07 Aug Louisiana Mineral Servitudes… by Melissa A. Lombardo
Louisiana has a distinct approach to the separate ownership of surface and mineral estates through the concept of the mineral servitude. This article provides an overview of mineral servitudes as outlined in the Louisiana Mineral Code and relevant case law.
What is a mineral servitude?
According to the Louisiana Mineral Code, located in Title 31 of the Louisiana Revised Statutes, landowners do not “own” naturally occurring oil, gas, and other minerals. Instead, they possess the exclusive right to develop their property for the production of minerals thereby reducing said minerals to possession and ownership.[1] Unlike other states that permit a severed mineral estate (whereby the surface estate and mineral estate are separately owned), Louisiana maintains a strong public policy against the creation of a mineral estate separate and distinct from full title to the land.[2] Consequently, a corporeal mineral estate independent of the surface estate does not exist in Louisiana; rather, Louisiana allows for the creation of a mineral servitude on the land in which the minerals lie, granting only the right to extract and appropriate said minerals.[3]
Under La.R.S. 31:15, a landowner may convey, reserve or lease their right to develop the land resulting in the creation of a mineral servitude.[4] Mineral rights may be owned separately from the surface estate only through the creation of a mineral servitude.[5] A mineral servitude is defined as the right of enjoyment of property belonging to another for the purpose of exploration and production of minerals and reducing said minerals to possession and ownership.[6]
Prescription of Nonuse
In Louisiana, mineral rights are classified as a real right subject to prescription of nonuse for ten years.[7] A mineral servitude is considered to be one of the basic mineral rights that may be created by a landowner. Therefore, although parties may impose a term on the duration of a mineral servitude in order to shorten the applicable period of prescription of nonuse, generally mineral servitudes are subject to a prescriptive period of ten years.[8] Even if a term longer than ten years is specified in the instrument creating a mineral servitude, the mineral servitude will still be subject to the prescription of nonuse and will expire prior to the specified term if not used within the prescriptive period.[9]
Interruption of Prescriptive Period
According to La.R.S. 31:28, the prescriptive period of ten years of nonuse begins running upon the creation of the mineral servitude. In order to interrupt this prescriptive period and prevent the mineral servitude from extinguishment ten years after its creation, there must be good faith operations for the discovery and production of minerals. To meet the requirement of “good faith” operations, evidence must be submitted demonstrating that operations were (1) commenced with reasonable expectation of discovering and producing minerals in paying quantities at a particular point or depth; (2) continued at the site chosen to that point or depth; and (3) conducted in such a manner that they constitute a single operation although actual drilling or mining is not conducted at all times. [10] The burden of proof lies with the mineral servitude owner to establish that the prescriptive period of ten years nonuse has been interrupted.[11] While proving good faith operations is generally a fact specific requirement, Louisiana courts often rely upon testimony from geologists and/or experienced landmen to assess the reasonableness of an operator’s expectations regarding the presence of oil or gas in paying quantities at the intended depths.[12] To satisfy the requirement that a well be drilled at the site where an operator reasonably expected to discover oil or gas, it is sufficient that a well is actually drilled, even if the well is a dry hole.[13] In determining whether there has been one continuous operation, Louisiana courts have relied heavily upon the specific facts of each case.
Navigating Louisiana oil and gas law can be complex. It is always advisable to consult an experienced oil and gas attorney to determine the best course of action in any situation. The Louisiana-licensed attorneys at Kearney, McWilliams & Davis, PLLC possess extensive experience in all aspects of Louisiana oil, gas and mineral law and are available to discuss any Louisiana issues you may encounter.
By Melissa A. Lombardo, Senior Attorney at KMD Law
[1] See La.R.S. 31:6.
[2] See Inversiones Del Angel, S.A. v. Callon Petroleum Co., 883 F.2d 29 (5th Cir. 1989).
[3] See Wemple v. Nabor Oil & Gas Co., 97 So.666 (La. 1923).
[4] See also Frost-Johnson Lumber Co. v. Salling’s Heirs, 91 So 207 (La. 1922).
[5] See Central Pines Land Co. v. United States, 274 F.3d 881 at 844 (5th Cir. 2001).
[6] See La.R.S. 31: 21 and Frost-Johnson Lumber Co., supra.
[7] See La.R.S. 31:16.
[8] See La.R.S. 31:74. See also La.R.S. 31:27 regarding the means by which a mineral servitude may be extinguished.
[9] La.R.S. 31:27(1); Frost-Johnson Lumber Co., supra; Hodges v. Norton 200 La. 614, 8 So.2d 618 (La. 1942); and Bodcaw Lumber Co. of La. V. Magnolia Petroleum Co., 167 La. 847, 120 So. 389 (La. 1929).
[10] See La.R.S. 31:29.
[11] See Scott v. Hunt Oil Co., 160 S.2d 433 (La.App 2 Cir. 1964).
[12] See Lynn V. Harrington, 193 La. 877, 192 So. 517 (La. 1939).
[13] See Arkansas Louisiana Gas Co. v. Thompson, 222 La. 868 (La. 1952), distinguished on other grounds.