Back to Publications

Busted Title: Minimizing Risks From Title Uncertainty and Loss of Title

S. Thomas Throne , Proceedings of 44th Annual Rocky Mountain Mineral Law Institute (1998)

The purpose of this paper is not to provide a detailed legal analysis for each of the presented problems. Instead, potential problems will be identified and alternative resolutions will be given.

Oil and gas exploration is a business with significant scientific risk: a geologist is attempting to predict the existence of oil and gas 10,000' below the surface of the ground using data from a 10" hole ten miles away. Geophysicists are attempting to predict the existence of a sand body [23-2] 10,000' below the ground using the readings of sound waves. However, the one risk that can be managed, and certainly minimized, is title risk.

The source of title problems emanates from many different places. The most common errors are created by drafting problems in preparation of conveyances. Sometimes these problems are a result of sloppy drafting, and sometimes these problems are a result of factual changes unknown at the time of the conveyance. Some of the problems are created by legislative change; some problems are caused by administrative rulings; and lastly, some problems are caused by changes in the law through court decisions. When all the possible claimants can be identified, the best solution to all of these problems is a negotiated settlement among the parties that contractually resolves the issues without judicial intervention.