerald & Cremer. He presented on: “Overriding Royalty Interests – No Longer the Clay Pigeons of the Texas Oil and Gas Industry?” This topic will cover the effect and implications of the recently enacted Bad Faith Washout of Overriding Royalty Interest in Oil and Gas Lease statute. We appreciated hosting Joel, and hearing what he had to say. Lastly, our December social is scheduled for December 13. This year, we will be donating to the Permian Basin Animal Advocates to help raise money towards their monthly vet bill at Town and County Vet. They accumulate $15K to $20K per month on their fostered and rescued animals. We might even get a visit from a few of these fuzzy friends. We are excited to celebrate another year with our members with games, prizes, and fellowship. Hope everyone has a blessed and safe Christmas. For more information regarding PBADOA, please visit our website at www.pbadoa.org. ………………………………… SOONER ASSOCIATION OF DIVISION ORDER ANALYSTS (SADOA) Association based in the Tulsa, OK Area
anyone cares, there will always be one person, whether it be that one new person that has little experience as a Division Order Analyst or that one person that is just struggling with a due diligence project… someone cares! So never give up, you are always being looked up to, always being looked at for direction. So as I leave HADOA as a leader to become just a member, I leave you all with this quote from Vince Lombardi, “I firmly believe that any man’s finest hour, the greatest fulfillment of all that he holds dear, is that moment when he has worked his heart out in a good cause and lies exhausted on the field of battle – VICTORIOUS.” I wish nothing but the best for the 2024 HADOA Board and Organization under the leadership of Cyrus Perkins as President.
Armando Lopez HADOA Past President/NADOA Director
For additional information regarding HADOA please view our website: www.HADOA.org. ………………………………… MID-AMERICA ASSOCIATION OF DIVISION ORDER ANALYSTS (MAADOA) Association based in the Wichita, KS Area (Inactive)
………………………………… PERMIAN BASIN ASSOCIATION OF DIVISION ORDER ANALYSTS (PBADOA) Association based in the Midland, TX Area
Happy Holidays from West Texas! Can’t believe we are in the final months of 2023! PBADOA has been busy kicking off the membership drive and filling positions for our 2024 board. We are thrilled that some new faces have stepped up to serve next year. We are truly thankful to those who take the time
SADOA hosted its fall 2023 seminar on October 18 at the Tulsa Country Club. We had 39 guests in attendance. This year we offered a webinar for those not able to attend in person; 3 chose to attend in this fashion.
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Donna King “Modern Project Management for the Land Analyst” Melissa Gardner “Basics of Indian Land Titles: Why Does McGirt Matter” Jacob Charney & Rami Jabara “Best Practices: The Relationship & Communication with Title Attorneys & DOA” Dr. Betty Simkins “Energy Realities and Energy Policy” Our next meeting will be the annual Holiday Party on December 7, 2023. Raffle tickets are available for purchase to benefit Emergency Infant Services and attendees may also bring a gift (e.g. formula, baby/toddler food, diapers/wipes, books or toys) to receive a bonus raffle ticket. For more information regarding SADOA, please visit our website at www.oksadoa.org. …………………………………
The speakers and topics were as follows:
Kaycee Spears Boren “Estates, Probates and More” Phillip Feist “Generational Management of Fractional Interests”
NADOA Welcomes The Following New Members:
Aethon Energy Kristen West
Equinor
Occidental Petroleum Corp Brandon Wathke
David Richardson
Civitas Resources Inc MeMe O’Brien
Frost Bank
Optimus Land Solutions Paul Haydel
Evan Martinez
Eckard Enterprises, LLC Jessica Stauffer
Independent
Pegasus Resources Liz Karlen
Maria Prieto
Elk Range Royalties Kayla Morren
Independent
Pioneer Natural Resources Brittany Schnabel
Pamela Sheeran
Energy Transfer
Independent contractor for Monument Resources, LLC Joe Nobles
Retired
Melissa Wegmann
Debra Shipp
EOG Resources, Inc. Landry Shepherd
Trinity Mineral Management Jennifer Hernandez
MineralSmart, LLC Haley Ward
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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.
Can Your Title To Texas Owned Lands Be Stolen? Yes! (But Under Very Limited Circumstances) By Terry E. Hogwood, Attorney-At-law
Texas
actual possession of the true owner (or its lessee), the title and ownership of that tract of land can be stolen by a forged deed. If it cannot be stolen by a forged deed, is theft of title insurance worth purchasing? Spoiler Alert – In the author’s opinion, theft of title insurance for owner (tenant) occupied Texas lands, as it is issued today, is not worth purchasing. Is theft of title worth purchasing for Texas lands that are not continuously occupied by the owner (tenant)? Again, in the author’s opinion, no, it is not worth purchasing. Problem Scenario 1 - Mr. Crook scopes out a Texas home where its owner resides and decides to “steal the title”. Mr. Crook forges the homeowner’s signature to a deed, records it in the pertinent county deed records and then sells or mortgages same in the hopes of getting money based on his forgery. Sound familiar? Scenario 2 – Mr. Crook looks at a Texas investment property where no one resides. He decides to steal the title via his forgery and recordation of a deed to himself/third party and then his sales or mortgage etc. This is a total different factual scenario from Scenario 1 solely due to who, if anyone, is in actual possession of the targeted land. The following is a brief review of Texas law regarding deeds, forged deeds, adverse possession, good faith purchasers for value and the duty to continuously research one’s title to see if anyone is attempting to claim ownership (NOT).
Preliminary Remarks The following article concerns itself with title to land (real property) located exclusively within the State of Texas. It answers the very simple question of whether the title to a tract of Texas land can be “stolen” by one or more individuals by (1) forging a deed to that tract of land, recording same and thereafter attempting to monetize the forgery by obtaining a loan for the purchase of the property or by selling the property to an innocent third party or (2) merely entering onto the property and possessing (as that term is later defined) the property in accordance with the Texas’ adverse possession statutes. Under (1) above, can Mr. Crook forge the true owner’s signature to a deed, file that deed of record and thereafter utilize that deed to attempt to: (1) defraud a mortgage company (loan) or (2) defraud a subsequent purchaser? Short answer: Yes. Equally as important, can the true owner of that tract of land “lose” its title to Mr. Crook based on a forged deed? Short answer: No. In answering that question, the legal analysis will start with the actual possession of the tract of land. That is, is the true owner actually living and in possession of the tract (with a home located on it) or is the owner an absentee owner not then living on and in actual possession of the tract (Ex: owning the tract as an investment only or the ownership being vested in trusts, heirs, devisees or other third parties who are not in possession)? The legal analysis of whether a Texas landowner’s title can be “stolen” will then lead to a further question of whether, for lands owned and in the
Deed of Conveyance Title to lands in Texas are normally transferred
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(conveyed) via a deed – be that a general warranty deed, quitclaim deed, special warranty deed etc. As between the parties to the deed, a properly acknowledged conveyance is final and binding whether or not the deed is recorded. Once properly executed and acknowledged, it is usual and customary to record a deed in the county deed records where all or part of the conveyed lands are located. § 12.001. Instruments Concerning Property. (Texas Property Code) (a) An instrument concerning real or personal property may be recorded if it has been acknowledged, sworn to with a proper jurat, or proved according to law. (b) An instrument conveying real property may not be recorded unless it is signed and acknowledged or sworn to by the grantor in the presence of two or more credible subscribing witnesses or acknowledged or sworn to before and certified by an officer authorized to take acknowledgments or oaths, as applicable. (emphasis added) 1. “An instrument that is properly recorded in the proper county is notice to all persons of the existence of the instrument.” Onwuteaka v. Cohen , 846 S.W.2d 889, 894 (Tex.App. —1993) 2. “However, an instrument conveying real property is not even eligible for recording unless it is signed and acknowledged by the grantor in the presence of two or more subscribing witnesses or a notary.” Onwuteaka v. Cohen , 846 S.W.2d 889, 894 (Tex.App. —1993) (emphasis added) 3. “The general purpose of an acknowledgment is to authenticate an instrument as being the act of the person executing the instrument.” Onwuteaka v. Cohen , 846 S.W.2d 889, 894 (Tex. App. —1993) Forged Deed A forgery in Texas occurs when one person signs the name of another without the authority to do so. 1st Coppell Bank v. Smith , 742 S.W.2d 454 (Tex. App. 1987) A forged deed is wholly void ab initio . A forged deed is in law no deed whatsoever; it simply is treated as if it never existed. Lynn v.
McCoy , 200 S. W. 885 (Tex. Civ. App. - 1926) “… A void instrument passes no title, and the mere fact that the grantee–mortgagee is an innocent purchaser makes no difference…” Wood v. HSBC Bank USA, N.A. , 505 S.W.3d 542, 549 (Tex. - 2016) Thus, even a mortgage company who grants the forger a mortgage, with no knowledge of the forgery, has no title and cannot foreclose its mortgage . “One holding under a void title cannot claim protection as an innocent purchaser ... Wood v. HSBC Bank USA, N.A. , 505 S.W.3d 542, 549 (Tex. - 2016) A forged deed, or forged deed of trust , is void and does not pass title to land. Texas Osage Cooperative Royalty Pool, Inc. v. Cruze , 191 S.W.2d 47 (Tex.Civ.App. - 1945, no writ); Erwin v. Curtis , 5 S.W.2d 547 (Tex.Civ.App. - 1928, writ ref’d). If properly acknowledged by the grantor and pertaining to and concerning real property, a deed of conveyance (not a forgery) will be entitled to recordation and will stand as constructive notice to third parties (in the chain of title). Sanchez v. Telles , 960 S.W.2d 762 (Tex.App. - 1997) Adverse Possession in Texas “Limitation represents the statutory acquisition of title to land by means of adverse possession. As shown by Article 5515 of the statutes, and the decisions interpreting such statutes, this means that there has been an actual, notorious, distinct and visible appropriation of land commenced and continued uninterrupted for the statutory period under a claim of right hostile to the claim of another, and of such character as to indicate unmistakably an assertion of a claim of exclusive ownership in the occupant. ” Texas Practice Land Titles (Lange), Section 861 Adverse possession is not about who uses the property more or for better purposes; rather, it is about whether one party ousts another from his legally held land. In other words, the owner must be wholly excluded by the adverse claimant. Kleckner v. McClure , 524 S.W.2d 608, 613 (Tex.Civ. App -1975, no writ); Terrill v. Tucknes s, 985 S.W.2d 97, 110 (Tex.App. — 1998)
Ultimately, proof of adverse possession by Mr.
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Crook (“limitation title”) under one of the following statutes will be required for Mr. Crook to “steal” a title utilizing a forged deed as a starting place. (NOTE: Under the Ten Year Limitations Period no deed is necessarily required to perfect limitation title.) Failing to oust the true owner and claiming to own the property himself, Mr. Crook will not be able to “steal” the title but he will be able to use the forged deed in an attempt to leverage money out of an unsuspecting mortgage company/ purchaser. The following are, in the author’s opinion, the most likely adverse possession statutes to be relied on (if at all) by Mr. Crook. It must be remembered that he is not usually attempting to legally own the property but rather is attempting to illegally manipulate one or more parties into illegally into giving him money. Absent proof of adverse possession in a trespass to try title case, mere possession of a property will not give Mr. Crook “title” to it. It will require, however, potentially significant legal fees to oust Mr. Crook permanently from the premises. The question is, does the Theft of Title insurance provide those legal fees to clear the landowner’s title?
§ 16.026. Adverse Possession: 10 Year Limitations Period (Tex.Civ.Prac.&Rem.Code)
(a) A person must bring suit not later than 10 years after the day the cause of action accrues to recover real property held in peaceable and adverse possession by another who cultivates, uses, or enjoys the property. (b) Without a title instrument , peaceable and adverse possession is limited in this section to 160 acres, including improvements, unless the number of acres actually enclosed exceeds 160. If the number of enclosed acres exceeds 160 acres, peaceable and adverse possession extends to the real property actually enclosed. (c) Peaceable possession of real property held under a duly registered deed or other memorandum of title that fixes the boundaries of the possessor’s claim extends to the boundaries specified in the instrument. Continuous Research Into Chain of Title A purchaser of a tract of land is charged with all notice of all instruments affecting its chain of title and which have been properly filed for record in the county clerk’s office where the lands are wholly or partially located. Carlisle & Co. v King , 133 S. W. 241 (Sup. Ct. - 1910) and American Exch. Nat. Bank of Dallas v. Colonial Trust Co ., 186 S. W. 361 (Tex. Civ. App. - 1916, no writ hist.). HOWEVER, the filing of an instrument with the office of county clerk is only notice to those who are bound to search for the document and which are in his chain of title. That is, once a party acquires title to an interest in a tract of land, it is no longer required to continually inspect the county deed records to be sure that there are no documents which have been filed subsequent to his acquisition of title which could affect or impact his quality or quantity of title. “The general rule is that the registry of an instrument conveying property is notice only to those bound to search for it, such as subsequent purchasers under the grantor in a deed...” Herd v. Wade , 63 S. W. 2d. 253, 258 (Tex. Civ. App. - 1933, writ ref’d.). Owners of an interest in a tract of land are NOT required to make a continuous search to
Article § 16.024. Adverse Possession: Three Year Limitations Period (Tex.Civ.Prac.&Rem.Code)
A person must bring suit to recover real property held by another in peaceable and adverse possession under title or color of title not later than three years after the day the cause of action accrues. A person holding under a void (forged) deed does not have title or color of title and is not entitled to the protection of the three-year statute of limitations. Field Measurement Serv. Inc. v. Ives , 609 S.W.2d 615 (Tex. Civ. App.— 1980, writ ref’d n.r.e.); Levitas v. Barraza , No. 13-02-510-CV (TX 7/29/2004) (Tex. 2004).
Article § 16.025. Adverse Possession: Five Year Limitations Period (Tex.Civ.Prac.&Rem.Code)
…….b) This section does not apply to a claim based on a forged deed or a deed executed under a forged power of attorney. (emphasis added)
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see if there was a recorded void instrument to their property nor is the recording of an instrument by one not in their chain of title constructive notice of same. Barrera v. Ruiz , 308 S. W. 2d. 579 (Tex. Civ. App. - 1958, no writ hist.); Campsey v. Jack County Oil & Gas Association , 328 S. W. 2d. 912 (Tex. Civ. App. - 1959, writ ref’d n.r.e.); Spiller v. Woodard , 809 S. W. 2d. 624 (Tex. Civ. App. - 1991, no writ hist.) Portman v. Earnhart , 343 S. W. 2d. 294 (Tex. Civ. App. - 1960, writ ref’d n.r.e.); Wood v. HSBC Bank USA, N.A. , 505 S.W.3d 542 (Tex. - 2016) Analysis In Texas, Mr. Crook cannot perfect title to any tract of land merely by filing a forged deed. In fact, Mr. Crook cannot ever own any tract of land in Texas under a forged deed unless he also adversely possesses the land under the ten year statute of adverse possession (by case law cited above a forged deed will not support adverse possession under the 3 year statute and by express language in the statute will not support adverse possession under the 5 year statute). What Mr. Crook can do is really mess up a title to a tract of land by filing a forged deed in the county deed records. He may even be able to convince a mortgage company to lend him money with the property as security or a purchaser to buy the property from him. HOWEVER, under no circumstances can a mortgage company foreclose its mortgage or a purchaser from Mr. Crook take possession of the lands where the underlying title is premised on a forged deed. Assuming that the true owner was still in possession of the property, the mortgage company had an affirmative duty to inspect the property itself and, as a result of that inspection, would have found out that Mr. Crook was not in possession of the property. Even if Mr. Crook is in temporary possession of the property, he does not have title to it unless he has been in possession for the requisite 10 year statutory period of time. It simply is not possible to dispossess the true property owner of its title to real property in Texas in the absence of actual, true adverse possession under the 10 year statute of limitations. Should a landowner check his title at the county courthouse or at a local title company from time to time? It can but it does not have any legal duty
to do so under Texas law. No affirmative duty to continually check one’s own valid legal title exists in Texas. The mere filing of a forged deed NOT coupled with ten years of adverse possession will not allow Mr. Crook to “steal” the true landowner’s title. In Texas, many counties have their records online which may be reviewed for free or for a nominal charge by the county. A landowner may alternatively travel to its county clerk’s office and directly review all conveyances which may have been made concerning the landowner’s tract for no fee whatsoever. It is easy enough to check one’s title in Texas. Properties where a residence exists but which is not occupied or where no residence exists offer the most available opportunity for Mr. Crook to work his insidious magic. Properties no longer actually occupied but held for investment purposes by heirs, trusts or management companies for such or similar persons make it much easier to work a fraud against the true owner(s). The author had a client that located a 100 acre tract with I-45 frontage in Harris County, Texas. The true owner(s) could not be located by the client or the taxing authorities. The client completely fenced the 100 acre tract, paid all taxes and, after the expiration of ten years, filed a trespass to try title action claiming title by adverse possession to the entire 100 acres. He won his case and was awarded the legal title to the property by the court. Note that the claimant to the 100 acres actually adversely possessed the property for the requisite ten year period of time. So likewise must Mr. Crook occupy and possess the lands he is claiming for ten years to actually own the property. Other than non-occupied property in Texas (which still requires a 10 year investment of adverse possession by Mr. Crook), most lands in Texas, although certainly subject to Mr. Crook’s nefarious and illegal schemes, will not be subject to having Mr. Crook “steal the titles” to them. They will be subject to the potential expenditures of significant sums in legal fees to “clear” the title and run Mr. Crook off. How much money? In the case where a legitimate mortgage company/third party purchaser has been defrauded by Mr. Crook, significant legal proceedings may be expected to be filed to defend that title acquired by fraud (forged deed). In a hotly
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contested trespass to try title case, it would not be unusual for the true owner/litigant to incur $50,000 or more in legal fees in the trial court alone to clear
the client’s record title. If the “insurance policy” does not require the monitoring company to reimburse the client for all out of pocket legal expenses/fees to clear its title, then the client is on its own for all legal fees. So, confirming the initial conclusions expressed in the first part of this article: 1. Mr. Crook can certainly forge the true landowner’s signature and file the forged deed of record. 2. In Texas, Mr. Crook cannot steal the true landowner’s title merely by filing a forged deed. He must additionally adversely possess the lands at issue for ten years etc. under the above quoted adverse possession statute. A void (forged) deed passes no title whatsoever. 3. In the author’s opinion, theft of title insurance, without requiring the insurer to fully reimburse the true landowner for all legal fees/expenses incurred in the bringing/prosecuting a trespass to try title lawsuit, will not benefit the landowner at all.
up its title due to the actions of Mr. Crook. The question then becomes, what did the
landowner purchase when it purchased Theft of Title Insurance? Did the issuer of the policy agree to defend the title (pay the necessary legal fees to perfect title in the insured)? Or, did it merely agree to run the initial title check and/or subsequent title checks upon some specified title period to update its findings? If the landowner finds that Mr. Crook has indeed filed a forged deed on the property, what additional duties/cash expenditures has the title theft insurance company agreed to pay to clear the true landowner’s title? Has it agreed to pay any and all legal fees necessary to take the true owner’s claim to fruition in a trespass to try title case? If not, what has the client actually purchased? Without contractually agreeing to pay all necessary legal fees to defend the true landowner’s title, it would appear that the landowner has purchased nothing more than a monitoring service which monitors, on some time specific time basis, potential filings of documents which might impact
© Terry E. Hogwood 2023
Gathering is not Transportation – DCOR & Post-Production Costs Under Federal Leases
Under 30 CFR §§ 1206.10, et seq ., transportation does not start until after the Central Accumulation Point (“CAP”), and thus gathering prior to the CAP is not a permitted deduction. In other words, gathering activities typically do not fall within an allowable transportation cost. The Office of Natural Resource Revenue (“ONRR”) defines “gathering” as “the movement of lease production to a central accumulation or treatment point on the lease, unit, or communitized [1] Post-production costs are those costs related to treating, processing, compressing, gathering, and transporting oil and gas from the wellhead to the point of sale. [2] 30 CFR §§ 1206.20 & 1206.171. [3] Calculating these allowables is referred to as “unbundling” and applies to transportation and/or processing fees.
Royalty payments under federal leases are due on production only after it has been placed in “marketable condition.” Thus, a lessee is responsible for placing oil and gas in marketable condition without the typical deduction of post- production costs. 1 The four non-deductible components of marketable condition are: (i) compression; (ii) gathering; (iii) dehydration; and (iv) sweetening or treatment. 2 Oil and gas are generally not considered to be in marketable condition at the wellhead (even if they can be sold untreated). Although the costs of gathering may not be deducted by a federal lessee, certain costs regarding transportation are deductible. 3 However, questions often arise as to whether a particular activity counts as “gathering” or “transportation.”
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appellate jurisdiction, 9 DCOR sought judicial review of the ONRR’s decision alleging that its decision was arbitrary and capricious. The District Court began its review of the ONRR’s decision by noting that federal lessees are required to pay royalties on “gross proceeds,” being “the total monies and other consideration accruing for the disposition of oil produced.” 10 Gross proceeds can be measured only on marketable products, and it is incumbent on the lessee to place production in marketable condition at no cost to the government – including the cost of gathering. As noted above, “gathering” is the movement of production from the lease or unit to a CAP off the lease or unit. 11 A “transportation allowance” is deductible from gross proceeds, and is defined as the reasonable, actual costs of moving oil or gas to a point of sale or delivery but specifically excludes gathering costs. 12 The court agreed with the ONRR that “central accumulation” did not occur until production reached the final onshore treatment facility and the approved royalty measurement point. Thus, the ONRR’s distinction between initial treatment on the offshore platforms and final treatment on the onshore facility was not arbitrary or capricious. 13 The court next explained that there is no general rule that the ONRR must permit transportation allowances for the movement of production from platforms to shore. 14 [4] 30 CFR § 1206.20. [5] 2023 U.S. Dist. LEXIS 127814 (N.D. Texas). [6] Id. at 4. [7] To the tune of $19,396,135.38 in allegedly underpaid royalties. Id. at 5. [8] Id. at 5-6. [9] DCOR apparently missed the 33-month deadline to appeal under the Federal Oil and Gas Royalty Management Act (“FOGRMA”). [10] 30 CFR § 1206.101.
area, or to a central accumulation or treatment point off of the lease, unit, or communitized area that [the Bureau of Land Management] approves for onshore and offshore leases, respectively, including any movement of bulk production from the wellhead to a platform offshore.” 4 If an activity falls within this broad definition of gathering, a transportation allowance will not be available. In the recent case of DCOR, LLC v. United States DOI , 5 the U.S. District Court for the Northern District of Texas examined certain offshore activities related to the gathering and transportation of oil and gas. Although the DCOR decision involves offshore activities, it provides guidance on the occult practice of deducting post-production costs – and specifically unbundling transportation costs – under federal onshore leases. DCOR, LLC (“DCOR”) owns and operates oil and gas platforms associated with federal leases off the coast of Southern California. DCOR’s oil and gas production is initially accumulated and treated on several offshore platforms. The production from these platforms is then transmitted to an onshore facility where it reaches “marketable condition” and moves through an approved royalty measurement point. 6 At issue is whether the movement of production from these offshore platforms to the onshore treatment facility is “transportation” (which is deductible) or “gathering” (which is non- deductible). The controversy arose when DCOR solicited the ONRR for guidance on how to calculate its transportation allowances. 7 This prompted a federal audit under which the ONRR found that DCOR had improperly deducted various transportation allowances. The ONRR contended that “gathering does not end until production is measured for royalty purposes,” and that DCOR was thus “precluded from claiming transportation allowances upstream of its onshore royalty measurement points, regardless of where its production achieves marketable condition.” 8 In other words, as a general rule transportation costs can only be deducted downstream from the royalty measurement point. After the Interior Board of Land Appeals (“IBLA”) determined that it lacked
[11] Id . [12] Id . [13] 2023 U.S. Dist. LEXIS 127814 at 10-11. [14] Id. at 12.
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