Due Diligence & Title Opinions Flashcards
7 cards from real CPL practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Due Diligence & Title Opinions flashcards as text
A 'division order title opinion' is specifically designed to:
Answer: Establish the decimal interest for each revenue owner prior to first production payment
A division order title opinion establishes the ownership percentages so the operator can properly disburse production revenues to each interest owner.
The 'warranty clause' in a mineral deed primarily protects the grantee by:
Answer: Obligating the grantor to defend the title against lawful claims
A general warranty clause binds the grantor to defend the grantee's title against all claims, strengthening the chain of title.
Which of the following situations would most likely constitute a 'title failure' that triggers a lease's title failure clause?
Answer: A court adjudication that the lessor owned no mineral interest at the time of leasing
Title failure occurs when a lessor is found to have held no title to the minerals conveyed in the lease, typically triggering refund of bonus and rental payments.
When reviewing heirship affidavits during a title examination, the landman must verify that they:
Answer: Identify all heirs and are executed by disinterested parties with knowledge of the decedent
Valid heirship affidavits must be made by disinterested persons with knowledge of the family to establish title through intestate succession.
A 'mother hubbard' or 'cover-all' clause in an oil and gas lease is intended to:
Answer: Capture small strips or parcels inadvertently omitted from the property description
A mother hubbard clause covers small adjacent strips or parcels the grantor may own that are not specifically described, preventing gaps in coverage.
In examining title to a tract, the landman finds a recorded 'lis pendens.' This instrument signals that:
Answer: Litigation is pending that could affect title to the property
A lis pendens provides constructive notice that pending litigation may result in a judgment affecting ownership or encumbrances on the property.
What is the primary purpose of a 'Paid-Up Lease' structure in oil and gas leasing?
Answer: To eliminate the requirement for annual delay rentals by paying one lump sum at execution
A paid-up lease requires a single upfront bonus payment covering the entire primary term, eliminating the need for annual delay rental payments to keep the lease alive.