largely meets these objectives, offering a blueprint for how title opinions can be managed with greater effectiveness. However, for Oklahoma, there is a clear need to adapt this model. While the Texas model provides a solid foundation, Oklahoma’s unique legal landscape, particularly with aspects like robust forced pooling and multi-tract drilling and spacing units, requires modifications to the ownership tables to align with state laws and practices. This customization is required to ensure that the model fits the needs of Oklahoma’s oil and gas industry. The Bad: Net acres Underappreciated as a Universal “constant” in Multi-tract Unit Development When comparing Texas and Oklahoma style title opinions one of the most notable differences is how net acres are treated in ownership tables. The inclusion of net acres in Oklahoma title opinions is not just a formality but a necessity driven by the state’s unique oil and gas development practices. To illustrate, if you own a 10% mineral interest, or leasehold interest, in a 40-acre tract, you have 4 net acres. This figure of net acres remains constant ; it does not change whether your tract is part of a 40- acre unit, an 80-acre lay-down spacing unit, a 640- acre gas unit, or even a 1,280-acre horizontal well unit. Your ownership percentage might fluctuate with the size of the tract or unit, but your net acres stay the same, simplifying calculations and ownership tracking. Oklahoma title opinions typically highlight net acres prominently in the ownership tables, often extending to six decimal places (e.g., 3.333333 net acres), which facilitates more precise ownership percentage or decimal revenue interest calculations ( e . g ., 3.33/160 = 2.081250% vs. 3.333333/160 =
coupled with less reliance on the stringent pooling and spacing rules prevalent in Oklahoma. However, the industry’s evolution towards horizontal drilling across multiple tracts has begun to blur these lines. With units now often sprawling over several sections and involving numerous owners, the operational landscape for title examiners, landmen, and division order analysts has significantly expanded. In this regard, Paul Yale’s statement on the “net acres” issue is illuminating:
I would further observe that to a certain extent the “net acres” debate is a Texas- centric discussion. Oklahoma title opinions and Rocky Mountain title opinions are much more apt to include net acres. For that matter, and at some risk of criticism from my Texas peers, I would observe that our counterparts in Oklahoma and the Rockies were more easily able to accommodate their existing title opinion formats to the shale revolution because unlike Texas, they practice in states where the forced pooling regime is better equipped to handle multiple tract development.
The Ugly:
1. The Use of Historical Fractions, String Formulas and the “Two column” Method You want to know what is really ugly? The use of historical fractions and long string formulas in ownership tables. For example, Table 1 below, shows a string formula placed under the owner’s name:
Net Revenue Interest
Working Interest
OWNER
ACRES
LEASE
Big Oil Company (See Comment Nos. 16 & 24) [1/2 of 88% of 60% of 4/5 plus 90% of 5/160 of (5/6 less 3.333333%) plus 10% of 5/160 of (5/6 less 1%) plus 1/2 of 1/3 of 13/16 plus 1/2 of 1/3 of (13/16 less 1.25% less 2%) plus 3.80833333% of (86% less 6%) plus 1/3 of (7/8 less 2.5%)]
1.00000000
0.81548958
160.00
L1-L25
2.083333%). This constancy is particularly crucial in Oklahoma due to the use of net acres to pay lease and pooling bonuses, royalty payments, and unit share calculation. In contrast, I have noticed that Texas title opinions have historically placed less emphasis on net acres (or not included at all) perhaps due to a focus on larger, single-tract developments or smaller units,
21 Table 1 Let us talk frankly about something interesting but a bit tricky: historical fractions in title opinions. Now, when I say, “historical fractions,” I am talking about how we trace back the ownership of a tract of land or an oil & gas lease through time. Some title opinions contain lengthy string formulas (positioned under the owner’s name) that tell the story as to how title evolved—with each element representing a different title transaction. For example, Little Red Oil, LLC owns all the leasehold and working interest in a 160-acre tract of land: its interest can be shown by string formula as (10%*1/2) + 1/4 + 1/3 + 11/30; or it could also be represented as just “100%”— which would negate the history. The benefit of historical formulas is they provide a clear, traceable path from some base point in ownership down to current interests. This transparency allows clients to verify Table 1 Let us talk frankly about something interesting but a bit tricky: historical fractions in title opinions. Now, when I say, “historical fractions,” I am talking
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