Groundwater Severances - What, Why and How_Susana Canseco

1. Severances – What, Why, and How
October 27, 2016
Texas Alliance of Groundwater Districts
Leadership Training
By Susana Canseco
BRANSCOMB | PC
Lawyers with Solutions for Business
www.branscombpc.com

2. Background
• Groundwater severances similar to
severances of mineral estate
• Have become more common
– Day and now Coyote Lake Ranch add
certainty
– Economic moKvaKon
• ReservaKons/conveyances
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3. Your Role – Permit Applica@ons
• Applicant’s responsibility to inform you
per your rules
• Rules should require submission of all
documents relevant to groundwater
ownership
• No need to check Ktle
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4. The Par@es’ Rela@onship
• No need to administer relaKonships
between “parKes”
• If they disagree, they need to sort it out.
• You can always amend/change/fix
permits based on new informaKon.
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5. Your Role – Change of Ownership
• May catch severances at this stage
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6. Sample Language
• Seller will reserve and retain an undivided fiHy percent (50%) interest in the groundwater and any
appurtenant property rights, real or personal, hereditaments, licenses, and contracts, if any, related to or
pertaining to the groundwater under and that may be produced from the Property together with any
permits now or hereaHer issued by any governmental authority related to the Groundwater (the
“Groundwater”), including a propor@onate interest in and to the proceeds of the sale of any the
Groundwater whether paid as a royalty or in any other manner.
• Buyer agrees that any subsequent oil, gas or mineral lease or exploraKon agreement will not include the
right to use any groundwater, whether fresh or saltwater without the express consent or joinder of the
Seller, its heirs, successors or assigns.
• However, Seller will convey to the Buyer the right to execute all quarrying or mining agreements, water
deeds, leases or other conveyances that may be granted out of the or under the Property without the
joinder of the Seller. The conveyance of the right to execute such conveyances of the Surface Minerals or
Groundwater shall not be construed to prevent Seller from receiving Seller’s proporKonate share of all
bonuses, rentals and royalKes or other proceeds payable under any conveyance or sale of Surface
Minerals or Groundwater.
• Seller will convey to the Buyer the right to use so much of the groundwater from the Property as Buyer
can use without waste, for domes@c, livestock watering or agricultural irriga@on purposes on the
Property without the consent of the Seller.
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7. Your Review
• “undivided fi]y percent (50%) interest”
• “together with any permits now or
herea]er issued by any governmental
authority”
• “domesKc, livestock watering or
agricultural irrigaKon”
• Key – Carefully read groundwater
reservaKon or property descripKon
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8. QuesKons?
Susana Canseco
scanseco@branscombpc.com
711 Navarro Street, Suite 500
San Antonio, TX 78205
210-598-5400
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