Unscheduled Mineral & ORRI Interests in Bankruptcy

Key record questions

1. Scheduled abandonment versus unscheduled property

   Under 11 U.S.C. Section 554(c), property that was properly scheduled under Section 521(a)(1) and not otherwise administered at the time of the closing of a case is abandoned to the debtor. By contrast, under Section 554(d), property of the estate that is not abandoned and not administered in the case remains property of the estate even after the case is closed.

   Record source

   Bankruptcy docket & county clerk

   Output

   Graded finding in the trace report

2. Overriding royalty interests vs. perpetual mineral interests

   When tracing an unscheduled or remnant interest, the first record question is what kind of interest the debtor held. A perpetual mineral or royalty deed survives lease expiration, whereas an overriding royalty interest (ORRI) carved out of a specific oil and gas lease generally terminates when that lease expires by cessation of production, unless the creating assignment contains an anti-washout or renewal-and-extension clause.

   Record source

   Bankruptcy docket & county clerk

   Output

   Graded finding in the trace report

3. Checking lease survival and current well status

   Before reopening an estate or recording a curative assignment, we pull the creating instrument, the underlying oil and gas lease, and state conservation agency production records to establish whether the lease or unit was still held by production during and after the bankruptcy case.

   Record source

   Bankruptcy docket & county clerk

   Output

   Graded finding in the trace report