Caney Valley National Bank v. Alexander (In re Wolfe)

MEMORANDUM OPINION3

JOHN T. FLANNAGAN, Bankruptcy Judge.

The question before the Court is whether the purchaser of a landowner’s oil and gas royalty at a trustee’s sale has the right to rescind the sale and recoup her purchase price, adjusted for royalties she received after the purchase.4 The parties have filed briefs with agreed facts. Principles from the netherworld of Kansas oil and gas law will clarify the nature of a Kansas landowner’s oil and gas royalty interest.

Kansas recognizes an ownership-in-place concept of oil and gas. Under this theory, ownership extends to oil and gas in the…