Types, Nature and Scope of Title Opinions

I. TYPES AND PURPOSES OF TITLE OPINIONS

A. Lease Acquisition Opinions

A title opinion prepared for lease acquisition purposes determines either the mineral ownership for the purpose of obtaining a lease, or the ownership of an existing leasehold interest which is to be assigned in whole or in part to the client requesting the opinion. The lease acquisition opinion advises the client of unleased mineral interests and the net revenue interest represented by the leasehold interests being acquired. An acquisition opinion is most frequently requested prior to payment of the bonus or acquisition payment for oil and gas leasehold interests. A client is primarily interested in matters which directly pertain to his purchase of a leasehold estate in the lands under examination. Matters such as surface ownership or the death of a fee landowner after execution of an oil and gas lease should be noted so that a subsequent drilling or division order opinion need not be undertaken from scratch, but such facts should be clearly identified as advisory or informational for the purposes of the acquisition opinion.

B. Drilling Opinions

A drilling title opinion (also referred to as a base title opinion, preliminary title opinion, or original title opinion) establishes the status of fee and leasehold title prior to drilling operations. It focuses on adequate leas