When title to minerals or royalty is in doubt, an operator has the right to hold royalties from production in suspense (similar to escrow) until title is clear. The process of clearing title – known as curative – generally entails a standard set of mechanisms to ensure that the operator will pay the correct person.
Hydrocarbons are fungible goods, and once mixed it is virtually impossible to tell which well or unit they came from. Operators have a statutory duties, as discussed in this presentation, to measure and keep clear records of produced oil and gas so that the source and ownership of the hydrocarbons is well-documented.
ANALYZING RETAINED ACREAGE CLAUSES
A retained acreage provision limits the amount of acreage that can be held by production from a given well. This presentation explores how retained acreage clauses impact an operator’s ability to hold acreage after a lease’s primary term has expired.