Story By Terence West |EnergyPortal.eu| The New Mexico Supreme Court has ruled in favor of an oil company in a dispute with a private landowner over underground mineral rights in Eddy County. This decision allows the company, Premier Oil and Gas of Artesia, to proceed with drilling on the land.
The court’s unanimous verdict on July 13 came after a legal challenge by potential heirs of the previous owners of the mineral rights. However, the court determined that Premier was the rightful purchaser of the rights, as there were no claims against the purchase at the time of acquisition.
The dispute began when potential heirs claimed that a district court had wrongfully granted heirship to another person who subsequently sold the rights to Premier. They argued that the sale was invalid because not all heirs were accounted for. In 2020, a New Mexico Court of Appeals verdict invalidated the district court ruling but upheld Premiers claims to the mineral rights as a “good faith” purchaser.
The mineral rights in question were originally owned by Herbert and Marie Welch in the 1970s. After Herbert Welch’s death in 1975, Marie Welch became the sole owner of the rights. When she passed away in 1988, a cousin named Samuel Alderman was entrusted with her will. However, Alderman did not come forward with the will, despite attempts to contact him.
The estate remained unprobated for about 20 years until Marie Welch’s nephew, Ralph Griffin, filed a petition in 2007 to determine heirship. Griffin claimed to be the sole heir of Marie Welch and was granted title to the minerals by the district court. He later transferred the mineral rights to Griffin Minerals LLC, which then leased the rights to another party.
Premier became interested in the leasehold in 2010 and conducted a thorough investigation of the title. They discovered the 1974 will and the 2007 judgment, which led them to conclude that the purchase would be valid. Premier purchased the mineral rights in March 2010.
READ NEXT: A Beginner’s Guide to Leasing Mineral Rights
In 2012, Alderman resurfaced and petitioned the court for a formal probate of the 1980 will. Several family members claiming to be heirs of Herbert Welch’s estate also filed a counterclaim, arguing that they had an interest in the mineral rights. There was a series of court battles, with the district court ruling in favor of Griffin and Premier, and then the Court of Appeals reversing that decision.
However, the Court of Appeals still acknowledged Premier as the bona fide purchaser of the rights, as they had no notice of potential adverse claims when acquiring the rights. The Supreme Court upheld this finding, stating that purchasers like Premier should be able to rely on previously believed valid court judgments when acquiring properties. The court emphasized that ruling otherwise would undermine public trust in the judicial system.
In conclusion, the New Mexico Supreme Court’s decision has upheld Premier Oil and Gas’ ownership of the mineral rights in Eddy County. This ruling allows the company to proceed with its plans for drilling on the land.
