1. B
The AAPL Code of Ethics establishes that it is the duty of the land professional to promote and represent the industry to the public in a fair and honest manner with the view of establishing and maintaining goodwill between the industry and the public. Fair and honest dealing with landowners, industry associates, and the general public is fundamental to preserving the integrity of the profession.

2. C
In the PLSS, a section contains 640 acres. The NE 1/4 of a section is 160 acres (640 ÷ 4). The SW 1/4 of that quarter is 40 acres (160 ÷ 4). This calculation follows the standard subdivision method where each quarter reduces the acreage by one-fourth.

3. B
The rule of capture is a foundational principle in oil and gas law stating that a producer acquires title to all oil or gas produced from a well on its land, regardless of whether some of that oil or gas migrated from beneath an adjoining tract. This rule was adopted because oil and gas are considered fugacious (capable of movement) substances.

4. A
A paid-up lease is one in which the bonus payment plus all delay rentals for the entire primary term are paid in a lump sum at the time the lease is signed. This eliminates the need for annual rental payments and reduces administrative burden for both parties.

5. B
The non-consent penalty in a JOA (typically 100% to 300% of costs depending on the agreement and state) allows consenting parties to recover a multiple of the costs and expenses of drilling before a non-consenting party receives their share of production. This compensates consenting parties for taking on the full risk of the operation.

6. C
A Division Order Title Opinion is prepared after a well is completed to calculate and specify the fractional ownership interests of all parties entitled to share in production. It forms the basis for division orders and royalty payments.

7. B
The correlative rights doctrine limits the rule of capture by ensuring each owner of a common reservoir is entitled to their fair share of recoverable oil or gas beneath their property. This doctrine prevents unreasonable drainage and protects the rights of all owners overlying a common reservoir.

8. B
A shut-in royalty is a payment made by the lessee to the lessor when a well is capable of production but is not actually producing (typically due to lack of market, pipeline access, or other circumstances). It keeps the lease in effect during the shut-in period.

9. B
A township in the PLSS contains 36 sections, arranged in a 6×6 grid. Each township is 6 miles by 6 miles, covering 36 square miles total.

10. B
The pooling clause grants the lessee authority to combine or pool the leased premises with other lands to form a single drilling unit. This is essential for meeting spacing requirements and efficient development of oil and gas resources.

11. B
Net mineral acres (NMA) represents the actual mineral ownership interest in a tract, accounting for any fractional interests. For example, if someone owns 50% of the minerals in a 100-acre tract, they own 50 net mineral acres.

12. B
The AAPL Standards of Practice prohibit a landman from accepting compensation from more than one principal for providing the same service, or from more than one party to a transaction, without full knowledge and disclosure to all parties involved.

13. A
Compulsory pooling statutes allow drilling to proceed when not all mineral owners consent, protecting correlative rights and preventing waste. They prevent hold-out owners from blocking development and ensure all owners receive their fair share of production.

14. A
An overriding royalty interest (ORRI) is a royalty in excess of the landowner’s royalty, typically created out of the working interest. ORRIs are often retained by landmen, geologists, or brokers who participate in assembling a drilling project and are tied to a specific lease rather than the mineral estate.

15. B
The primary term is the initial period specified in the lease during which the lessee must begin drilling or production operations, or pay delay rentals to maintain the lease. It represents the exploration phase before production is required to extend the lease.

16. B
A cloud on title is any encumbrance, claim, or condition that puts ownership of real property into question. Examples include unreleased mortgages, liens, probate issues, or fraudulent conveyances that must be resolved to establish clear title.

17. B
The AAPL Form 610 is the standard Model Form Operating Agreement used for Joint Operating Agreements, particularly for onshore operations. It establishes the rights and obligations of operators and non-operators in joint development activities.

18. C
A section in the PLSS contains 640 acres, which equals one square mile. This is the basic unit of subdivision within the rectangular survey system.

19. B
Delay rentals are periodic payments (typically annual) made by the lessee to the lessor to maintain the lease in effect during the primary term when drilling has not yet commenced. In modern “paid-up” leases, these are often included in the initial bonus payment.

20. C
The mineral estate typically includes five rights: the right to develop, the right to execute a lease, the right to receive bonus consideration, the right to receive delay rentals, and the right to receive royalty payments. The right to construct permanent residential structures is a surface right, not a mineral right.

21. A
An affidavit of heirship is a sworn statement used in title curative work to establish the heirs of a deceased property owner when formal probate proceedings were not conducted. It helps establish chain of title and identify rightful owners.

22. B
Working interest is the operating interest in an oil and gas lease that entitles the owner to explore, develop, and operate the property. The working interest owner bears the costs of these activities and is entitled to production minus royalty burdens.

23. B
Pooling combines separate tracts to meet spacing requirements for drilling a single well, while unitization typically involves field-wide or reservoir-wide combination of interests for secondary or tertiary recovery operations. Unitization operates on a larger scale and often involves enhanced recovery methods.

24. B
A Pugh clause (also known as a Freestone rider) limits the lessee’s ability to hold non-producing lands or depths beyond the primary term of the lease. It prevents operators from holding large acreage positions indefinitely with limited development.

25. B
The AAPL Code of Ethics requires landmen to exercise utmost good faith and loyalty to their employer and not act adversely or engage in enterprises that conflict with the employer’s interests. Working for a competing company in the same geographic area without disclosure is a common ethics violation.

26. B
Range lines in the PLSS run North to South, parallel to the principal meridian. They establish the east-west position of townships relative to the principal meridian.

27. B
A stand-up title opinion is based on an examination of public records conducted at the courthouse or county clerk’s office, as opposed to examining an abstract of title. The term comes from the historical practice of reviewing records at tall, slanted desks.

28. B
The habendum clause (also known as the “to have and to hold” clause) defines the duration of the lease, typically establishing the primary term and the conditions under which the lease may extend into a secondary term through production.

29. B
A division order documents each party’s decimal ownership interest in a well and authorizes the operator to make payments of production proceeds. It serves as agreement between the royalty owner and the company regarding ownership percentages.

30. A
The AAPL holds trademarks on designations such as “CPL” and “RPL.” Using these titles without proper certification constitutes fraud and violates the Code of Ethics. AAPL members have an obligation to report improper use of these designations.

31. A
In PLSS nomenclature, “T3N, R5W” indicates Township 3 North (three townships north of the baseline), Range 5 West (five ranges west of the principal meridian). This provides the geographic location within the survey system.

32. B
The bonus payment is a one-time payment made at lease signing for the right to explore for and produce oil and gas. It is paid regardless of whether oil or gas is ever found and is typically calculated on a per-acre basis.

33. B
The ownership-in-place theory holds that landowners own a corporeal possessory interest in oil and gas beneath their land, similar to a fee simple, but subject to the rule of capture. Texas is a primary example of a state following this theory.

34. B
A Mother Hubbard clause (also called a cover-all clause) is intended to include in the lease any adjacent lands that may have been inadvertently omitted from the legal description. It provides protection against gaps in the lease coverage.

35. B
An Authority for Expenditure (AFE) is a document prepared by a party to a JOA that estimates the costs to be incurred in conducting a specific operation, such as drilling a well. It serves as both a cost estimate and request for approval to proceed.