The explosion of oil and gas leasing and drilling in the Barnett Shale game has made a topic that has always been a nuisance to the oil and gas industry a major problem. When an oil and gas producer accepts a mineral lease from a mineral owner (who may or may not hold surface rights), that lease is subject to the rights of all former stock exchangers of the owner, including all mortgage holders. If the oil and gas lease precedes the mortgage, the mortgage is obviously subject to the lease agreement and the problems discussed below do not arise. (Note that this discussion starts with a timely registration of all instruments in real estate records.) If the mortgage precedes the lease agreement, the oil and gas producer would ask the mortgage holder to make the mortgage subordinate to the rental of oil and gas. In case of subordination, when the mortgage is seized, the lease remains in force. In the absence of subordination, the enforcement of the mortgage will destroy the rental of oil and gas. Rapid progress towards the American slate revolution, which began a rush of landlords who bought thousands and thousands of oil and gas leases. In areas such as the Barnett Shale, many leases covered real estate located in densely urbanized areas, largely subject to previously registered mortgages. Until 2015, lenders were constantly being asked for subordination agreements and many borrowers faced overburdened and lazy mortgage service providers who knew little about the oil and gas industry. (1) to execute and recognise the contract of subordination before a notary;  and the law deals with the following situation: an oil and wasted contract is concluded on the mineral domain on land already mortgaged.

The mortgage is then garnished. In this case, the law provides that the rental of oil and gas does not stop, even if the lease would not have been subordinated to the mortgage. During the forced sale, the buyer is interested in the property that is the subject of the rental of oil and gaspé. As such, the law creates a legal subordination of the previous mortgage to a subsequent lease of oil and gas. (2) send to the broker, by registered letter, repeat offender or registered letter, a copy of the registered memorandum required by this paragraph. To better explain it, let`s take a step back. One of the most common securities issues that can impact oil and gas leasing, and one of the common causes of headaches for Texas tenants are charges that were established before the oil and gas rental, such as mortgages, fiduciary contracts, and deposits. In Texas, buyers generally take back ownership of real estate claimed by third parties on the same property as long as the buyer has actually made the decision on the previous instrument or constructive notification, if the previous instrument has duly filed in the corresponding public records. [1] See Noble Mortg.

&investment, LLC v. D&M Vision Investments, LLC, 340 S.W.3d 65 (Tex. App.-Houston [1st Dist.] 2011, no pets); § 13.001 (a) (West) (“A transfer of immovable property or an interest in immovable property or a hypothec or fiduciary instrument is voidable in respect of a creditor or subsequent buyer against valuable consideration without notice, unless the instrument has been recognized, sworn or proven and submitted for registration, as required by law.”). Oil and gas producers who hold these leases will benefit from legal subordination. Last but not least, they save the considerable time, expenses and costs invested in securing subordinations. However, manufacturers should be aware of the potential impact on surface rights.. . .