Researching Title

I have spent most of my career working in Texas, so allow me to describe a typical title research project here. Texas land titles began with Spanish Land Grant. Then came Mexican Land Grant, and finally, Texas Land Grants. Each of the Land Grant in a county is assigned an Abstract Number. Generally, the earliest grant is A-1, and the abstract numbers for other surveys are assigned chronologically up to the most recently created survey. All of the instruments affecting land title are filed in the County Clerk’s office of each county, and as the instruments are filed, the County Clerk adds them to their Grantor and Grantee Index. In most cases, (but not always) the County Clerk will make a note on the index entry about the number of acres conveyed and the survey name and Abstract Number where the property is located. Other than that, no attempt is made to organize instruments filed of record according to its location within the county. This makes title research in Texas a little more challenging than title research in states utilizing the Public Land Survey System whereby the land is allocated to 640-acre sections, which are organized into Townships. The county records in these states have a system whereby deeds are organized by section, as well as by Grantor/Grantee, and this makes title research much simpler and easier to perform in those states than it is here in Texas. 

As this piece will demonstrate, there is a lot of work involved in researching land and mineral ownership. When researching title for oil and gas leases, you want to be able to identify both the surface owners and the mineral owners. It is important also, to note any non-participating royalty owners or any current deeds of trust that affect the property you are researching. Depending upon client needs and requirements, you may also need to note any easements for roadways or pipelines, or for any other purpose. Within the outline they gave you on the map, there might be one surface owner and many mineral owners, or there might be many surface owners and one mineral owner. Or, there might be ten landowners who each own the surface and one hundred percent of the minerals to fifty acres each. Anything is possible. And, it is up to you to figure it out. Depending upon where you are, it might be rare for the surface and the mineral estates to be severed, or it might be common. You might be operating in a county where a lot of mineral trading was done during the Roaring Twenties, and again during the Great  Depression, or possibly during another era when a lot of wells were being drilled. You might be working in South Texas where if you own 2,000 acres, it might be considered by many of your friends and neighbors to be only a very small ranch. Or, you might be in another part of Texas where 2,000 acres is a very impressive amount of land to own.

This is one of the great realities of being a petroleum landman… A great deal of our work consists of solving little puzzle after little puzzle…. Every day... Do you like to be intellectually challenged? Do you like using your brain? If the answer is, “No”…. Read no further. You are definitely not landman material. (I  seriously doubt whether you would have read this far if your answer was  “No”.) 

Now… Let’s suppose you have been given a  land plat with some acreage outlined on it. It is up to you to figure out who owns it and to ascertain whether or not it is currently leased for oil and gas exploration and production. In most counties in Texas,  the following is the way I would proceed. Keep in mind… Some counties have set-ups a little different from this typical county. In those cases, you will need to innovate your process based upon the actual situation where you are working. 

FIRST…  Take your plat to the Appraisal District Office and research their records for current surface owners on the area within your outlined acreage. There is an Appraisal District Office in each county. The  Appraisal District is tasked with assessing the value of all of the property within the county for tax purposes and also with keeping accurate records of the owners of the property within the county. Although there are exceptions, in most cases, the Appraisal  District Office is an excellent source of information in regard to current surface owners. Information that is often readily available includes the name and address of the present surface owner or owners, the number of acres, and the deed reference for the conveyance into the present surface owner. Many of the Appraisal District offices have computers for you to utilize in your research. Sometimes you can take a computer printout showing all of the owners and all of the pertinent information, and you don’t even have to write anything down. Many have great ownership plats and you can make copies of your area of interest and take it with you. Some are less user-friendly and the information is harder to find. 

SECOND…  Take your new and growing file over to the County Clerk’s Office and look up the vesting deed reference you got for the present surface owners at the Appraisal District Office. If there was no vesting deed reference, then run the Grantee Index backward from the present until you find the deed into the owner as shown at the Appraisal District Office. Get a copy or take notes. (Or, do both.) If you take notes, you will need to jot down the recording info, the date of the instrument along with the effective date, if it is different, the  Grantor(s), the Grantee(s), the description of the land, (you will quickly learn how to shorten this description in your notes), and whether the deed refers to any liens or helpful “Subject To’s”, like deeds of trust, or prior mineral or royalty reservations, or mineral or royalty conveyances, or oil and gas leases. Again, you will learn by experience what is important, and what is not. Hopefully, the description will refer to another deed in the chain of title. Look at that deed, and take notes. Then look at the deed referenced in the description for that deed, and take notes. Keep doing this until it doesn’t make sense for you to continue doing so. In many cases, this quick process will give you a very quick and accurate chain of title going way back into the title for your property in question. (The PIQ.) I use “PIQ a lot in my title notes, and, going forward, I’m going to utilize it in this piece as well. It’s a great shorthand tool. 

THIRD…  At this point in the process, you may have seen enough of the instruments in the title chain so that you can make a pretty good guess as to the ownership of the PIQ. If you happen to be in a  competitive lease situation, and ​you are the person responsible for acquiring the leases, then you might want to make contact with the owner or owners at this time. For our purposes, however, let’s assume it is your job to thoroughly check the title and to make a report prior to contacting the landowner. So… That being the case... The next thing I  would do would be to assess what I have seen so far, and do any quick indexing in an effort to plug holes in the chain of title or to make better sense of what I am seeing. At this point in the process, I probably would not get too bogged down in trying to figure out the complete title via the indexes in the County Clerk’s Office. However, in some situations, and in some counties, spending the time thoroughly indexing a chain at this time might be the proper thing to do. An experienced title researcher will know what to do. Usually, though, in most situations, this is the time I would take my notes and my knowledge of the chain of title on my PIQ to the abstract plant.

FOURTH…  Most counties have an abstract plant that is open for use by landmen and title researchers on a paid basis. Some charge as little as $10 per  hour to utilize their records. Others charge up to $100 per hour. The reason you want to utilize the abstract plant records is because their records are organized
according to survey instead of by  Grantor/Grantee. The reason you go to the abstract plant at this point  in your process of title research is because now that you are familiar  with the chain of title of your PIQ, you are more capable of looking  through the large volume of documents within the survey and discerning  the documents that pertain to your PIQ from those that don’t. 

Some  abstract plants have their records on computer. Others are on index  cards. Some are in books. And others have small, index-card-sized copies  of the instruments. Often, the old records start out in books, and  then, at some point, they change to index cards, and then to computer  records. Books can be really great to work with. Usually, when you are  working in books, they pertain to the older records. These old books are  huge, and all the details regarding an instrument are set in in one  line, making it easy to identify your PIQ from the other tracts within  the survey by looking at just the number of acres. Index cards  can also be pretty handy. Sometimes the computer records are really  great because they allow you to search and sort in some really helpful  ways. Often, especially in abstract plants with computerized records, it  makes better sense to make copies of your instruments in the abstract  plant rather than in the courthouse. 

If your property should happen to be in a large survey, such as an old, three-league Spanish or Mexican Land Grant,  then the abstract plant might not be of much use. There might be too many tracts within your large grant, and it might be too difficult to sort out the documents pertinent to the title to your PIQ versus the other tracts within the survey. 

When working in the abstract plant, I recommend that you take very cursory notes of the instruments you find affecting your PIQ, taking special care to get the recording information. Then, when you leave, you can go over to the County Clerk’s office and take detailed notes on the documents without being under the pressure of knowing your are spending up to $100 per hour to do so. 

FIFTH… As hinted at above, the next step is to go back to the courthouse and take more detailed notes on the instruments you identified in the abstract plant that you were not previously aware of before going there. 

SIXTH…  Evaluate what you have. Do you have a reasonably complete chain of title? Does it make sense to you? Do the oil and gas leases you have seen in the chain of title make sense according to the chain of title you have identified? 

At this point, you should have a clear understanding of whether or not there have been any mineral severances affecting this title. Also, you should be able to identify any holes in your chain of title where you need to find and plug in missing deeds or possibly locate probates or figure out intestate heirship. Often, at this point, a good landman can already identify flaws in the title that may need to be fixed after leasing but before drilling. 

SEVENTH…  Locate any probates needed in order to complete your chain of title.  (Assuming the person died in the county where the PIQ is located.) Also, do some indexing in an effort to plug other holes that might require missing conveyances, or affidavits of heirship, or certified copies of probates from another county or state. 

EIGHTH…  You will find that some titles are fairly simple, and others quite  complicated. When working with a simple title, a good landman can get through steps one through seven in as little as three or four hours.  Really complex titles can require several days to research, or, in extreme cases, even several weeks. If you run
enough titles, you will eventually encounter the entire spectrum of titles from simple to complex.  

The final step in this title research process is to perform the formal indexing process. In order to do this, you need to identify each party involved in the chain of title for your PIQ and arrange them in chronological order in order of their appearance. At the same time, make a note of the date when each party died or conveyed their interest or the date on which such party’s interest in the PIQ terminated for whatever other reason. Once this tabulation is completed, you are ready to run the Grantor/Grantee Indexes 

This can be a time-consuming process, so sometimes corners are cut in order to save money. (Money that would be paid to you, that is.) Anyway… If the chain appears to be solid, and you see nothing suspicious in the chain, and the previous oil and gas leases all make sense according to what you have seen, and if the landowners confirm your findings, and if not a lot of money is being paid for the oil and gas lease, then a decision can be made that the risk of a title failure is outweighed by the cost of performing this task, and the formal indexing process can sometimes be shortened or even foregone. However, for our purposes, let’s assume that a great deal of money is being paid for the lease, and there is a good reason to do a thorough job of indexing. Here is what we would do…

In the County Clerk’s Office, the current indexes are called the Official  Public Records, or some similar name. These records have a fairly recent beginning, usually sometime around 1990, depending upon the county. All recordings concerning real property are now included in this one index.  Before the Official Public Records came into being, there were separate indexes and separate records kept for Deed Records, Deed of Trust  Records, Lis Pendens Records, Mechanic’s and Materialmen’s Lien Records,  Abstract of Judgment Records, UCC Records, and Federal Tax Lien  Records. Sometimes, but not always, depending upon the county, there were also separate Oil and Gas Records. The title researcher needs to check the beginning date for the Official Public Records in the county where the PIQ is located, and then make a decision whether the names in the chain of title need to be run in any of these earlier records other than the Deed Records. Of course, if there were separate Oil and Gas  Records, then regardless of when the Official Public Records began,  these Oil and Gas Lease Records will definitely need to be run. Also,  names in the record title of the PIQ for at least the past ten years will need to be run in the Civil Records in the District Clerk’s Office. 

Usually,  the Official Public Records are on a computer, and a terminal for running the index on the computer is provided by the County Clerk for public use. And usually, names in these indexes can be run fairly quickly and easily. In most cases, you can enter the name you want to search, select both Grantor and Grantee, so that results will be shown for each case,  and hit “Enter” to perform the search. If the name you have entered was either the “Grantor” or the “Grantee”, or, in the case of an oil and gas lease, the “Lessor” or the “Lessee”, the document or documents in which this occurred will be shown on your computer screen. Usually, you will have the option of clicking on the document in order to view a scanned  copy on the computer screen. And usually, you can choose to print the  document, if desired.

Whether you are indexing the names on your chain of title on the computer, or in index books, each time the name you are indexing appears, it is called a “hit”. Each time you get a hit, your responsibility, as a title researcher is to either confirm the document is already listed on your chain of title, or add the document to your chain of title, or determine that the document does not pertain to your chain of title. As you index, you need to keep a record of your hits, and your notes should somehow indicate which of these three categories each of your hits fell into. Generally, this formal indexing process for leasing purposes should take your chain of title back in time to at least 1900. The reason you can stop your title research at this point is because that is the generally recognized date from before which, there are very few mineral severances. Once the minerals are severed from the fee title, it is very difficult to adversely possess them. Any party who successfully adversely possesses the surface after  the date of a mineral severance, (achieved by a mineral conveyance or reservation) takes the title subject to such mineral severance. My standard practice in this regard is to take the title back to 1900, and as far back from that point as can be done without spending too much time and effort. Sometimes it is a simple matter to take title back further than 1900, and sometimes it is a very complex and difficult task.  When you have completed this formal indexing process, you have completed the title researching process for your PIQ. All that remains is for you to evaluate your findings and tabulate the present ownership of the surface and the minerals. If you have concerns regarding anything you have seen in the title that might affect the title of the owners as you show them to be, then this is the time to voice those concerns with your supervisor or with your client. Let them direct you as to what should be done.

Watch out for shortcuts! Every shortcut has a risk to it. Be aware of these risks, and do the work the hard way when you need to. Title research is a process that involves running every name in the chain of title in every index that pertains to the time when that name had an interest in the PIQ, plus sifting through all of the records in the abstract plant pertaining to the survey where the property is located. When this process is complete, you should have identified every instrument that has been filed of record affecting the chain of title. It is common practice in the industry to shorten this process when running title in order to buy an oil and gas lease. The main reason for this is money. The client must weigh the cost of running full title to the cost of the lease, and make his judgment call as to how much risk to take by shortcutting the process. Later, if the lease makes it to the drilling stage, a more formal process is generally performed in advance of drilling. This is when the sovereignty runsheet is prepared and the title opinion rendered by the attorney. Even then, there are many shortcuts taken in the title research process. 

Some commonly utilized shortcuts in title research include not following assignments of old, expired oil and gas leases, or deeds of trust, or not following assignments of pipeline ROW’s. These shortcuts always need to be made with a conscious decision while keeping in mind the potential consequences.

As noted above, everyone makes mistakes. Even me. And even you… And even attorneys, and surveyors, and their secretaries, and their draftsmen. When an attorney makes a mistake in drafting a deed, or when a surveyor mistakenly describes the wrong tract of land, it is your responsibility as a title researcher to find those mistakes, to assess the importance of the mistakes, and to bring them up with your supervisor or the client. You will see a lot of typos and other drafting errors on documents filed of record during your career as a petroleum landman. Some can be ignored, and many require fixing. 

Five hundred years ago, the Native Americans who occupied what is now Texas had no interest in carving out parcels for individuals within their tribes. Then came the Spaniards, who claimed this land together with the land all the way to California. Spain made grants of land to individuals and evidenced them by Spanish Land Grant. Mexico won its independence from Spain in 1821, and took over Spain’s claim to what is now the State of Texas, and the rest of the lands that eventually became California, Nevada, Utah, New Mexico, Arizona, and parts of Oklahoma, Kansas, and Wyoming. Mexico honored the grants Spain had made to individuals and also made grants of their own. It was Mexico that brought in Stephan F. Austin and his colonists to Texas and granted them large parcels of land for immigrating. Then, Texas won its independence from Mexico in 1835, and carved out additional parcels for individua,ls including large tracts as rewards for the men who helped fight the war of independence. In 1845, Texas joined the U. S. as the 28th state. Afterward, the State of Texas recognized all the previous Land Grant made by Spain, Mexico, and the Republic of Texas and eventually made many additional grants to individuals as well. 

As a result of all of these Land Grant, there is no uniform manner in which lands in Texas may be described. All land descriptions ultimately go back to metes and bounds descriptions that are based upon on-the-ground surveys. Descriptions for early, Spanish and Mexican Land Grant were made in leagues, and labors, and hectares, and described by varas. Present-day descriptions are made in acres and described by feet. I think every landman probably owns an Allen Engineering Scale. If you don’t already have one, then you definitely need to buy one. Mine has eleven different six-inch front and back facing rulers bound together by a brad. In order to use it, you find the ruler that matches the scale of the plat you are utilizing, (i.e. 1” = 3,000 feet, or 1” = 2,000 varas, or whatever) and you use it to work your way through a metes and bounds description on your plat. For directions (i.e. N35°W), you can either eyeball it or use a protractor. This can be tedious, but it is not rocket science.  Additionally, you can utilize a software program such as Deed Plotter. Simply plug in the metes and bounds description, and a graphic representation pops out. This can be a great help in proving whether or not a description “closes,” or whether or not it is defective. Beginning landmen need to learn how to draft land descriptions utilizing deed references instead of entire metes and bounds descriptions. You look like a rookie when you utilize an old, poorly worded description from the chain of title instead of drafting a good one yourself. I have a standard way to word my descriptions that is clean and neat, and professional. I recommend that you do the same. Figure out a good way to do it and stick with it.

In no particular order, here are some things that a good petroleum landman/title researcher should be aware of: 

•  When running title, pay attention when you see an assignment of a lease that you thought had expired. This definitely needs to be explained. 
• Watch out for old leases that cover your PIQ together with other non-contiguous tracts. In the absence of a Pugh Clause, or a continuous development clause, this old lease could be perpetuated by drilling or production on those non-contiguous tracts, which might be located in another part of the county. 
• Be sure to recognize all breaks in the chain of title that need explaining. 
• Read documents carefully. Just because it says “Royalty Deed” at the top, doesn’t mean it is a royalty deed. Depending upon how it is worded, it could be a mineral deed. or even something else entirely. This is a very common problem with older instruments. Many are so poorly drafted, contradicting themselves in their intent from one paragraph to the next, that it is almost impossible to interpret them. This is when you call an attorney. I’ve seen many attorneys scratch their heads over these old deeds as well. 
• Be careful when indexing on the computer. The name you are looking for might be indexed in a different manner than you think it is. Make sure you figure out all the ways a certain name might be indexed so that you do not miss anything. 
• Although you don’t have to lease the owners of non-participating royalty interests, you may need ratifications for pooling purposes. In most cases, this needs to be done prior to drilling, so don’t let the client be surprised. Be sure to identify NPRI’s in your chain so they can be dealt with if necessary. 
• If you are leasing a tract that is subject to a deed of trust or lien, then be aware that you will need to subordinate the deed of trust or lien to your lease. You don’t want to lose your lease after a successful well was drilled because your landowner failed to make his mortgage payment.

And that’s not all. These are just some of the more common pitfalls. Hopefully, this will help you get started so that you can figure out the rest for yourself. 

Good luck to you!

THIS INFORMATION IS BEING PROVIDED IN AN EFFORT TO ASSIST BEGINNING LANDMEN IN THEIR UNDERSTANDING OF THE PETROLEUM LAND BUSINESS AND IN TITLE RESEARCH. STARDUST ENERGY INC. ASSUMES NO LIABILITY OR RESPONSIBILITY FOR LOSSES OF ANY KIND WHICH MAY BE INCURRED FROM RELIANCE UPON THE MATERIAL CONTAINED IN THIS WEBSITE, INCLUDING THIS SECTION. TITLE RESEARCHERS SHOULD ALWAYS BE  AWARE OF THE RISKS INVOLVED IN MAKING ASSUMPTIONS REGARDING THE TITLE OR  THE RESEARCH PROCESS. TITLE FAILURES CAN RESULT IN THE LOSS OF MILLIONS OF DOLLARS IN OIL AND GAS REVENUE. ALL INFORMATION CONTAINED HEREIN SHOULD BE VERIFIED AND CONFIRMED BY EACH PARTY’S LEGAL COUNSEL.