Opinion ID: 8410702
Heading Depth: 2
Heading Rank: 1

Heading: Hydrocarbons in the Ground

Text: Since this case involves a pre-severance conveyance, the M& M Intervenors spill much ink on Louisiana's approach to hydrocarbons still in the ground. In the words of the M& M Intervenors, [w]ell-settled Louisiana law [says] that one cannot own hydrocarbons until they are severed from the ground. And they are quite right; in Louisiana, underground oil and gas are fugitive minerals ... at large beneath the surface of the earth [and] are not ... the subject of private ownership, as defined in the Civil Code. Frost-Johnson Lumber Co. v. Salling's Heirs , 150 La. 756 , 91 So. 207 , 212 (1920). As a result, ATP could not possibly convey (and OHA could not possibly purchase) outright ownership of underground hydrocarbons. Yet, this principle by no means forbids a landowner or lessee from conveying pre-extraction mineral interests. Apart from outright ownership of the fugacious hydrocarbons, there remains the right to sever and appropriate them, which right, of course, [the landowner] may cede to another. Allies Oil Co. v. Ayers , 152 La. 19 , 92 So. 720 , 720 (1922). It is that right-the right to explore for and appropriate hydrocarbons produced-that the United States granted to ATP. And it is from that right that OHA's overriding royalties owe their existence.