Severances- Evaluating Rights in Complex Permit Applications
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Susana Canseco
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Severances- Evaluating Rights in Complex Permit Applications
- 1. Severances – Evaluating Rights in Complex Permit Applications May 19, 2016 Texas Alliance of Groundwater Districts Regular Business Meeting By Susana Canseco BRANSCOMB | PC Lawyers with Solutions for Business www.branscombpc.com
- 2. Groundwater Severances • The Bundle of Sticks • Similar to severance of mineral estate, but law less well-settled • Many more now after Day. • Mechanisms and documents - Reservation in deed/conveyances 2
- 3. Your Role • Change of Ownership • Responsibility of Permit Holder – Sworn applications • You don’t need to check title • You can always amend/change/fix permits based on new information 3
- 4. Forms of Reservations/Conveyances • All groundwater v. fractional split – Usually d/l rights conveyed • Participating interests v. non- participating 4
- 5. Severances and Permitting • 50/50: Reservation/Conveyance silent as to permit = undivided interest = both on permit • 50/50; permit addressed/split in reservation/conveyance – permit could be split “A” and “B” or otherwise appropriate to your rules and the parties’ intent • 50/50 – Partitioned land – 2 permit 5
- 6. Example • Seller will reserve and retain an undivided fifty 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 hereafter issued by any governmental authority related to the Groundwater (the “Groundwater”), including a proportionate 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 exploration 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 proportionate share of all bonuses, rentals and royalties 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 domestic, livestock watering or agricultural irrigation purposes on the Property without the consent of the Seller. 6
- 7. Example • Reservation of 50% GW (including permit rights), with no executive right, except d/l and ag irrigation rights are conveyed • Key – Carefully read groundwater reservation or property description 7
- 8. Questions? Susana Canseco scanseco@branscombpc.com 711 Navarro Street, Suite 500 San Antonio, TX 78205 210-598-5400 8