Free landman training, one unit at a time.

A landman hired to lease or buy for a company acts as that company's agent. Agency law gives the agent a duty of loyalty: act for the client's benefit in everything connected with the job. In practice that means four things.

• No secret profit. Don't take money or an interest from anyone else because of the work, unless the client agrees.
• No hidden stake. A lease, an override or minerals that you or your family hold in the prospect is a material fact the client needs.
• No working both sides. Don't act for the other party in the same deal.
• Keep the client's information. A prospect map, target acreage or well costs aren't yours to use or pass along.

A conflict doesn't have to end the job. Conduct that would breach the duty is allowed if the client consents after you disclose every material fact and deal fairly. Put the disclosure and the consent in writing before you start. Parking the interest with a relative or a friend cures nothing.

The owner across the table isn't your client, and you still can't mislead them. Misstating what a lease or deed does to get a signature invites a fraud claim against you and the client. If an owner wants advice, tell them to see their own lawyer.

Client and agent

The company or owner hiring the work is the client. The landman acting for it is the agent.

Material fact

Anything that would reasonably affect the client's judgment about the deal, or about you.

ORRI

Overriding royalty interest: a share of production carved out of a lease, free of the costs of production, that ends when the lease ends.

AMI

Area of mutual interest: an area named in an agreement inside which the parties share what any of them acquires.

Sources. Restatement (Third) of Agency §§ 8.01 to 8.06 (Am. Law Inst. 2006).

Answer question 1 in the blue book

Every chain starts with the sovereign. In Texas that's a grant or patent from Spain, Mexico, the Republic or the State; in the public-land states it's usually a federal patent. The job is to connect every link from there to today's owner of record.

County clerks index recorded instruments by party. Run the grantee index back: look up the owner of record as grantee to find who they took from, then look up that grantor the same way, and so on to the patent. Then run the grantor index forward for each owner, from the day they took title until well after they conveyed, since instruments get recorded late. That's where the leases, mineral deeds, deeds of trust, easements and releases turn up.

Post each instrument to the runsheet in order: the instrument, the dates signed and filed, Vol/Pg or instrument number, grantor, grantee, the land covered, and anything reserved or excepted. Probate files, court records and affidavits of heirship (AOH) fill the gaps a death or a lawsuit leaves.

Legal descriptions differ by state. Texas never used the federal rectangular survey; its land is described by survey, abstract, block and section, or by metes and bounds. Oklahoma uses section, township and range.

The recording act settles fights between buyers. In Texas an unrecorded deed binds the parties to it but is void as to a later purchaser for value without notice. Notice can be actual, from the records, or from facts that should make a buyer ask, such as someone else living on the land.

Once you find a defect, the curative reference at title.wiki lets you look it up with the instrument that usually cures it.

Runsheet

Every instrument in the chain, in order, with its recording data and a note on what it does.

Patent

The grant that moves land out of the sovereign's hands.

BFP

Bona fide purchaser: someone who pays value without notice of an earlier claim.

Vol/Pg

The volume and page where an instrument is recorded. Newer records use an instrument number.

Sources. Tex. Prop. Code § 13.001.

Answer question 2 in the blue book

A mineral interest carries the executive right (the right to lease) plus bonus, delay rentals and royalty. A non-participating royalty interest (NPRI) shares in production free of the costs of production, but gets no bonus or rentals and has no say in leasing. An ORRI comes out of the lessee's side and ends with the lease.

When a unit shares production by surface acres, a royalty owner's decimal is the mineral fraction, times the lease royalty, times the tract's share of the unit.

Now the Duhig rule. When a warranty deed grants an interest and reserves one too, and the grantor doesn't own enough to fill both, the grant is filled first. The grantor is estopped from claiming the reservation to the extent it would breach the warranty.

Duhig applies only where giving effect to the reservation would breach the warranty. If the deed excepts the outstanding interest, there's no over-conveyance to fix. Read the whole deed before you do the math.

Executive right

The right to sign a lease covering the minerals.

NPRI

Non-participating royalty interest: a share of production with no right to lease and no bonus or rentals.

Decimal interest

The owner's share of a unit's production as a decimal, the number on a division order (DO).

Estoppel by deed

A grantor who warrants title can't later claim, against the grantee, what the deed promised.

Sources. Duhig v. Peavy-Moore Lumber Co., 135 Tex. 503, 144 S.W.2d 878 (1940).

Answer question 3 in the blue book

The General Land Office (GLO) manages the state's minerals. How a tract gets leased depends on what the state kept when it sold the land.

Relinquishment Act land is school land the state sold with a mineral classification between September 1, 1895 and August 21, 1931. The state owns the minerals. The surface owner, called the owner of the soil, negotiates and signs the oil and gas lease as the state's agent, on the GLO's lease form. The GLO has to approve the terms, and the lease has no effect until a certified copy is filed with the GLO. The owner of the soil gets 1/2 of the bonus, rental and royalty, for acting as agent and in place of surface damages. The state gets the other 1/2.

As the state's agent, the owner of the soil owes the state a fiduciary duty. That rules out self-dealing: no lease to themselves or a nominee, none to certain related persons without the School Land Board's approval, and no side deal that trades away the state's share.

Free royalty land. Where the state kept only a free royalty, its interest works much like an NPRI, and a lease there has no effect until a certified copy of the recorded lease is filed with the GLO. Land the state still owns outright is leased by the GLO itself, which holds sealed-bid lease sales.

The Railroad Commission of Texas (RRC) regulates drilling and production, not title. An operator needs a drilling permit (Form W-1), and the RRC asks only for a good-faith claim to the right to drill; it doesn't decide who owns what. Statewide Rule 37 sets spacing: unless field rules say otherwise, no well nearer than 467 feet to a lease or property line, or 1,200 feet to another well in the same horizon on the same tract. Rule 38 sets density. Check the field rules before you measure anything.

Texas does have a compulsory pooling statute, the Mineral Interest Pooling Act, but the RRC dismisses an application unless the applicant first made a fair and reasonable offer to pool voluntarily. Most Texas pooling runs on the pooling clause in each lease (unit 6).

Owner of the soil

The surface owner of Relinquishment Act land, acting as the state's leasing agent.

Free royalty

A royalty the state kept when it sold the land.

Field rules

RRC spacing and density rules for one field. Where they exist, they control instead of the statewide rules.

Good-faith claim

A factually supported claim to the right to drill, such as a valid lease. It's what the RRC needs to see, not proof of title.

Sources. Texas General Land Office, Guidelines for Leasing Relinquishment Act Lands (rev. May 13, 2025) and its mineral leasing page; Tex. Nat. Res. Code § 51.054(e), §§ 52.171 to 52.190; Greene v. Robison, 117 Tex. 516, 8 S.W.2d 655 (1928); Magnolia Petroleum Co. v. Railroad Commission, 141 Tex. 96, 170 S.W.2d 189 (1943); 16 Tex. Admin. Code §§ 3.37, 3.38; Tex. Nat. Res. Code ch. 102.

Answer question 4 in the blue book

The Oklahoma Corporation Commission (OCC) can pool the interests in a spacing unit whose owners haven't agreed on how to develop it. Unleased mineral owners, and working interest owners who haven't agreed, can be pooled. Overriding royalty interests, restricted Indian minerals and state-owned minerals can't. Pooling runs by spacing unit, for the formations named in the application.

1. Application. Anyone with the right to drill in the unit can file.
2. Notice. By restricted mail to each respondent and by newspaper publication, at least 15 days before the hearing. It has to say the applicant used due diligence to find respondents and made a bona fide effort to reach agreement first.
3. Hearing. A landman for the applicant usually testifies to the bonus and royalty in leases actually signed in the unit and the adjoining units over the past year. Offers don't count; arm's-length leases do. The well's cost estimate (AFE) goes in too.
4. Order. It lists each respondent's choices: participate by paying a share of the well's costs, or take one of the bonus and royalty options. The higher the royalty, the lower the bonus.
5. Election. In writing, within the time the order allows: at least 20 days from the order date, unless the Commission directs otherwise.
6. No answer. An owner who misses the deadline is deemed to have taken the default, which the OCC describes as the option with the smallest royalty and the largest bonus.

Spacing unit

The area the OCC assigns to a well in a common source of supply.

Respondent

An owner named in the pooling application.

Election

An owner's written choice among the options in a pooling order.

AFE

Authority for expenditure: the operator's cost estimate for the well.

Sources. 52 O.S. § 87.1; Okla. Admin. Code 165:5-15-3; Oklahoma Corporation Commission, Oil and Gas Conservation Division, The Pooling Process in Oklahoma.

Answer question 5 in the blue book

Read an oil and gas lease (OGL) clause by clause, in this order.

Granting clause

What's leased: the land, the substances, sometimes the depths. A Mother Hubbard clause picks up small strips the lessor owns next to the described land.

Habendum clause

A primary term of years, then as long after that as oil or gas is produced. In Texas that means produced in paying quantities: enough to return a profit over operating and marketing costs, even if the well never pays back what it cost to drill.

Royalty clause

The lessor's share of production, free of the costs of production. Who bears the costs after production (gathering, compression, transportation) turns on where the clause values the oil or gas, so read the valuation point before any "no deductions" sentence.

Delay rentals

An older "unless" lease ends on its own if, by the rental date, the lessee hasn't started a well or paid the rental. A paid-up lease has no rentals to miss.

Shut-in royalty

Keeps the lease alive while a well that can produce is shut in, if the payment is made when and how the clause says.

Pooling clause

In Texas a lessee generally can pool only if the lease gives the power, and only within its limits.

Pugh clause

Without one, production from a pooled unit that takes in part of the lease usually holds the whole lease. A Pugh clause releases the land outside the unit, usually at the end of the primary term or a set time after. Some also release depths below the deepest producing formation; people call those horizontal or vertical Pugh clauses, not consistently, so go by the words.

Proportionate reduction

If the lessor owns less than all the minerals, royalty and rentals shrink to the lessor's share.

Sources. Clifton v. Koontz, 160 Tex. 82, 325 S.W.2d 684 (1959), for paying quantities. The pooling and Pugh points describe common Texas practice; the words of the lease and current Texas case law control, so check both.

Answer question 6 in the blue book