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