Dodge City Daily Globe - Dodge City, KS
  • Ford County seeing surge of interest in title searches

  •      Each weekday, visitors to the Ford County Government Center will see people gazing at their laptop computers, searching for information.

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  • Each weekday, visitors to the Ford County Government Center will see people gazing at their laptop computers, searching for information.
    They are tracking down land records, searching for information on the oil, natural gas and mineral rights tied to each property.
    Ford County has seen a surge of interest in oil and gas leases over the past six months, Register of Deeds Brenda Pogue said in a Dec. 29, 2011, interview. She said her office received only 195 documents related to oil and gas leases between 2001 and 2004, but the total jumped to 2,164 between 2005 and 2008.
    Pogue's office received 781 documents relating to oil and gas leases in 2010, but the total for 2011 had risen to 1,262 as of Dec. 27. Those numbers apparently had not changed by the end of the year.
    The office received 125 requests for memoranda of oil and gas leases between Dec. 21 and 27 alone.
    Pogue's staff is also seeing a surge in the number of people doing land title searches — so much so that her office has limited the number of people who can be in the vaults at one time.
    Pogue said about 60 searchers were in her book room at one point this summer, but the state fire marshal told her she could only allow 13 at a time. To reduce crowding, she started requiring searchers to sign in for an hour at a time, allowing her to rotate people in and out.
    Today, the office allows 10 people per hour in the book room.
    "Sometimes the company sends two people. Sometimes these companies send up to 30, maybe 40 people," Pogue said. "We can't allow that many in our back room plus my office help.
    "Or, if you would come in and you want to look as a taxpaying person in our public, we want you to be able to come in and ask to look at our land books for your instruments. And so, we need to be able to have space to take you back there and show you your property or whatever."
    Pogue said her office must also accommodate local businesses doing title searches, including banks and title companies.
    To cope with the demand, the county has started renting laptop computers to people doing title searches. The laptops are available from the information technology office for $10 a day and can be used on the mezzanine and fourth floor, but they cannot leave the building.
    Second wave
    County Administrator Ed Elam said the county is experiencing its second wave of intense interest in property rights. The first phase focused primarily on wind rights, due to the wind farms in the area, while the current phase is focused on oil and gas rights.
    He said the spike of interest began about 18 months ago and could last until April.
    Page 2 of 3 - "Oil exploration is kind of a big deal right now," Elam said. "We've had several oil wells developed (in southwest Kansas) in the last 12 to 18 months, which is driving the interest of developers."
    He noted that other southwest Kansas counties are experiencing a similar surge in title searches.
    Price factors
    The cost of oil and gas leases is driven by a variety of factors, including the location of the property and the kind of development project the oil company is considering, said Gordon Stull, a Pratt attorney who specializes in oil and gas cases.
    "I've seen leases for $5 to $10 an acre, and I've seen leases over $1,000 an acre," he said.
    Stull said lease terms vary depending on the oil company's needs. For instance, if an oil company is planning to drill right away, it may seek only a short-term lease.
    But with horizontal drilling, the lease usually lasts about three years with an option for a two- or three-year extension. In case of an extension, the oil company will pay the landowner the same bonus rental as before — or sometimes a little more.
    Stull said in some cases, the fact that landowners can earn additional money by selling oil and gas rights has driven up the value of their property. That's because anticipation of oil drilling in that area makes the land more valuable.
    How it works
    Oil companies are constantly looking for new areas of development, which explains the surge of interest in title searches, said a man who is responsible for a crew doing title checking and leasing. He spoke on condition of anonymity to protect the interests of his client, whom he declined to identify for the same reason.
    "The technology of directional drilling has made the Mississippian formation a very viable producing zone," he said.
    The supervisor was referring to the horizontal Mississippian play, which covers 160 miles from east to west and 100 miles from north to south along the Kansas/Oklahoma border.
    The supervisor said oil companies are already confident that the Mississippian formation can generate oil because the area has already seen some oil production. But new technology — such as directional drilling — makes it easier to extract the oil.
    Directional drilling, also known as slant drilling, is the practice of drilling non-vertical wells to reach oil or gas deposits. The supervisor said the new technology produces a much higher success rate and longer production.
    The supervisor said title searchers typically perform two types of research, starting with a quick check to see if documents show that someone has an interest in a property.
    "That can give us enough information to pursue people to lease," he said.
    Once the lease is secured, searchers conduct a more thorough check tracing the chain of title from the original patent to the current owner. That search can last a week or more, depending on how complex the chain is.
    Page 3 of 3 - "What we're looking for is just a consistent transfer of ownership," the supervisor said. "Find out if there's been any separation of the surface interest from the minerals, if the minerals have been divided into smaller pieces."
    He said this sometimes happens with an inheritance, where mineral interests are divided among several owners. In such cases, searchers must track down every owner.
    The people conducting the title searches are independent contractors, which is standard practice throughout the industry, the supervisor said. He said prospects can change rapidly, so searchers are frequently reassigned to new areas.
    Sometimes companies hire local people to conduct title searches, depending on the region.
    "If there are enough local folks, obviously that's to the client's best advantage," the supervisor said. "But oftentimes, there just aren't enough people in the immediate area with the experience that's needed."
    Reach Eric Swanson at (620) 408-9917 or email him at eric.swanson@dodgeglobe.com.
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