Your direct connection to mineral buyers

Frequently Asked Questions

Disclaimer:

All data and information provided on these pages, while believed to be accurate, is nonetheless provided for informational purposes only. The Mineral Hub, its owners, employees and writers make no representations as to the accuracy, completeness, timeliness, suitability, or validity of any information contained in these pages and will not be liable for any errors, omissions, losses, injuries, or damages arising from its display or use..

"Use or lose" mineral rights in North Dakota? Asked 09/11/2017
Q: I have inherited some mineral rights in ND. Can you tell me if they need to be maintained or renewed in anyway to retain ownership? They have previously been leased, but the leases expired in 2014 and were never drilled on. We did have the rights transferred so all are now properly deeded.
A: ND does have a statute stating that a severed mineral owner can lose their mineral rights after 20 years if they do not take steps to retain them when it is not obvious (i.e. royalty checks or lease bonus within past 20 years) that they are "using" them.

The law only applies to SEVERED mineral interests. If you own the surface AND all the minerals under it, then you don't have to worry about abandonment because they will vest to the current surface owner (you) anyway in the event they become subject to "abandonment".

N.D.C.C. § 38-18.1-04. See N.D.C.C. § 38-18.1-02. "Title to the abandoned mineral interest vests in the owner or owners of the surface estate in the land in or under which the mineral interest is located on the date of abandonment."

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub

Leasing Tips Article? Asked 09/09/2017
Q: We were contacted by McLinn Land Services to lease mineral rights. They offered $3900/acre plus 3/16 royalty. This morning, my brother was contacted by another company wanting to talk us about leasing. How can we verify we\'re getting the best deal?
A: Read my Leasing Tips article on The Mineral Hub "Articles" page...which will provide some good negotiating and other leasing tips as to how to get the "best deal".

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Oil and gas lease payment division Asked 09/08/2017
Q: My brother and I are joint tenants and have received a check from the oil company. The check is made out to both of us and we both must sign to cash. My brother has the check and will not split the proceeds because he is mad at me. How can I get my portion?
A: If check is made out to both of you as JTIC, then brother would be REQUIRED to split the proceeds with you, and most banks would not cash the check unless both of you endorsed it so unlikely he could cash it without your signature. If you're already endorsed and given the check to him then hopefully he will have to deposit the proceeds into a joint account where you can withdraw your share.

If he is simply refusing to cash the check you might have to sue him to make him go to the bank with you to cash it. If the check isn't very big it's probably not worth getting an attorney involved.

You could also ask the oil company to issue you a check for just your share, but I doubt they will do that if you are in fact JTIC. Maybe time to dissolve the JTIC if it's causing you problems. If the lease ends up producing, the royalty checks will come in BOTH your names just like this check did and you may have the same problem again.

You can search Google easily enough for what is required to terminate a joint tenancy.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Bought Home with Current Lease intact Asked 09/07/2017
Q: I am closing on a home in Grayson Co texas in a couple of weeks. When the seller signed the contract for the home he did not \"remember\" he wanted to retain mineral rights. I informed him I would not give up mineral rights and he was expected to stick to the contract as written. A couple of weeks later his agent sent over a lease he signed a month before we went under contract for the property. In contacting the Oil and Gas company and the title company I understand the lease will transfer to me as the new owner. My question is if he signed a 4 year lease did he get the 4 years up front? If so wouldnt I be owed 3 years 10 months of that?\n\n
A: He likely got paid a one-time signing bonus when he signed the lease, based on a certain dollar amount per net mineral acre owned under the tract of land he sold to you. You won't be able to recover any of that since he signed it prior to the sale.

The lease will transfer to you, though you might want to notify the lessee that you are the current owner of the minerals if you haven't already (they will want a copy of the signed conveyance into you as "proof" you now own the mineral rights).

If production occurs, you will receive any royalty benefits stated in the lease for as long as the lease produces and you own the minerals, and will continue to be bound by its terms until production from the leased premises ceases or until you sell the mineral rights.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Net Mineral Acre Definition? Asked 08/30/2017
Q: I own mineral rights in several OK counties. I have two hundred acres of mineral rights located in Dewey county OK and have received 8 purchase offers from several different companies in the past two months. The best offer was for $7500 per \"NET\" acre, what is meant by the term \"NET\" acre in a purchase offer?
A: The answer to your question can be found here:

http://bfy.tw/Dr1e (copy and paste link into your browser)
Too late for Lessee to extend OGL 2 more years? Asked 08/24/2017
Q: I signed a 3 year OGL on 7/1/14 with an option to extend for 2 years. Now that the primary term has expired, I haven\'t heard from the current lease owner if they want to extend or not. \n\nHow long before I can sign a new OGL with someone else? If they don\'t file an extension?
A: Since your primary term has expired already and they haven't notified you of any wish to exercise their extension option, nor filed anything of record, nor paid you the extension bonus, then I would say you are free to lease to anyone else who may be interested. You might also just ask the company to file a release of your lease in order to avoid confusion as to whether it was extended or not.

Most companies will notify you BEFORE the primary term expires if they plan to exercise any extension options, and should of course also pay you any extension bonus PRIOR to the initial primary term expiring in order to extend the lease another two years.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Who pays my royalty? Asked 08/22/2017
Q: If minerals are leased to x company for 1/4 royalty, and x company decides to participate using the leased minerals, when y company drills the well who pays the mineral owner the 1/4 royalty & how can the mineral owner track the progress of the well?
A: Potentially both could pay the mineral owner, but likely would be the operator paying all royalty due (company x would pay the operator what they owe you and operator would forward to you and include on your check for their share).

You can track the progress/production of the well by going to the state website having to do with minerals (most states have them) and view the monthly production there as reported by the operator. Alternatively you could require in your lease that you be allowed to go on the lease and gauge tanks and read gas meters.

The Mineral Hub
How to get royalty inheritance "in pay"? Asked 08/18/2017
Q: my husband past away in march of 2015 my sister in law sent me information about his BP royalties and said I needed to get a hold of B.P.to transfer everything into my name. Can you please tell me what I have to do to and what I may need to get this process started.
A: You need to contact the "owner relations" or "division order" department at BP either by phone or email. You can probably find their contact info online and go from there.

You'll need to provide them documentation showing you are an heir to your husband's mineral rights. A probated will or decree of distribution from a court would do the trick.

If it's a small interest they may accept simply an "affidavit of heirship" (which an attorney could prepare for you for a couple-hundred bucks probably) but in most states it's best to have a decedent's estate probated in order to properly transfer title to heirs.

A probate is basically just a court of law signing off on a will's validity, or in the event there is no will, the court, during probate, will "officially" determine who the heirs are.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Best way to go about getting leased? Asked 08/16/2017
Q: We have some Mineral rights in Alfalfa County and Woodward County in Oklahoma. Woodward is leased but we were thinking about leasing the Alfalfa mineral rights. What is the best way to go about getting it leased? We don't know where to start. We did work with a lawyer, who charged us a flat fee for a overview of what we owned, but is now refusing to answer any more questions unless we pay her hourly rate of $375 per hour.
A: Can't blame the attorney for wanting to be paid frankly. Law school is expensive. The good news is, you usually don't have to do much at all in order to "get leased", nor do you have to hire an attorney in order to get an offer, though a good attorney (at a reasonable rate) could potentially help negotiate the lease terms so they are more to your advantage before you sign. Alternatively you could join an organization such as NARO (National Association of Royalty Owners) for only $150/year or so and learn how to manage your minerals on your own though their conventions and educational materials.

The oil companies will usually find and contact you in the event they want to lease, and your main job in the event you are contacted is to negotiate the best lease deal you can with them, or perhaps decide to let them force pool you in the event they do want to drill a well and you can't reach a good lease agreement with them.

Since you haven't been contacted it's likely there is little or no leasing in your area currently and thus probably not the best time to lease anyway (no activity means lower lease bonus etc.)

You could technically contact companies that may be leasing in the area on your own by searching the county clerk's records for your township and range to see which companies, if any, have filed leases in your area recently, but in most cases it's better to wait until they contact you as that puts you in a better bargaining position in most cases (you have something you know they want because they contacted you first).

If you're not sure your contact info can be found in the county clerk's records (from an old lease or deed or other document already filed there) you might consider filing a "notice of address" or similar document that contains your current contact information, but in most cases the oil companies are pretty good at finding and contacting mineral owners in areas they are interested in leasing.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Dewey County, OK competing lease offers? Asked 08/14/2017
Q: Have minerals in 27-19-18 of Dewey Co. OK. My lease is expiring and current leaseholder (who say they\'re leasing for the operator, Continental) want to extend lease one year for $250.00. Have a competing offer from Southwest Energy for a 3-year lease at 1,000.00. Which is the better deal? Current lease holder says operator is planning to drill. If I lease to Southwest, does that hurt my chances of well being drilled?
A: No. Probably SW is offering more because they want a piece of the well (free look etc.) I doubt CR will fail to drill any well they were planning on anyway just because someone else leases you instead of them. I'd go with SW, or perhaps just tell CR you'll go with them IF they match the SW offer if you really feel better about leasing to CR.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Inherited mineral deeds North Dakota Asked 08/10/2017
Q: I am the representative for my husbands Mothers will. She left mineral deeds to her three children. Do I need to contact an attorney to transfer these deeds? What is the process?\nThank you
A: If you aren't sure what to do with the deeds, then yes, hire an attorney for advice. She may have executed what's commonly known as a "transfer on death" deed to each of her three children, in which case all they'd need to do is file them of record since ND recognizes such deeds. If you're not sure of the type of deeds they are have an attorney advise you.

Hope this helps you out!
Frederick M. Scott
The Mineral Hub
County is going to tunnel under my property. Asked 08/05/2017
Q: A County agency is planning to build a tunnel beneath my property, and several of my neighbors, in order to convey water from one reservoir to another, two miles away. The tunnel will be 650 feet deep in places. I do not own the oil and gas mineral rights below the surface of my property; nor, I suspect, do my neighbors own theirs. Do we, or the county agency, have to notify the mineral rights holders of this impending project?
A: I don't believe you have to notify the mineral owners. Not sure whether the county would be required to or not, but I'm sure they will figure it out.
Lease extension re-negotiation options? Asked 07/24/2017
Q: We signed a lease agreement 3 yrs ago with a two year option in Frio county Texas. They are wanting to cut the bonus money in half because they say can\'t afford it. But promise to drill on this 770 acres. We are in the Eagle Ford Shale. Should I just cut the deal in hopes of more wells or find another company in this depressed market. Also what would be an average bonus money in these times
A: If you agree to less bonus, you might ask for more royalty, or more royalty "after payout" (after they've recovered the cost of drilling the new well). Have an attorney draw it up if you go for the "after payout" option.

You could also just tell them "no deal" and have them file a release of your lease with the county clerk then hopefully find someone else to lease from you for a better price. If you like/trust the company and want to work with them that's fine too of course, but I would try to get something in return for agreeing to 1/2 the promised bonus rather than just letting them have the extra two years for half price.

For instance, you might tell them you'll agree to lease for one additional year for half price, but not two. This might entice them to drill faster but would still mean you'd get less bonus, which is why I'd see about getting more royalty instead in the event you want to work with them.

Finally, you might be able to negotiate an "overriding royalty interest" from them, which would basically give you a share of THEIR income from the well (assuming they drill a producing well), in addition to your royalty. This is also something you'd want to have an attorney draw up for you if you're not sure what an ORRI is.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
Put wife's inherited minerals into both our names? Asked 07/23/2017
Q: What is the easiest/best way to add my name to my wife\'s inherited mineral rights...so both of our names will be listed??\n(Oil companies have not responded to the request via simple correspondence.)
A: Have an attorney draft a deed from your wife as grantor, to your wife and you as grantees. Pretty simple process. You can specify "joint tenants", or "tenants in common" etc. Have an attorney draft the deed and explain the granting options to you. Should only cost $100-$200 for an attorney to do that, and worth the cost to know it's being done correctly.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
Determining actual acres covered by a lease. Asked 07/20/2017
Q: Four parties inherited equal interests in mineral rights for a 160 acre parcel in Custer County, OK. Royalties are being paid under a lease made years ago now (1980s) on some part of 160 acres, None of us has a copy of the original lease, only the name of the current company. Can a company drill without having a copy of the lease available for review? How can we obtain copies of all leases to ensure the original terms are in effect? Will any lease have to specify which of the 160 acres is under the lease and the term of the lease? And, then may we determine which may still be offered for lease?
A: Likely the entire 160 acres are included in the drilling and spacing unit for the currently-producing well(s), thus, unless there is a depth clause or other restriction limiting drilling in the 1980s lease there is nothing stopping the company from drilling additional wells after getting permission from the state to do so. The 1980s lease will continue to be in force for as long as there is continuous production from the leased premises.

The current lease should be filed of record in the county clerk's office of Custer County. The company is not required to provide you a copy prior to drilling, but may if you ask them nicely. Otherwise you are free to make your own copy from the clerk's records.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
Ensure every owner has to sign prior to leasing any? Asked 07/20/2017
Q: Mineral rights on 160 acres in Washita County, OK are shared equally across four parties. What steps can be taken to ensure that all four parties signatures are required on any lease on any part of the 160 acres?
A: You would all four have to own them "jointly" in order for it to (possibly) be a REQUIREMENT that all four of you must sign in order to lease any of the 160 acres. If you each own an undivided 40 acres under the 160 acres (probably the case) then any of you could lease your 40 acres without joinder of the others. Best thing to do is simply to agree that none of you will sign a lease unless all of you agree to its terms.

Hope this helps you out.
Average percentage payable to mineral rights broker? Asked 06/27/2017
Q: Hello,\n\nI\'m simply trying to determine what the average broker commission is, for broker firms that represent sellers of mineral rights. Trying to sell mineral rights in northern Colorado, and am currently negotiating with a broker to represent our family (\"Sellers\").\n\nThank you!\nMatt
A: Why pay a broker at all when you could list them for sale on our "Sell Mineral Rights" page at the Mineral Hub for free? If we find a buyer for you, we would charge the BUYER a small commission on top of what you would receive. We don't charge our sellers anything, or reduce their sales price to cover the buyer fees.

As for what the "average" broker commission is, there really isn't one. Some will charge as much as they think they can get away with, and you may never be the wiser because they will make sure you never see it directly.

Some unscrupulous brokers will tell you they found someone to buy your minerals for $1000/acre (as an example) but will charge the buyer $2000/acre, keeping the extra $1000 for themselves without even telling you.

We don't play those kind of games, and are always willing to share the (very reasonable) fees our buyers pay us if our sellers are curious. This way everyone knows what's what and there are no secrets.

That's how ANY broker you're working with should behave frankly, and if they're not, then you are certainly taking a risk that they are making as much as you on the sale, which benefits neither you OR the buyer frankly.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Confusing deed includes "term" wording... Asked 06/27/2017
Q: I came across a joint tenancy warranty deed regarding the sell of my parents farm. The deed has this wording, \"LESS AND EXCEPT all minerals, including oil and gas, previously reserved in third persons; it is the intent that all term mineral interests revert to Buyer; and it is the intent that such reservation and exception shall apply to all properties conveyed. The \"Less and Except all minerals\" tells me that my parents did not sell the minerals with this property. However, it then says, \"It is the intent that all term mineral interests revert to Buyer.\" I apologize for my ignorance, but if I don\'t ask I won\'t find out... I do not understand what that clause means. Any help would be greatly appreciated. Thanks so much!
A: The "revert to buyer" language you mentioned initially confused me as it did you, as it seemed to go against the intent of your parents to keep the minerals and sell only the land.

The "reversion" language only confused me until I saw the word "term" however, at which point I realized you were probably dealing with a "term" (or time-limited) deed, which limited the amount of time your parents would retain ownership of the minerals.

Once the term (i.e. 20 years etc., and probably listed right there on the deed) ended the minerals would revert to the buyer who bought the land, or the heirs of same.

If you read the deed carefully I expect you'll find the length of the "term" in there somewhere, said term being the amount of time your parents, or their heirs, would own the mineral rights before they went to the buyer or his/her heirs.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Selling Mineral Rights in Northwest Oklahoma Asked 06/21/2017
Q: I have less than 10 acres in a section where there is a lot of\ndrilling activity right now. I have been offered $2,200 per acre\nfor my minerals. It looks like they are going to put 3 horizontal\nwells on one location. I don\'t know how many will be in \nmy section since I know they sometimes cross under the road\nand go into a different section. Even if the wells are really \ngood, since I have such a small amount of minerals - wouldn\'t\nI be ahead to sell my minerals ? It\'s going to take a long time\nto make $20,000 in royalties on 10 acres. \n\n
A: If there's "a lot of drilling" in your section right now, and you'd like to sell these, then I'd suggest listing them for sale on our "Sell Mineral Rights" page. Whoever it was that contacted you out of the blue with an (I assume) unsolicited offer is likely trying to buy them for less than market value.

If you want to email me the legal description or a copy of your lease I can look it up and tell you what I think they're worth. If you are already getting royalty checks then please include a copy of your most recent royalty check stub. I'd be happy to check it out. No obligation. My email is mineralhub@outlook.com.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
Manager
The Mineral Hub
Taxes on ND mineral rights sale? Asked 06/16/2017
Q: I inherited mineral rights in North Dakota in 2000. I\'m considering selling all or part of them but I want to estimate the tax liability before I do. \nBecause the sale would be a long term capital gain, the beginning value and sale price figure in to the calculation of the tax. Should I use the value at the time I inherited them or should I use their most recent lease price as the beginning value?\nAlso, how would I find the value of my mineral acres in 2000?\nAny ideas or people to contact are appreciated!
A: This is really a question for your accountant, though it's my belief that you will owe tax on any "gain" in the value between the time you acquired them and the time you sell, at the long-term capital gain tax rate of, I believe, 20%. For beginning value I think you probably want to use the inheritance date. A local landman or other oil and gas professional or perhaps an appraiser familiar with the area could estimate the value of the mineral rights in 2000 based on comparable sales (if any), lease prices at the time, activity in the area in 2000 etc.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Rushed to accept lease offer in Hughes County OK? Asked 06/15/2017
Q: I received an offer from a company called Calyx Energy for a lease on two tracts of land in Hughes county. They are wanting to do 3 wells total 2 in section 25 and 1 in section 24. The offer is for $400 nma with 1/16 royalty or take less money up front on lease and get more percentage on royalty the last offer on the page is for $150.00 nma and 1/5 royalty. This is all inherited mineral rights that we know really nothing about. So I called the company and asked how many acres do we have interest in and they said they don\'t know that. It would take them 6-8 weeks to get that information, but gave me only 10days to decide. The person I spoke to suggested I take the offer with the highest royalty, which makes since to me but I think I could make a much better more informed decision if I knew the total acres and how much the going rate is in the area. The lady said to make my option and send it in or it would be forced pooled. There is a hearing on Monday before the commission to get approval to drill the well. Should I be at that hearing? Is the offer I\'m getting reasonable? Should I ask to see a contract before I make the selection? Also is it normal for the energy company to not know the amount of acres I have an interest in when making an offer?
A: Calyx appears to be leasing in the northern part of Hughes County (i.e. 8N and 9N). They are also doing a lot of forced-poolings in that part of the county, and all I've seen recently are for $200/acre and 3/16 or less, indicating that the $400 and 3/16 (1/8 + 1/16 = 3/16) offer you received is probably not a bad offer assuming the other terms of the lease are good (i.e. no deduction clause, depth clause etc.).

I expect they are not bluffing (this time) when they say you will be pooled if you don't agree to a lease. Companies will Lord that over people's heads in Oklahoma unfortunately, especially when they are in a hurry, and they are in a hurry because there are other companies moving into the area as well (with similar lease offers though...none I've seen that are substantially higher).

6-8 weeks is a long time to get paid for a lease, and yes, it's fairly common for a company not know for sure what you own until they actually run the title. For now they have simply discovered that you own "something" here, and if you agree to lease they will spend the time and money to figure out exactly what you own so they can pay you correctly for your lease (assuming you make a deal that includes a bonus).

Since they claim they need 6-8 weeks to close, I'd suggest sending them only a copy (and mark it "Copy" in bold letters) of your signed lease, and keep the original at your home or attorney's office until they pay you the bonus. This gives them an incentive to pay you quickly since you could always lease to someone else if the opportunity arose after they passed their self-imposed limit of 6-8 weeks. I'm currently in that exact situation with another company I'm dealing with in Hughes County, and will soon be searching for others to lease my interest to if I don't get paid soon!

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
transfer of ownership Asked 06/12/2017
Q: We bought a house in Tarrant County with the mineral rights in 2012 and got busy and forgot to transfer the ownership of the mineral rights with xto until 2014 the preivous owner was still collecting the checks even though we had bought the rights. Is there anything we can do about the payments from 2012-2014?
A: Your only recourse would be to ask the previous owner to repay you for the royalty checks he was continuing to cash even after he sold the rights to you. It's unlikely the oil company will do anything since you only recently notified them of the transfer. If the payments didn't amount to much I wouldn't worry about it too much, as it's unlikely the previous owner will be anxious to repay you for anything and it may be more of a hassle than it's worth to try and get it.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
Manager
The Mineral Hub
$3000/acre good OGL offer in Grady County, OK? Asked 06/11/2017
Q: Is $3000 per net mineral acre (Paid Up) & 3/16th a good offer when leasing mineral rights in Grady County, Oklahoma? This is my 2nd offer in two weeks from two different companies and it is much higher than the first of $950.00 per acre. Wondering if there is a catch somewhere! \nThank you for your help,\nJoni Macrory
A: It's not a bad offer probably, but depending on where in the county your minerals are you might do better than that. I would suggest checking with your neighboring mineral owners if possible, or visit the OCC website (www.occeweb.com) and check forced-pooling orders for your township and the surrounding townships. If you find any recent orders (a year or less ago), the bonus amounts offered in the orders usually reflect the average bonus being paid for leases in the same area at the time of the pooling.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
Manager
The Mineral Hub
Lessee says I "have to" extend lease with them? Asked 06/06/2017
Q: I bought a forclosed property 2 1/2 yrs ago. I recently received a check and letter to extend an oil lease that the previous owner had signed. Since this was a forclosed property I new nothing about this lease. I requested? a copy of the lease and it does show the primary term being five years which was up this spring. No exploration? or drilling have been done. I do not want to extend the lease and the oil company is telling me it is not my option to extend or not! I can\'t believe this is true. And think they are just bulling me into signing an extension.
A: If you read the lease, there is probably an option-to-extend written in to it (likely near the bottom). I expect that is what they are referring to when they say it's "not your option". If there is such an extension clause in the lease, they will likely also owe you a "bonus consideration" (on a per-acre basis) equal to that they paid the previous owner when it was leased five years ago. Whether or not a bonus is payable would also be stated on the lease document.

The lease from the previous owner, and all its terms, carry over to you now that you are the owner of the minerals (I'm assuming the mineral rights were included in the foreclosure).
Lease Bonus Payout not received Asked 06/05/2017
Q: I was contacted by a landman leasing for a large energy company in Olahoma who wanted to lease my minerals in 2 sections in Dewey County. I sent both leases, and received 1 bonus check on the smaller tract, but have yet to see payment on the larger tract. It has been more than 90 days now, and when I contacted the landman he apologized, but said he would look into it.....still no check. Is there a time limit in which they have to pay when they have my signed lease?
A: Next time you lease just send them a copy of your signed lease (marked "do not file, original will be sent once payment is received"), and work out a time for them to pay you. Once you are paid, send them the original. Doing it this way instead of sending the original will provide a much greater incentive for them to get you paid in a timely manner.

In your current case you are kind of at their mercy unfortunately (because they already have your original lease). You will probably just have to wait them out. I'd keep bugging them though at least once a week. 90 days is too long to wait, and if they are so far behind that it's taking longer than that to pay people then they should hire more help. Period.

There is a company out there with the initials "P.M." that is currently taking a long time to pay ME for a lease. I wonder if that's the same company you're dealing with?

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
Manager
The Mineral Hub
Did primary term expire? Asked 06/02/2017
Q: This is what we are currently going through now. The lease agreed upon was for 3 years which was signed 4/23/13 term 4/23/16. There has been no drilling or producing well for an entire year after that contract was termed. They have recently started drilling again which was just last week therefore the primary term of the contract is over. As far as a secondary term, that wouldn’t apply because drilling stopped prior to the 4/23/16 term of the contract. Is this correct? Should they be sending another lease for us to review?
A: I would agree that the primary term would have expired had then not commenced "operations" to drill during the primary term, and continued with "due diligence" until a well was completed.

If they drilled a well during the primary term (you didn't specify) and then "abandoned" it until last week when they started drilling again (as you mentioned) then they will may claim the initial well was capable of production the entire time, but simply "shut in" and therefore DID extend the lease into a "secondary term".

Even if they didn't complete a well that was drilled during the primary term, they could argue that they have been trying to since then, and thus have been doing "continuous operations" that would extend the lease until the well is completed. While they may claim "moving dirt around once a week" qualifies as continuous operations, you may have a different opinion, in which case you might need to battle it out with them in court.

If you think they are playing games you'd need to get an attorney to hold their feet to the fire and "prove" they still have the lease and therefore can continue drilling without negotiating a new lease with you.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
Manager
The Mineral Hub
Activity on inherited oil property in OK? Asked 06/01/2017
Q: My sister Jane and I inherited, through our uncle Dooney and our father, a couple of small sites in Coal County a few years back. We had some dealings with Newfield back in 2011-2012, some hearings were held, etc.Is there a chance we should checkin and see if anything has changed with the new Trump rules??? I their exact locations, but don\'t know who to ask. Thanks.
A: If you want to check activity in the area you can find drilling permits, pooling applications/orders and other documents pertaining to your area on the Oklahoma Corporation Commission website (www.occeweb.com). There are also pay sites like www.pangaeadata.com and www.drillinginfo.com that will provide that info, and more. www.mineralrightsforum.com is another good site to visit to find out what other mineral owners in Coal County are saying is happening in the area.

Most of the activity in Coal County has been in either the central or northeast portion of the county.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub

Well pending. Offers to purchase received. Asked 06/01/2017
Q: Continental is going to drill our lease, we have had many offers to buy our mineral interests since we signed our lease in July 2016. Does the fact that they are going to drill there make our interests more valuable?? We have received at least 7 offers to buy some or all of our interest there and I have countered all of them with no success...... just wondering if the fact that they are intending to drill gives us leverage???
A: Depends on the buyer. I'd say it's more common to be offered more BEFORE the well is actually completed, than after. There is more anticipation prior usually, and more often than not the end result is less fabulous than anticipated. An exception might be when there are multiple permits, since then the minerals would be in a semi-perpetual state of drilling a new well.

Bottom line, if you've received 7 offers from different companies, then you are obviously in an area that's attractive to buyers. If you haven't sold them by now (sorry for the delayed response) then you might consider putting a "time limit" on any counter offer you make. If you get no response before time runs out then it's likely your counter is too high, in which case you may want to just accept the highest offer you've received.

Another option, of course, would be to list them for sale on this site (The Mineral Hub) and see if we can find you a buyer. You can use our Contact Us form or simply fill out a listing on our Sell Mineral Rights page if you want to go this route. There is no charge.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
HORIZONTAL WELL RELIEF BY MULIPLE COMPANIES Asked 05/26/2017
Q: We are the owners of mineral rights in McClain Country OK, we have been receiving documents pertaining to Horizontal Well and Multiunit Horizontal Well relief from 3 different operations for the same sections. Can all three be drill in the same area and how does that affect us as mineral rights owners? Our rights are leased already by a different company than the ones that are applying for relief.
A: You can look up these permits on the Oklahoma Corporation Commission website (occeweb.com). It's certainly possible that all three could drill, but I expect only one will end up being the operator at a time, and they will likely decide among themselves who that will be. The people who leased you were likely leasing for one of these companies.

The Mineral Hub
Can we sign new lease for different depth? Asked 05/20/2017
Q: We own 41nma in Sec. 25, 14N 14W in Custer County, OK. A new horizontal well drilled by Continental, the Edith Mae, is a decent well and should be about to start paying royalties. There is a lease in place (since the early 1980s I think) that is HBP by the Stubbs125 well, which was a horizontal well drilled back in 1982, I think. Is there a chance we can solicit new lease offers for this horizontal well if there was no depth clause on the original lease, or is it too late since the Edith Mae is already PDP?
A: If the Stubbs 125, and/or other wells have been producing since 1982 then you are stuck with the old lease and will be paid on the new Edith Mae well according to its terms, unless perhaps a new unit size has been established by the new well.

Had there BEEN a depth clause in the original lease, and the NEW well was deeper, only THEN could you have negotiated a new lease for the "deep rights" below the original Stubbs well. Having a depth clause is a GOOD thing for the lessor (you), not a bad thing, as it forces the oil company to have to negotiate with you again if they want to go DEEPER than the initial well that was drilled.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Transfer of inherited/devised mineral rights? Asked 05/19/2017
Q: Mother passed away in 1997. I probated her will, as Independent Executor, in Mc Lennan County, TX, with myself and my brother, now deceased, as sole heirs. Through contact from landman, I have recently found that mother held undivided ½ interest in all minerals under two tracts in Henderson County, TX. What should I do to transfer title to these interests to myself and my sister-in-law (my brothers’ sole heir)?
A: Since her will was probated, then the minerals would be transferred according to her will, or is not specifically mentioned in the will they would be transferred as part of the remainder of the estate using a clause to that effect that is common in most wills. If you were the executor I imagine you could have the minerals officially transferred to each of you by having an attorney draft up a deed from the executor to each of you.

Hope this helps you out!
The Mineral Hub
Sale of mineral rights in Wyoming Asked 05/17/2017
Q: My sister and I are about to inherit mineral rights in Campbell County, WY. A company appraised them for about $76,000 but oil and natural gas prices were a bit higher then so I imagine their value now is somewhat lower, if there is indeed a buyer interested. The gross acres involved is about 1600 and net mineral acres about 200. I know there are a few wells on the property producing but most of the activity there has been abandoned or shut in. Do you have thoughts about production in that area and whether selling these rights will be easy or not? Thanks
A: There are several active areas in Wyoming where mineral rights could be worth several thousand dollars per acre. Other areas not so much. If you're looking to sell them please fill out our Sell Mineral Rights page (linked to all our pages) and we will contact you if we think we can find a buyer for them at a fair price. If you don't want to fill out the form you can just use the Contact Us link and provide a legal description and we'll look them up and get back to you.

The Mineral Hub
Mineral Rights in Blaine County, Montana Asked 05/13/2017
Q: I own mineral rights in three tracts of Blaine County, Montana, situated in Townships 31 and 32, that have never produced. Worth hanging onto for future generations or consider selling due to current financial needs? Thanks.
A: If no activity for years (i.e. never produced) then the mineral rights are probably not worth much currently anyway, especially if they've never been leased either. I'd hang on to them unless you really need the money. No telling what new technology might allow to happen in the future.

The Mineral Hub
Disposal Well? Asked 05/08/2017
Q: can a surface owner sell the surface to an oil company who planed on using it for a disposal injection well location? My mineral deed says i have the right of ingress and egress at all times purpose of mining drilling exploring operating developing said lands for oil gas other minerals and for storing handling transporting and marketing the same therefrom with all rights to remove from
A: Yes, he can. The mineral deed gives you the right to produce the minerals under the land but doesn't give you the right to say what happens on the land (unless you own the land too). You could potentially argue (in court) that a disposal well on the property would devalue your mineral rights but that could get expensive.

The Mineral Hub
When will drilling pick up in Reeves Co, TX? Asked 05/07/2017
Q: I recognize that if you could give me an exact answer you\'d be extremely wealthy. That being said I\'ve currently got 7.5 net acres under lease @ 1/4 royalty if they drill. I\'ve received 12 offers to buy minerals since January 2017 - each higher than the last. I don\'t want to sell right before someone drills but I\'d like to understand more about what\'s going on to evaluate future lease and sell offers price and timing. How can I get a better sense of what\'s actually happening on/in the ground? Will the company that\'s currently leasing share their intentions to drill during my lease period? Lease bonuses are great but I\'d rather have pricey royalty checks!
A: There's really nothing "wrong" with selling right before a well is drilled. In some cases you'll actually get more BEFORE the well is completed than after, especially in cases where the new well is not the "barn burner" that was anticipated.

You can find the drilling permits for proposed wells on the Texas Railroad Commission's website (the regulatory body for oil and gas in Texas). Most will have a contact phone number you can call to find out if the well has been "spud" yet, or if they actually plan to drill it before the permit expires.

You could also possibly contact the landman who leased from you and ask him/her if they can tell you anything.

Reeves County is a very active county currently as you know. If you'd like to sell them I have a guy who would probably be interested in making you a good offer on them. He's worked with us before and is an actual honest buyer and will give you a fair shake and close quickly if he's interested and you accept an offer from him. You can contact me from our Sell Mineral Rights listing page or our Contact Us form if you are interested in getting an offer.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Fair counter to OGL offer in Canadian County, OK? Asked 04/30/2017
Q: section 8-11 in canadian county Ok...offered 750.00 for 3/16 royalty or 500.00 1/5 royalty...what is a fair counter offer\n
A: Hidden Mountain, LLC seems to be one of the few, if not the only, potential lessee in your township recently so you'll not be able to contact competing companies to see what they might offer it seems. Hidden Mountain has been leasing here for at least a few months it seems so they may be wrapping it up. I'd counter with $1000 and 3/16 or $600 and 1/5 and see what they say. Since they may be the only game in town right now they may not be too eager to negotiate much but I'd give it a shot anyway. If you have just an acre or two here I'd even suggest a 1/4 royalty and no bonus since they may work out better for you in the long run in the event a producing well is drilled.

If you don't want to lease to them right now you could simply wait for them to force-pool you, which they would do only once they'd actually decided to drill a well. The bonus amount you'd be entitled to in the event of forced-pooling would likely reflect the average price they paid everyone they leased for each respective royalty.

The Mineral Hub
Am I bound by first signed lease? Asked 04/22/2017
Q: In September 2016, a leasing company presented an offer (section 35, McLain county, OK, for $800 for 3/16 to lease our mineral rights. Now, April, 2017, we are getting offers from oil companies for much more like $3500 for 1/5 and $1000 for 1/4. Is there any way out of the first signed lease?\n
A: Assuming you already signed and sent the 2016 lease back then there's no way out of 2016 lease unless the lessee lets you out of it (very unlikely); and why would they? If you haven't signed the 2016 lease, but accepted their offer, then you should keep your word with them even in the face of higher offers.

Hope this helps you out.
The Mineral Hub
New to mineral rights- is my first offer fair? Asked 04/18/2017
Q: We received our first offer to lease our inherited 4 acres in Lea, New Mexico section 20. Company offered us $300 an acre for five years with 3/16 royalty. Does this seem fair for this area? Also do we really have any negotiating power with only 4 acres?
A: Not much negotiating power with only four acres, but still possible. You might want to read our leasing tips article on the "Mineral Hub Articles" page prior to agreeing to anything.

Hope this helps you out.
The Mineral Hub
Oklahoma intestate succession of mineral rights Asked 04/14/2017
Q: My father inherited several Oklahoma mineral leases from his mother. He died in 2014 with no will. He had remarried after divorcing my mother but had no children with the new wife. The new wife agreed to split the leases with my father\'s 3 children. She got 1/2 and us kids split the other 1/2 3 ways.\nThe new wife died in 2016 with no will. \nMy question is since the leases are \"ancestoral\" on my father\'s side, can us 3 children claim back her 1/2 of the leases? As blood heirs, can we claim the leases as ancestoral property? \nIs there an Oklahoma statue to support ancestoral property?
A: Since the new wife also died intestate, her minerals, assuming she owned them at her death, would be distributed to her heirs-at-law as per Oklahoma's intestacy laws, which you can easily search for online.

Hope this helps you out.
The Mineral Hub
Mineral Rights leased, who gets royalty? Asked 04/11/2017
Q: I have leased my mineral rights to Chisom Oil, \nNewfield and another company have requested Oklahoma pooling order. Assuming Newfield does drill, who gets the royalty? The company holding the lease or me, the owner of mineral rights?\n\nThank you,\nC Spear
A: You, assuming you have not previously sold your "royalty rights" to anyone else. It's possible to own minerals and royalty separately, but in most cases yes, the mineral owner also receives any royalty payments that occur as a result of production from the mineral rights.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Mineral Reservations and Partition Deed? Asked 04/07/2017
Q: I seen a document where one set of family conveyed all interest in multiple tracts of land.\n\nThen another document a couple years later do a Partition Deed that supersedes the first document states they are partitioning the surface estate to different family members.\n\nDo they have to mention mineral reservations, this happened in the 1995 & 1995
A: Without seeing the papers it's hard to answer this one. Show them to an attorney and see what he/she has to say about it. Sounds like they may have made a mistake on the first deed and the partition deed was meant to correct that but can't be sure without seeing.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Residential mineral rights Asked 04/06/2017
Q: We are trying to sell a house we inherited. Are there mineral rights involved. How do you know and does seller or should seller hold on to them.
A: Your real estate agent should be able to find out if you own any mineral rights or not. If you do, you can reserve them to yourself on the deed and sell just the house if you like, assuming the buyer as also agreeable and doesn't care about the mineral rights (or is not willing to provide value for them along with the house price).

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Company wants lease check returned Asked 03/31/2017
Q: We signed a lease for some mineral rights in Wetzel County WV. We received our check the other day and deposited it in the bank. Today we received a call saying that we needed to return the check because we didn\'t own the mineral rights due to a quick deed that was done back in 1903. Do we need to return this check and if so, should they give us the notarized lease back? We signed the lease back in December of 2016 but just received the check this past Monday. We made a trip to the Wetzel County courthouse, but they really couldn\'t tell us who owned the mineral rights because there were several people.
A: They should have verified your ownership BEFORE they paid you. Since they apparently didn't, they can ask you for the check back if you "warranted" your title on the lease, which you likely did (read the lease). "Warrant" means you swear you own it basically. You could argue with them and take them to court to fight giving the money back but you'd likely lose if you in fact warranted that you owned the minerals they paid you on, even if they made a mistake in paying you. It was sloppy of them to not verify your ownership prior to paying you though. Doesn't happen too often and I'm sorry it may have happened to you. If you have an attorney you might check with him/her as to whether to fight this or not. In any case, YES, they should give you the lease back, but if you really don't own anything there it's not the end of the world if they don't return it (but they should be willing to anyway...for one thing they could be wrong in which case you don't want a lease out there that you haven't been paid on).

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Entitled to royalty on additional new well? Bonus? Asked 03/30/2017
Q: We own mineral interest in Garvin County, Ok. We leased the interest in 1984 and have received royalty payment. Another company is drilling within the leased area. Are We titled to royalty pays and a bonus consideration? Could we participate in the well?
A: Royalties, yes. Bonus, no (since current lease is still in effect as long as there is continuous production from the leased premises). You can't participate as a working interest owner either since this is something you would have needed to decide prior to the first well being drilled.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
How to check a leasing company out? Asked 03/28/2017
Q: My wife was contacted by a landman regarding leasing her mineral rights. How/where can I check the company\'s bona fides?\n\n
A: I would "Google" their name online if you want to know more about them. You could also check with neighbors who may have also been leased. You should probably also read our leasing tips article, which can be found on the Mineral Hub Articles page of our website.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
When does lease extension end? Asked 03/26/2017
Q: We have been offered a dollar amount for an amendment to a lease and it also changes the company we are dealing with. I am assuming the dollar amount is what is called a bonus payment. The original lease, and this amendment, also pay us 1/5 royalty. My question is related to the following clause in the amendment, does it mean that if a well is producing, they would never have to pay us a bonus payment after the original one?\n\n“The Primary Term shall be extended by an additional period of two (2) years to November 1, 2019 and for so long thereafter oil, gas or other minerals covered hereby are producing in paying quantities from the leased premises, or from land pooled herewith, or the Lease is otherwise maintained in effect pursuant to the provisions hereof”
A: I'm sure the same clause was in your original lease as well, and it's very common. It means that once the primary term (or two year extension of in your case) ends, the lease will continue "until production ceases" IF they drill a producing well during the next two years. If they don't, then the lease (extension) would end in two years and you would be free to lease again (and collect another bonus). The leases I get say the same thing and it's very common language.

Hope this helps you out.

The Mineral Hub
What is Form P -17 Asked 03/23/2017
Q: Why a mineral rights owner should sign a form- p-17 Who pays the filing fees?
A: You can find your answer at the following link. You can copy and paste into your browser.

http://bfy.tw/Ap1i

The Mineral Hub
Transferring inherited Oklahoma mineral interest to heirs? Asked 03/17/2017
Q: My mother pre-deceased my grandmother, so at my grandmother\'s decease, my father inherited my mother\'s portion of her parents\' mineral rights in Oklahoma. A few years later, one of these in Seminole County was leased and developed. My father, who was a resident of Texas, made his will at about the same time and included in his will a division of the mineral rights between my brother and me. When he began to need more help, my father moved to North Dakota to live near me. He made no other will than that made in Texas. I am named executor of my father\'s will which directs that I \"share and share alike\" with my brother (who is currently incarcerated, and for whom I hold power of attorney).\nIn December of 2016, my father passed away. Because his estate, minus the mineral rights (which are of unknown value as only one parcel is in production and that is of less than $500 a year income), is of less than $4000 value, a local lawyer says that I am not required to probate at all here in ND. The lawyer is unsure of how things must be handled in OK, and advised me to find a lawyer there to probate the will in OK. He warned me that probate will likely be of an expense that far exceeds the current proceeds from the lease. However, several of my mother\'s brothers who live in OK believe that there is another way to deal with the inheritance of the mineral rights that does not require probate. Some internet research turned up many references to and even a few forms for the \"affidavit\" method of transferring inherited mineral rights. As I have no desire to ever sell the mineral rights, would an affidavit indeed be a way to deal with this inheritance? If so, are the fill-in-the-blank forms available on the internet adequate examples of an affidavit?\nThank you in advance for your help.
A: In order for an heir to have "marketable title" to mineral rights in Oklahoma, the estate of the decedent must be probated (will or no will), OR the heirs must file an affidavit of death and heirship as you stated, though it would not officially transfer the title to the heirs until ten uncontested years had passed. After that time, the affidavit would suffice to transfer title assuming it has not been contested. This is per Oklahoma Statute 16 O.S. § 67, subsection C of which is below for your reference:

C. In order to establish marketable title pursuant to this section:
1. The affidavit or recital must state that the decedent died without a will, or if the decedent had a will, that the will was never probated in Oklahoma and a copy of the will is attached to the affidavit or recital, or if the will was probated that the severed mineral interest was omitted from the final decree of the decedent and a copy of the will and final decree is attached to the affidavit or recital;
2. The affidavit or recital must list the names of the decedent’s heirs and their relationship to the decedent;
3. The affidavit or recital must state that the maker is related to the decedent or otherwise has personal knowledge of the facts stated therein;
4. The affidavit or the title transaction that contains the recital must have been recorded for at least ten (10) years in the office of the county clerk in the county in which the real property is located; and
5. During the ten-year period following the recording of the affidavit or the title transaction that contains the recital, no instrument inconsistent with the heirship alleged in the affidavit or recital was filed in the office of the county clerk in the county in which the real property is located.

The entire Statute can be found here: http://www.oklegislature.gov/osstatuestitle.html

You might also keep in mind the following that was pointed out by the Oklahoma Bar Title Examination Standards Committee in 2013:

"Although not specifically required by 16 O.S. §
67, it is recommended that the affidavit contain
sufficient factual information to make a proper
determination of heirship. Such information includes
the date of death of the decedent, a copy of
the death certificate, marital history of the decedent,
names and dates of death of all spouses, a listing of
all children of the decedent including any adopted
children, identity of the other parent of all children
of the decedent, the date of death of any deceased
children and the identity of the deceased child’s
spouse and issue, if any. During the ten year period
of 16 O.S. §67, if an affidavit fails to include factual
information necessary to make a proper determination
of heirship, the examiner should call for a new
affidavit that contains the additional facts necessary
for a proper determination of heirship. If a new or
corrected affidavit is filed, the statutory ten year period
would run from the date of recordation of the
new or corrected affidavit."

The full text of the Committee report can be found here:

http://www.okbar.org/Portals/15/PDF/2013/Title_Examination_Standards.pdf

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Will lease expire on a shut-in well? Asked 03/16/2017
Q: If formerly productive gas wells are shut down and now non-productive, does the lease expire after a certain amount of time or do you always have to go to court to get the lease released?\n\nI should say that I am the owner of the mineral rights that were leased to an oil and gas company with producing wells. The oil and gas company sold the wells and the lease to the land owner and the wells have been non-producing for 3 months.
A: Three months is nothing. Three years and you might have a good argument, but yes, you'd likely still have to go to court (or threaten to) in order to get them to "produce or release" the lease. The sale to a new owner would not have any bearing most likely. It's the time that's important, and any operator can shut in a well if it's "reasonable" to do so. If you took them to court they'd have to show WHY it's reasonable to keep the well shut in, and you would want to show why it's NOT reasonable. The judge would decide.

That said, I have personally convinced a company to release my lease for not producing in "paying quantities" simply by threatening to take them to court (and having my attorney send them a letter stating as much). My argument was that they were not recovering enough from the barely-producing well to justify continued operations. It was not actually a "shut-in" well, just a well that was barely producing anything each month.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Lease bargaining with only 1 and 1/3 acres? Asked 03/15/2017
Q: Just learned I own 1.33 mineral acres in Hughes County OK. Reading the FAQ\'s I understand I shouldn\'t accept the first offer. They are offering $700 per acre, which I understand is actually a bonus payment, and 3/16 royalty with a 3 year term and 2 year extension. Do I have any bargaining clout with just 1.33 acres? What does a \'me-too\' clause language look like e.g. If my neighbors (other family) get better terms then I --then I would get the equivalent terms also?
A: If it were me I would ask for 1/4 royalty and no bonus. If a good producing well is eventually drilled you'll likely come out better with a higher royalty on your 1.33 acres in the long term. You really don't have much bargaining clout with that small a parcel, but it's worth trying anyway. Many companies will agree to a 1/4 royalty in Oklahoma as long as you don't also ask for a bonus, though some might offer 1/4 royalty and a smaller bonus. You might start with 1/4 royalty and $350/acre and see what they say, then move down to 1/4 royalty and no bonus if they balk.

I would also NOT agree to the two-year extension if it were me. You don't want to effectively lock in today's price for five years. If they really "need" the extension I would perhaps agree to it IF they agreed to double the initial bonus upon exercise (i.e. another $1400/acre in three years if they decide to extend the lease another two years after that).

You also want to make sure you are not dealing with simply a "lease flipper" who is planning to buy your lease and then "flip" it to someone else for a profit. If you are in doubt I would simply ask the landman who he/she is working for, and whether his client plans to actually drill a well or at least participate in any well that is drilled. If the answer is no, then you're likely dealing with a flipper.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Sold TX Mineral Rights - State Tax? Asked 03/13/2017
Q: We (a family Trust) sold mineral rights we held in Martin Co. Texas in 2016. We\'re properly reporting the income on the Fed Tax return, but unsure about State. I\'m the Trustee and live in Hawaii. Every year royalties were produced I completed both a Fed and HI State tax return for the Trust. But Turbo Tax indicated this year that a Texas return is necessary. Is it correct that there\'s no income tax in TX, and therefore I don\'t need to fill out a TX State tax return for the sale?
A: If you sold the minerals last year, and there was no production or income from them last year, then you wouldn't owe any state tax on the sale proceeds, nor would you need to file a Texas tax return simply for the mineral rights that were sold. You might contact a Texas accountant for a professional opinion on this however.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Reservation of Mineral Rights: Joint Tenants or TIC? Asked 03/10/2017
Q: Must a conveyance with a mineral reservation specify that the mineral estate is to be in joint tenancy if the previously undivided estate in fee simple was in joint tenancy?\n\nExample: A & B own Colorado property as joint tenants, and execute a warranty deed conveying the property. In the deed, they reserve unto themselves as grantors the mineral estate. If the language says \"unto the grantors\", do A & B own the resulting mineral estate in joint tenancy, as they did the previously undivided property? Or are they tenants in common on the newly-created mineral estate, since they didn\'t reserve it with language such as \"unto the grantors as joint tenants with rights of survivorship\"?
A: If A&B wish to preserve the joint tenancy as to the reserved mineral rights, I would suggest they include the language "unto the grantors as joint tenants with rights of survivorship" as you stated. It may not be necessary but just to make it clear I would include the language. I am not an attorney however, and would suggest you run this scenario by one if you would like an official legal opinion on this matter.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Realistic price for TX mineral rights? Asked 03/09/2017
Q: 3/9/17 - We bought mineral rights in Spraberry/Permian Basin, Howard/Martin Counties, TX from our son in Nov 2015 for $50K. After a year of royalty checks of only a few hundred each month, we concluded that we paid far too much (although we were happy to help our son). During that time we received many offers well below what we paid. In Dec. 2016 we entered into a Production Sharing Agreement with an adjacent well and amazingly the checks have been $11K, $6K, and $5K. We\'ve received at least 20 offers and recently we got an offer of $58K and are now considering selling. We read your article, \"What are my mineral rights worth?\" We did all the math using your guide and determined the value of our mineral rights: Avg $3,858 x 36 = $138K; Avg $3,858 x 52 = $200K; Avg $3,858 x 72 = $277K. Is it realistic to respond to these offers by asking the mid-range value of $200K? We were going to ask for $75K but after reading your article, maybe we should ask for more? Your guidance is greatly appreciated!
A: If the average income over the past six months or so has been $3858 then yes, asking for a 36 to 60-month multiple would not be unreasonable in my opinion. If there are more wells planned/permitted currently, then an even higher multiple might be justified.

If you are planning to sell them you can list them on the Mineral Hub for free and we will market them for you and if we find you a suitable buyer we will help ensure the transaction goes as smoothly as possible and that the price is (in our opinion) fair. You can visit our "Sell Mineral Rights" page and post your listing there if you like, or can simply call us if you prefer and we'd be happy to speak with you about the sale.

The Mineral Hub
Lease "option" with no royalty clause? Asked 03/09/2017
Q: We just received a lease option on our acreage in North Dakota. The deal is for $900/acre with \'100% consideration\' to the lessee. The agreement does not include a royalty clause. Should we be concerned?
A: A lease "option"? If you mean lease "offer" then if it were me I'd want a royalty clause included rather than just an up-front bonus. If neither are present then it probably was not a lease offer at all. I'd have an oil and gas attorney look at that since I have not actually seen the offer you refer to.

The Mineral Hub
Oil and Gas reporting taxes Asked 03/09/2017
Q: I inherited oil royalties that accumulated over a period of \n10 years. The owner of these royalties died several year ago\nand for 10 years the royalty payments accumulated. After \ndiscovering that I inherited the royalties, I received one \ncheck for 10 years of royalties. Can I spread out this 10 \nyear lump sum payment by reporting 1/3 of the income to \nthe IRS, on amended returns, over my last three tax returns. \n\n
A: I am not an accountant unfortunately.I would suggest you ask an accountant that question to be sure, but I expect it would be taxed in the year received, not the year earned.

The Mineral Hub
Tax on mineral rights sale? Asked 03/06/2017
Q: I have sold mineral rights for around 97,000 what amount of tax am i looking at
A: If you owned the mineral rights for more than a year prior to selling, any "profit" you made on the sale would likely be taxed at the long-term capital gains rate, which I believe is around 20%. That's federal. Not sure about state. Check with your accountant. If owned for less than a year then would be taxed at a higher rate unless you did a 10-31 exchange (purchased other similar property with the proceeds). Again, check with an accountant or financial adviser for a more in-depth answer.

The Mineral Hub
1991 mineral rights value? Asked 02/17/2017
Q: tax client sold mineral rights in Dewey County, OK and she needs to know what the value was in 1991? Can you help?
A: If the amount of money involved justifies the cost I would recommend Terrel Shields, Certified General Appraiser, or a local landman who is familiar with or could research 1991 valuations in Dewey County, OK.

Mr. Shields is reputable, and can be contacted from his website: www.roxnoil.com, and it's possible someone at the Dewey County Clerk's office could recommend a local landman to help you.

One other alternative, though probably more expensive than either of the above, would be to contact an oil and gas attorney in Dewey County who is familiar with that area.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Interest debited then credited back on check stub? Asked 02/12/2017
Q: My Oil Royalty Statement shows royalty interest debited\nand then immediately credited for 2 months, giving me a\npayment for total oil of (0.03). Why are there debits and \ncredits for the exact same amount and no payment to me?
A: There are likely minor differences between the two entries. Most of the time these "duplicate" entries are adjustments made by the operator for volume, price, taxes, deductions, or some other issue that needed "adjusting". They show both entries (the original and the corrected one) so that you will know they have made some sort of adjustment.

If you have specific questions regarding the entries (i.e. why no payment to you) then you might want to contact the owner relations department of the company that sent you the check. The phone number is likely on the check stub somewhere, or in other papers they have sent you.

Hope this helps you out!
The Mineral Hub
Deductions concerning royalty ownership & taxes? Asked 02/10/2017
Q: I currently own 60 acres with a gas well on it. What if any deductions are available when I file federal & Michigan state taxes? The gas well covers about 6 acres. Are production costs & taxes deductible? Thanks
A: Your accountant will likely tell you that you will be allowed a tax concession against your royalty income known as a "depletion allowance" on at least your federal tax return. For oil and gas royalty owners a "percentage depletion allowance" is most common, and is calculated using a rate of (I believe) 15% of the gross income received over a given tax year. Check with an accountant for the exact details as there may be other factors involved in calculating this deduction that I am missing.

The depletion allowance is available due to the fact that mineral rights are considered a depleting asset by the IRS (wells start out strong, then deplete as they age).

If you participated in actually drilling the well by paying your proportionate share of the drilling costs, then many of those costs would be deductible, but for most people this would not be applicable since most simply own the mineral rights and collect royalty payments rather than sharing in the costs of drilling and thus use the "percentage depletion allowance" deduction instead of a "cost percentage".

Hope this helps you out.
The Mineral Hub
Proposed mineral lease, Washita County, Okla. Asked 02/06/2017
Q: I own mineral rights to 60 acres in SE/4, SEC.7-10N-20W in Washita Co., Oklahoma. I recently received an offer to lease my mineral rights for $500 per acre and 3/16th royalty for five years. I know not to accept a five year lease. I will ask for three years. Does this sound like a ball park offer in my area? Have you heard of any proposed leasing or drilling activity there? The offer was from Plainview Oil Company, LLC and signed by a Jeffrey B. Perry. Have you heard of this company or this person? I do not believe he is a landman. \n\nWe will use Depth, Horizontal, Shut-in, and Deduction Clauses. Are there any other clauses you recommend at this time?\n\nThanks for helping,\n\nCarol\n\n
A: Atalaya Resources (or a land company working for them) is the only company leasing this immediate area currently so they may not be open to much negotiation since there's little if any competition for leases there right now.

That said, it's possible the guy who contacted you is hoping to buy your lease in order to resell it to Atalaya for a profit so you might want to contact Atalaya directly if he was not actually hired by them to buy leases. Atalaya is headquartered in Tulsa, OK and I'm sure you can "Google" their contact information. Once you connect, explain that you are a mineral owner who would like to lease your minerals in Washita County, and have the legal description handy.

You might want to first ask the guy from Plainview who he is leasing for,and if not actually working for (being paid by) Atalaya to buy leases for them I'd ask whether he intends to resell your lease to them, or anyone else, down the line. That would tell you a lot.

Even if he is working for Atalaya, I would counter with something, especially if that was his initial offer. Try $750, 3 years, 3/16 and see what he says. If he really wants five years I'd ask for $1000/acre since prices could rise substantially over the next five years.

If he's not actually working for Atalaya then I'd check with them to see what they are offering before even dealing much with this guy. I've had good experiences with Atalaya in the recent past with my own mineral rights.

That 10N-20W township has some of the best deep gas wells ever drilled in Oklahoma (they are quite old now however) and so I think it's worth more than $500/acre to lease in any case, even if just for three years. I'd be interested to find out what you end up getting! Hope it works out in your favor.

Regards,
Frederick M. "Mick" Scott
The Mineral Hub
Historical Record of Mineral Rights Value? Asked 02/06/2017
Q: Inherited oil/gas rights in Williston County, ND, is 1992. For tax purposes, need to find value when inherited. Any historic references, or must I dig out myself by going to the Williston county courthouse to explore records? Thanks
A: You could search for 1990-1995 sales in the county clerk's records but unless the Clerk require "tax stamps" on the deeds (which you could use to arrive at an estimated sales price) it's unlikely your search would be useful because in most cases the actual prices paid are not stated on mineral deeds.

You could use a 2X multiple of the going lease bonus rates per acre in 1992 for that immediate area to arrive at a rough 1992 per acre valuation if sales data are not available; and 3X if the area was considered "hot" back then. If the cost is justified you could also hire a local attorney or (probably cheaper) landman to research this for you or give you his/her thoughts if they were working in the area back then.

My feeling is they'd be worth quite a bit less in 1992 than they are now, so you may have a "capital gain" of some kind. Your attorney or accountant may tell you however, that a valuation is not even needed because they were inherited rather than purchased outright.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Do mineral rights expire? Asked 02/03/2017
Q: In which states do mineral rights expire after time has passed
A: You'd want to check the "dormant mineral" laws for the states you are curious about. I'd suggest Googling "Which states have dormant mineral acts?" You will get plenty of results that way. I'm sure you'll find a lot of information by doing that, probably more than I have time to provide here on this free forum.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
How to find out what we own? Asked 02/02/2017
Q: We had a title search done to determine if we own the mineral and or gas rights to our property in Tioga County, Pennsylvania. From what that reads we do not own them, however it is rumored that the coal company that owned them is no longer in existence. All of the neighbors in our area \"have\" their rights and have signed leases with the gas companies over the last numerous years. Our question is who do we talk to about finding out what we actually do or do not own?
A: County Clerk's office in Tioga County would be your best bet. That's where all the land (and mineral) deeds are filed of record. You could go there (or online if they are online) and search your mineral rights history to determine who the coal company sold them to prior to their dissolution.

Even if the coal company owned them at one time and is now no longer in existence that wouldn't mean they would revert to you automatically. They were probably sold at some point before the company's dissolution and that party would own them now.

Finally, if you have not been approached about a lease while many other owners have been, you probably don't own them.

Hope this helps you out.
The Mineral Hub
Fast way to determine mineral ownership on 3 acres. Asked 01/31/2017
Q: What is the easiest and fastest way to see if I have minerals on my 3.0 acre purchase? Reeves County, Texas and there are no reservations or conveyances on my Deed.
A: If previous owner owned the mineral rights under the three acres, and didn't reserve them in the deed to you, then you now own them. To determine whether they were owned by the seller you'd need to either ask them or go research the land records in the local county clerk's or abstract office to determine if they came with the land when your seller bought the land.

Could be that the land didn't come with minerals when your seller bought the land, or the minerals could have been sold after your seller purchased the land, in which case they wouldn't need to be reserved on the deed into you.

The Mineral Hub
Can I keep minerals acquired by deed mistake? Asked 01/31/2017
Q: We purchased a house on 2.5 acres. I requested to have gas/mineral rights included, the seller decline. The closing company made a mistake and filed a deed that gave me the gas/mineral rights. Do I have any rights, or do I have to agree to the corrective deed? \nCan the closing company be held liable in any way since they were paid professional and made a mistake?
A: You could fight it out in court if you wanted to but there's no guarantee you'd "win" and get to keep the mineral rights due to the professional closing company's mistake. The seller's would likely argue that since you were well aware they intended to keep the mineral rights before closing, the mistake should be corrected with another deed so that the intent of the parties is reflected properly.

The Mineral Hub
Who has my lease? Asked 01/31/2017
Q: How can I find out who has the leasextra on my mineral rights in Wetzel county WV?
A: All leases are filed of record in the county clerk's or recorder's office. Should be able to find a copy there and on it will be the name of the company who has your lease.

The Mineral Hub
Can I change remainder beneficiary in deed? Asked 01/28/2017
Q: My uncle built a mineral deed stating that his minerals was to go to his \nsister and her husbands trust after he (uncle) and his wife\'s (aunt) death. Uncle and his wife would have a life estate of the minerals during their lifetime- his sister and her husband have already passed-Uncle wants to change the mineral deed to go to his nephew as he is surface owner of the land. \nIs this a move that Uncle can revoke the mineral deed and send to the Nephew and he will be owner after Uncle and his Wife pass?
A: If uncle is still living then he can file a new deed stating his nephew is to get the minerals after uncle and uncle's wife are deceased. This would replace the initial deed. He could also simply record a "cancellation" of the first deed, or could just sell the mineral rights to the nephew, or anyone else, while still living. This would also have the effect of nullifying the first deed since there would be nothing to transfer if sold prior to their deaths.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Forgot to reserve minerals on deed... Asked 01/27/2017
Q: we own a lot of property with mineral rights. we have broken up parcels and sold 5 acre tracts a lot but we ALWAYS state in the deed that we are selling surface only. well, we forgot to state that on one. can we get the minerals back? would a judge go by our past history and know that we had just made a mistake when the deed was prepared?? how do we fix this? thank you.
A: If the grantee was aware at the time of the sale that you didn't intend to include the mineral rights you could perhaps execute a "correction" deed or "deed in lieu of previous deed" etc. and have the grantee sign off on it.

This assume the first ("mistake") deed has already been filed of record. If it hasn't then just ask the grantee for the original back and replace it with a new one stating "surface only" as you usually do, and then the grantee can file it of record.

A judge isn't going to fix your mistakes unfortunately, but a new deed could if the grantee you sold to is agreeable.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Inheriting mineral rights as a foreigner Asked 01/24/2017
Q: Hello,\nI\'m a German citizen and will be receiving mineral rights in an inheritance from family in the USA. Is it possible for a foreigner to inherit mineral rights? How would it work with taxes? Thanks for your help!
A: I believe you can inherit mineral rights here without being a citizen. There is plenty of foreign ownership of our mineral rights already and I expect it's much like if you purchased a house here since mineral rights are considered "property" here.

As for the taxes that would be something to check with your accountant on. Our federal government only taxes actual INCOME made from the mineral rights (i.e. royalty payments, lease bonus, sales proceeds if you sell them later etc.), not just ownership. Some STATES here however will tax the property whether it is producing oil and gas income currently or not. Some STATES here such as Texas do not charge INCOME tax, but do have a property tax and I believe mineral rights are considered property for tax purposes in Texas, whether currently producing income or not. For the specifics, and whether these taxes would apply to you or not, you'd probably want to contact an accountant in the state where the mineral rights are located or perhaps one where you live in Germany.

If you happen to decide to sell them at some point please keep us in mind for that as that's what we do here mainly (help sellers find suitable buyers for their mineral rights). Mineral ownership is a rather exclusive club worldwide however, so you might want to hold onto them for a while to see how ownership suits you, and of course you'd want to learn about what is going on in the area where they are located as that could definitely affect their value. Lots of oil and gas activity in your area means more value.

Since you are apparently in Germany we may be able to give you an idea of what's going on in the area where these mineral rights are located. Feel free to contact me directly at mineralhub@outlook.com if you have any more questions.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
How to figure net acres from division order? Asked 01/20/2017
Q: I inherited mineral rights from my mother and stepfather upon\ntheir passing. I have the legal descriptions and the probate order\nthat was filed declaring myself and my siblings the beneficiaries \nof the mineral rights. I also received transfer division order forms\nfrom Chesapeake. There are ten active wells in Woods County. \nThose orders show the gross acres, but not the net acres. Is \nthere a way to find out the net acres without going to the \ncourthouse in each county? I would think there is a database\nsomewhere with that information for each mineral owner. I\'d\nappreciate any information you can help me with. \n\nVickie Y
A: The division orders (and check stubs you will receive) will all contain your "decimal interest", which can be used to determine your net mineral acres under a well.

Your decimal interest may look something like .00024785, and may be called "payment decimal", "owner decimal" or similar on the check stubs and perhaps something else on the actual division order but it will be there somewhere. On the division order it could also be in "%" format, in which case you'd need to move the decimal point two places to the left before using it in the formula below (i.e. .123456% would change to .00123456.

Take the decimal interest and multiply it by the "unit size" of the well and then divide that by the decimal equivalent of the royalty fraction. The result will be the net acres they are paying you on for that particular well. I know it sounds confusing but the example below should help clarify:

Assume a decimal interest of .00123456, a drilling and spacing unit size of 640 acres (common for deep gas wells) and a lease royalty of 3/16 (.1875 in decimal form).

.00123456 times 640 divided by .1875 = 4.2139648, meaning they are paying you on 4.2139648 net acres within their 640 acre drilling and spacing unit, and that's what they think you own. If your decimal was larger it would indicate you owned more acreage within the unit, if smaller, less acreage.

Easy enough to locate the decimal interest but perhaps not the rest. The drilling and spacing unit size would be listed on the most recent spacing order for the formation the well is producing from. These documents are always filed with the state's oil and gas regulatory body and can often be found online. The Oklahoma Corporation Commission would be for Oklahoma (www.occeweb.com) and the Texas Railroad Commission would be the Texas equivalent.

As for lease royalty, that would be the royalty you, or whichever of your predecessors in interest agreed to when the current oil and gas lease was signed. All oil and gas leases are filed of record in the county clerk's office and may even be posted online if they provide that service. 1/8 and 3/16 are the most common royalties, and either 160 or 640 acres are the most common drilling and spacing unit sizes but to get an accurate representation of the net acres you'd need to input the correct royalty and spacing unit sizes into your formula.

All that said, it's also possible to just contact the operator's "owner relations" department and ASK them to TELL you how many acres they are paying you on, how BIG their drilling and spacing unit is, and what the lease royalty stated on the current lease for the well or wells is. I would suggest emailing if possible as they will sometimes be able to respond more easily that way.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Should I consider a top lease? Asked 01/20/2017
Q: I have been offered a top lease by a third party with a 10% advancement. My original lease expires in 18 months. Is this a good percentage?
A: I'm not a fan of "top leasing". When approached with these offers I usually tell them I'd prefer they just contact me again when my current lease expires and then we can talk. Reason is because it's likely they think lease prices will rise over the next 18 months or they wouldn't be offering to pay you 10% of the bonus now for you agreeing to lease to them at that rate 18 months later.

That said, you could also look at it as a "bird-in-the-hand" if in fact what they are offering OBLIGATES them (not gives them simply an option) to pay you the remaining bonus assuming your lease doesn't get drilled by then by your current lessee. If lease prices go DOWN over the next 18 months this could benefit you, especially if no one else is leasing that area in 18 months.

Depending on how many acres you have to lease their may also be tax consequences to consider. Check with your accountant before doing anything if the money involved is substantial.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Buying Acreage with producing well with 75% OGM Asked 01/19/2017
Q: Hi\n\nI would like to take some suggestions (pros and cons) regarding the purchase of acreage with producing well in PA. Looks like the well is up and running from 2009. Also there is a water impoundment on the property. What are the things that one should know before buying this type of property.\n\nPlease shed some light on this scenario and advise.\n\nThanks much\n-deep
A: Based on current production, and decline rate in same over the past six months, does it look like you'll make your money (for the value of the mineral rights alone) back and begin seeing a profit in 3-5 years? As water amounts creep up production usually goes down. Does operator plan to rework the well to improve recovery of oil and gas?

Also, with just ONE well, you are taking on more risk than if there were several on the property. If that one well goes kaput, then so does your mineral investment unless you can lease the mineral rights again later (assuming that's what you're buying) or if another producing well is commenced before the current lease expires.

If I couldn't make my money (mineral rights portion of the purchase) back in 3-5 years I wouldn't buy unless perhaps I had good reason to believe drilling activity in the immediate area (and thus hopefully on my property) would increase significantly during that time.

I am certainly no investment adviser but that's how I'd look at it as a mineral owner myself.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Mineral Valuation Canadian County, OK? Asked 01/13/2017
Q: What is the going value of the offers in Canadian county. The \nlocation of said well is 1 mile north of Calumet.
A: If you're looking to sell we'd be happy to help find you a suitable buyer if you list them for sale with us. Unfortunately however, we do not have the resources to do free mineral evaluations for everyone who asks. If you would like an evaluation without listing them for sale with us we'd need to charge you for that. Contact us for rates and availability.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Participate in well or just lease? Asked 01/12/2017
Q: I received an offer to lease mineral rights. One of the proposals is to participate & prepay well cost. An estimate for the dry hole & completed well cost was sent along with the proposal. What are the pros/cons for this proposal?
A: The fact that you even needed to ask me that questions tells me you should probably NOT participate in the well. There is a lot that could go wrong as well as a lot that could go right and because of that it's very risky and you could potentially lay out a lot more money than you are planning to if the well costs exceed the estimates given in the AFE you received. Your "proportionate share" of the costs to drill the well would be figured based on how many acres you own in their proposed drilling and spacing unit. More acres means more money. Even participating with just one acre in 640 acre drilling and spacing unit could cost you over $10,000 (1/640 X 7,000,000) if the well cost $7,000,000 to drill and complete.

Pros: If everything works out just right and there are no problems with drilling, completing, or producing the well for several years, you MIGHT get back the money you invested and begin making a profit that could be substantial if the well(s) continues to produce for many years with no major setbacks. You are accepting a lot of risk by participating in the drilling of a well so it's reasonable that you should receive a larger share of the profits if the endeavor is successful. Mineral owners who simply lease their right to drill to the oil company rather than actually participating in the drilling receive much less compensation (i.e. the 1/8 or 3/16 royalty) because they are not taking any financial risk up front.

Cons: If there are cost overruns in the drilling and completion of the well (fairly likely) or the well fails to produce as expected once completed (a definite possibility) then you'd probably never make your money back Additionally, even if it is a good well, you'd need to again pay your share of any additional wells that area drilled and assume THOSE risks as well. If the first well is a "barn burner" then it's likely the majority of the working interest owners (of which you'd be one if you shared in the costs) would vote to drill another well, at which point everyone participating would need to "auntie up" for that well too. Could get expensive in the long run unless the wells are all real good.

You'd also be billed each month for equipment maintenance and other costs of maintaining production in any well or wells that are drilled. This would be a bill basically, and if your bills were more than the profit each month you'd actually be losing money each month but still be expected to pay those bills.

If it were me I wouldn't even consider participating in a well unless I could easily afford to lose at least TWICE my initial investment. That way, if I lost all my money it wouldn't hurt my standard of living and I would've learned from the experience. Barring that I'd much rather just lease my mineral rights and let the other guys take all the risk.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Sharing of oil/gas royalties - tax question Asked 01/11/2017
Q: My brother and I received some producing mineral interests that were owned by my mother in a revocable trust. We are transferring the mineral interests into our own names to get them out of the Trust. We have a gentleman\'s agreement with my stepdad (because mom wanted him taken care of but he is not a beneficiary of the trust) that he will receive the first cumulative $5K of oil and gas royalties each year. Let\'s say that my brother and I each receive $7500 of 1099s in 2017 from oil and gas royalties. Can we both cut him a check in 2017 for $2500 and then 1099 this $2500 (each) portion of our \"revenue sharing agreement\" on a 1099 from us to him so that he pays the taxes on the oil and gas revenues that he gets, even though he does not actually have any ownership interest? (And we deduct the $2500 we paid to him as an expense on schedule E, so we only pay tax on the royalty income we actually received)? Does this work? Is there a better way to handle this? We need a legit way for him to get the $5K and be responsible for the income taxes on the royalties that we are passing thru to him. Thanks in advance.
A: Not sure about this, but I expect it would be treated more as a "gift" for tax purposes, barring any documentation stating he is to share in the income each year. I would suggest contacting a accountant about this.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
How can I find out name on oil lease? Asked 01/07/2017
Q: How can I find out who name the mineral rights/oil lease is in on property I own. My mother used to receive a check. She donated the property to her 4 children. She continued to receive the checks for some time. She has passed away some years ago. The checks stopped coming.
A: If the wells are still producing, the company probably started putting the money they were sending your mom into what's called a "suspense account" once it was determined she was deceased. They will likely continue doing that for several years unless someone shows they have a claim to the minerals, and if no one comes forward within a few years they will likely turn the money over to the State to hold until it is claimed by an heir.

If the wells have stopped producing that could also be why you are no longer receiving checks. You might contact the operator of the well (probably listed on the checks) and see what's up. If they have no record of your mom "donating" these minerals to her kids, you may need to show them evidence of the transfer (probated will, deed, etc.).

To find out who the record holder of the mineral rights currently is you could visit that county clerk's office either online or in person and search the records. If your mother is the last one in title there (i.e. her estate was never probated etc.) then you'd want to see an attorney about getting them placed into her heirs names if there is no conveyance filed of record showing she "donated" them to her 4 children.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
1099 required on income received from oil company? Asked 01/05/2017
Q: Our oil company is telling me that I don\'t need a 1099 from his company for checks given to me for royalties, is that correct? Also how can I find out if the lease has expired and when it did?
A: Even if they don't send you a 1099 you will still be liable for any taxes on the income you received. Check with your accountant. It's possible that if the amount is very small no 1099 would be required but I'm not an accountant so you should check with yours to be sure.

Hope this helps you out!
Frederick M. Scott
The Mineral Hub
"Settlement" offered for mineral rights fair? Asked 01/04/2017
Q: my mother just inherited mineral rights in West Verginia and she lives in Kansas, The Co named Natural Energy ownes the land, they have offered a settlement to her and 6 of her cousins , how do we find out how much it is actually worth and would it be better to keep it, the settlement was very low.
A: Not sure what you mean by "settlement" but I assume it's from a class action. You'd want to talk to the plaintiff attorneys in that case. Of course you can also hire your own attorney to help evaluate the settlement offer for you if you're not sure how to proceed. That would be my advice.

Hope this helps you out!
Frederick M. Scott
The Mineral Hub
Locating inherited land? Asked 01/01/2017
Q: Trying to find the land I inherited from my mother Brooksie b kelly of Monroe , la
A: Check the county clerk/recorder records in the county/parish where the land is located. You should be able to find where your mother got them there, and then transfer them to yourself (if needed). If you don't know the legal description you can just search by name to find her as long as you at least know the county where the property is.

Hope this helps you out!
Frederick M. Scott
The Mineral Hub
McClain County Oklahoma lease rates and pooling? Asked 12/22/2016
Q: What should the leasing bonuses be and will there be a lease bonus paid if I am force pooled?
A: If you are force-pooled you will be paid the "default" bonus/royalty offered in the pooling unless you choose one of the other pooling options offered before the election deadline (usually 15 days after the pooling order is issued). You would also be free to lease to another company during the election period if you could find someone interested.

The leasing bonus in both the leases and the eventual pooling will be based on the market value for leases in the immediate area.
Michigan gas and oil lease Asked 12/21/2016
Q: If I do not sign a lease, but seismic testing is done on adjacent property and a well is drilled. How is it determined if oil pool or field is also under my land and not being drained and will I still entitled to royalties if I refuse the lease.
A: You will still be entitled to royalty even if you do not lease, as long as the well's drilling and spacing unit (i.e. 640 acres etc. as determined by the State's oil and gas regulatory body) also covers the area where your minerals are located.

The State determines how much acreage one well can "drain" and you can likely look this info up online on the website for Michigan's oil and gas regulatory body, as well as how much acreage any well on land adjacent to yours includes.

Hope this helps you out!
Frederick M. Scott
The Mineral Hub
Beckham County, OK 11N-21W lease bonus? Asked 12/21/2016
Q: Am curios as to going rate for lease bonus in Beckham County, OK, specifically in Section 27-11-21 or that area.
A: Hi Bob! As you know, I live in Beckham County. I would estimate the lease bonus to be $1500 to $2500/acre currently in Township 11N-21W. Atalaya and Templar Energy, as well as Le Norman Operating, have been buying leases in Section 27 since early 2015 and so I would expect they are about all leased up by now. I'd ask what the top dollar they paid anyone else is and see if they'd match that. You could also wait to be "force-pooled" in the section as that would likely give you at least the average bonus that was paid to most mineral owners in the section (though leasing would give you more options/control).

Hope this helps you out.
Frederick M. Scott
The Mineral Hub
Can 50% owner of mineral rights prevent drilling? Asked 12/19/2016
Q: We are in the process of negotiating a land sale. the buyer wants 50% of the mineral rights. I assume that it want them so that he could stop any possible drilling on his land. Could he deny a lease or stop any drilling with 50% ownership?
A: No, that would be unfair to the remaining mineral owners under the land. He could not deny or stop drilling if the other mineral owners (or even one of them) wanted to drill and thus signed a lease or paid for a well to be drilled themselves.
Heirship in West Virginia Asked 12/16/2016
Q: My siblings and I are the heirs of our mothers oil and gas mineral rights after her death. Our mother remarried and our question is can the mineral rights be passed on to her husband and his children through a will which would exclude us?
A: If your mother has a valid will at the time of her death, then whatever it says pretty much goes. If the mineral rights are currently in her name then she can will them to whomever she wishes after her death. Without a will the minerals would pass by the laws of "intestate succession". You can look up West Virginia's version of these laws online but normally it means the spouse gets one-third to one-half and the rest is split between her blood children so without a will her new husband may get half or maybe just a third, but I doubt his kids would get any.

Hope this helps you out!
Frederick M. Scott
The Mineral Hub
Leased in Custer County OK, have received offers to buy. Asked 12/16/2016
Q: We have 20 acres in Custer County OK (S03-14N-15W) that we signed a lease on in July. Unfortunately we jumped on the offer and then received 3 more much better offers to lease in the following months.\n\nAfter signing the lease, we also have gotten 4 unsolicited offers to buy part or all of our mineral interests.\n\nI do believe Continental is drilling in that area (not sure if it is the exact Section-Township-Range).\n\nMy question is that if Continental does pull minerals out does in have to be on the exact Section Township and Range (S03-14N-15W) for us to receive royalty payments?\n\nMy worry is that they might not develop any minerals and if we don\'t sell (only thinking about selling half - 10 acres) that we will miss out on getting that dollar amount.\n\nAny advice will be much appreciated.
A: Your section was recently "force-pooled" for $935/acre and 3/16 royalty, indicating that's about the average lease bonus that was being paid prior to the pooling application. Continental has also applied for a spacing order, indicating they do plan to drill a well here eventually, and yes, the spacing application indicates it will cover the entire section.

If they drill in an adjacent section instead, it's unlikely you will receive anything from that well since the spacing in this area appears to be only one section at a time, rather than including parts or all of two sections in one well as is done sometimes.

Custer County is a pretty hot area right now so I expect a well will be drilled in your section within a year or two and you would share in the income from any well whose spacing unit includes the entire section (which is likely).

If you sell, you should receive at least $2000/acre in my opinion but of course if you sell then you'd be giving up any royalties from the well that I think will eventually be drilled in return for a larger up-front payment now rather than dribbling it out as royalty income for years. Some people like the monthly checks, while others prefer a nice lump-sum payment up front that they can invest in other things or spend on something now.

Selling half might be a good option for you actually, and if you do decide to sell any or all of this please consider listing them for sale with us on the Mineral Hub (see "Sell Mineral Rights" link on homepage). We will probably be able to find you a suitable buyer at a good price without a lot of hassle.

Hope this helps you out!
Frederick M. Scott
The Mineral Hub
Can I top lease when current lessee has extension option? Asked 12/13/2016
Q: Our lease runs out in May 2017. Unfortunately, we knew nothing abt the value of our mineral rights, so we got a low bonus. Should we be contacting oil and gas companies asking if they\'d be interested in top leasing? It is our understanding that the leasing company we have now can extend the lease we have for another five years at the same rate we got b4. The mineral rights are in Wetzel Cnty, WVA.
A: You are out-of-luck most likely, since most companies will not "top lease" someone whose lessee has the right to extend it for another five years. Instead they will wait until the primary term expires and if your current lessee doesn't choose to extend it for the next five years THEN some other company might be interested in leasing your interest.

For anyone reading this, this is why I generally do NOT agree to those "3+2" or in this case "5+5" options to extend. If they really want those extra years then I may agree to an extension option IF they pay at LEAST 150% of the initial bonus upon exercise of their option, though I prefer 200% (double) the original bonus. If they won't agree to that then I tell them I won't agree to an extension in most cases, but do tell them I will be happy to negotiate a new lease with them again once the initial primary term expires if they want to extend.

Hope this helps you out!
Frederick M. Scott
The Mineral Hub
Shorted on O&G lease bonus? Asked 12/09/2016
Q: My wife and I signed a lease agreement with Rice Energy. We signed for a $1000.00 an acre for five years. My wife\'s mother\'s share who is deceased was 1.66 acres. This share was divided by four children. Three of these children sold their share to Rice Energy. They got .415 of a share each. My wife and I leased our share to Rice Energy and when we got our check we were disappointed due to the fact that our check was short. Instead of getting our share of .415 we got a share of .2215 we called the hotline three times and they do not understand what happened, but, have yet to resolve the issue. What is our next step to get what is owed per our lease contract. We are owed .1935 of an acre and about $193.46 Please Help
A: I expect it's a title issue, and is either their mistake or yours. You should call the landman and ask to whom they paid the bonus and/or how they figured your share and if you don't agree then explain to them why you think they are mistaken and should have paid you more.

Hope this helps you out!
Frederick M. Scott
The Mineral Hub
Grady County Mineral Rights Value? Asked 11/29/2016
Q: I inherited mineral rights in Grady County, OK. How do I \nfind out what this is worth?
A: If you want/need an accurate assessment of value but are not planning on selling at this time then you'd probably want to hire a landman or other oil and gas professional who is familiar with the area who could give you their opinion of the value. It's also possible a local banker or attorney familiar with oil and gas activity in the area could provide that info for you. If you know people in your area who have recently sold their mineral rights this would also give you an idea of what yours are worth.

Alternatively you could use some of the valuation methods used by buyers such as a multiple of the going leasing rates in the area or if they are currently producing, a multiple of your average monthly income over the past six months. For more on these methods please see our Mineral Hub Articles page, where you will find at least one article concerning valuing mineral rights.

One other way to value mineral rights would be to find "comparable sales" online, or at the Grady County Clerk's office if available (which is where all deeds of sale will be filed). The tax stamps required for mineral deeds can sometimes be used to estimate what people paid for a certain mineral property, though some buyers purposely buy more tax stamps than needed in order to make it appear as if they paid more than they did.

If enough recent examples can be found there, that would likely give you a fairly accurate estimate of what they are worth. If, on the other hand, there have not been a lot of mineral purchases in your area (i.e. within your township or adjacent townships) recently then it's likely they are not worth much.

If you are planning on selling them now then I'd suggest listing them for sale on the Mineral Hub as "make offer". The offers received will generally tell you what they are worth to buyers in this area. You can post your own listing on our "Sell Mineral Rights" page, and there is no cost to do so. We will try to find you a suitable, honest, buyer, who won't take forever and a day to close and get you paid.

Please do NOT list them for sale with us unless you are ready to sell now however. We do NOT do "free evaluations" because we are not generally buyers of mineral rights ourselves but will be happy to give you our opinion of what they are worth on a consulting basis if you are unable to find anyone else to do this for you. Please contact us if you want to go that route.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
How to get old leased released (stopped)? Asked 11/20/2016
Q: About five years we leased some minerals in Lincoln County.\nThe land was never drilled during this lease. There was an old well drilled about 1966, stopped producing and minerals released prior to this lease. We have received two check for .93 cents. My wife cashed the first one, but we still have the second. For over a year I have called Eland Energy in Dallas to get the minerals released, but no one will talk to me about the lease. What should I do? Thank You
A: If you are trying to get your current lease released (make them let go of it) then you will need to have a good argument for it, and if the well is not currently producing income in "paying quantities" you would have a good argument for them to plug the well and release your lease.

If they're not making any money producing the well (even though you may be getting royalties occasionally) then it's not producing i paying quantities, and they need to let you go. You may have to take them to court (or threaten to) in order to convince them, but I'd start out with a nicely-worded letter asking them whether they think the well is currently profitable,, and if they do, to provide you with some information showing why they feel that way.

If the well isn't producing enough income from them to recover their lifting costs, well maintenance and other related expenses, then it's not producing in "paying quantities"; and it needs to be if they are to have a good argument for continuing to hold your lease.

Hope this helps you out!
Frederick M. Scott CMM, RPL
The Mineral Hub

Value of Minerals in Stephens County, OK Asked 11/16/2016
Q: Looking for a value of 130 mineral acres in Stephens County, OK, Section 13-2N-6W. Non-producing; non-leased; and according to OCC records, never a well drilled in Section 13.\nThank you.
A: Don't have an exact value for you as that would require a consulting fee, but you might want to read our "What are my Mineral Rights Worth" post on the Mineral Hub Articles page of this website. In that post we discuss various ways to estimate the value of a property.

Hope this helps you out!
The Mineral Hub
Can the Duhig Rule be applied retroactively? Asked 11/15/2016
Q: Is Duhig retroactive? Meaning is it applied to deeds executed prior to 1941?
A: Great question! My opinion would be yes, it can be applied retroactively in juristidictions that have adopted Duhig. This is because Duhig is simply a rule derived from a common law principal which holds that you cannot warrant title to an entire tract of land and then turn around and reserve a portion of the mineral rights under that land without violating your warranty. The warranty implies that you own 100% of the tract AND 100% of the minerals under it, even if you don't. If you then reserve some minerals in the deed, the grantee will naturally assume you are reserving from 100%, even if the 1/4 (or whatever) you reserve is in reality 1/4 of 1/2 (for instance) due to a previous owner reserving 1/2 of the mineral rights and leaving you with just the other half.

Thus, in cases where a grantor gives the grantee no notice of previous mineral reservations but reserves some of the mineral rights when selling, the courts will take from the grantee's remaining interest whatever is needed to make the grantor whole in order to satisfy the warranty, which may leave the grantor with no mineral rights at all even if he intended otherwise. Note that Duhig does not apply to quit-claim deeds (which have no warranty clause).

There are still a few states that have not adopted the Duhig rule, and so in those states it's probably true that Duhig would not be applied retroactively, simply because in those states it's unlikely it would be applied at all.

Courts in juristictions that do not follow Duhig would likely resolve a Duhig-like dispute by either employing a canon of construction or by making their own rule. The Duhig case is an example of a court that decided to write a rule rather than employ a canon of construction and as it turns out a lot of other states went on to adopt that court's rule.

By the way, canons of construction are simply “statements of judicial preference for the resolution of a particular problem” that are “based on common human experience and are designed to achieve what the court believes to be the ‘normal’ result for the problem under consideration.” as stated in Richard R. Powell's book, The Law of Real Property

Hope this helps you out!
Frederick M. "Mick" Scott CMM RPL
The Mineral Hub
Royalty checks constantly late Asked 11/14/2016
Q: For over a year, I've been receiving "consistently" late checks. At present, its been over 100 days since my last check. I'm tired of all the excuses, from the oil company's CEO. What are my options?
A: Could be that they are not getting paid in a timely manner from THEIR purchasers, and thus would not have anything to pay you until they are paid. This happens sometimes when the operator is not the only purchaser of oil and gas from a well. It could also be that the production has slowed down to a point where your royalty needs to reach a minimum amount (i.e. $100) before a check is sent out. You may be able to ask them to adjust it down to $25/month if that is indeed what's happening, and then you'd get more frequent checks.

The royalty owner relations department of the company who is sending you the checks should be able to tell you which is the case, or if it is indeed simply them being late as you say.

Hope this helps you out.
The Mineral Hub
Already sold but unpaid taxes. Can I pay tax and retrieve? Asked 11/02/2016
Q: I sold my mineral rights but the buyer didn\'t pay the taxes or put it in their name. I got a notification stating that they will go to auction if I don\'t pay the taxes. Is it possible for me to pay the taxes and reclaim ownership?
A: I think the buyer of your minerals would be "disappointed" if you tried to get them back after he bought them. What you may want to do however is notify the pertinent taxing authority that you no longer own them and thus unless your deed stated you were to deliver them free of any "encumbrances" then the taxes due would be on the new owner. You may want to forward the tax notice to the current owner so he/she will be aware of it.

The Mineral Hub
Minerals from land grant excluded in 2013 deed? Asked 11/01/2016
Q: This is a great service, thank you. The Homestead act of May 20, 1862 grants homesteaders land, with minerals. I have a copy of a parcel that was granted under this act. Over the years, nothing has been said about minerals in any deed or transfer except the original homestead deed. In 2013, the tract sold and the minerals were excluded. 1) what paperwork should the landowner have to show they still own the minerals?, 2) Are taxes due on mineral ownership if it is unproductive?, 3) how can this mineral deed be transferred?\n\nThank you\nJess
A: If by "excluded" you mean they were not mentioned at all, then they went with the land when it sold in 2013. If they were instead "reserved" then the person who sold the land would still own them and could show that by referencing the 2013 deed where they were reserved.

The Mineral Hub
Bought land w/minerals. When does O&G lease expire? Asked 10/31/2016
Q: I have bought some property where the mineral rights are severed from the surface ownership. The lease agreement is from 1934 and shows no ending date and includes my property and an adjacent property. The lease has been reassigned numerous times and the last assignment was in 2004. There is a well on my property that is not producing but there are 2 wells on the adjacent property that have produced 110 bbls last year. As the property owner I have no legal agreement with the lease operator. Does the lease agreement ever expire or is it forever until there is no more oil in the ground?
A: The lease will expire when production on the leased premises ceases. Once that happens, the minerals will be available for the mineral owner to lease again to someone else.

The Mineral Hub
15% commission on sale of mineral rights fair? Asked 10/28/2016
Q: We have worked with a broker in the past to help us lease our mineral rights in Weld County CO. They are not currently under lease and we want to sell them. The broker wants a 15% commission on the gross sale. Is that reasonable?
A: Depends how many acres are involved and also the value per acre. I'd suggest listing them for sale on our site instead if you are wishing to sell them. We are not greedy and we have a good reputation with both buyers and sellers. Our commissions are based on the value/size of the deal and are paid by the BUYER, not the seller, and the purchase price is never reduced to cover the commission either. You can list them on our Sell Mineral Rights page if you wish.

The Mineral Hub
Neighbor receives a royalty check. Why don't we? Asked 10/26/2016
Q: We purchased our house three years ago and have mineral rights on all 10 acres we own. Our neighbor to the north of us receives a royalty check from three oil wells that are on the south of us. Should we not be receiving it as well? Where do I even begin as I am very unfamiliar with any of this.\nThank you,
A: It's possible the spacing unit for the three wells your neighbor is being paid on does not include your mineral rights. In other words, there could be a "dividing line" separating your minerals from theirs, in which case you wouldn't receive any royalty from those wells.

Well spacing can vary from as little as 10 acres to more than 640. Most states have a governmental oil and gas "regulatory body" that issues spacing orders and well permits etc. You might see if your state's has a website where you can search for the wells in question and determine their spacing that way.

You could also perhaps call the operator of the well (likely the company name is on your neighbor's royalty checks) and speak with their "owner relations" or "division order" departments to see your minerals are within the spacing unit for those three wells. You'd need to provide them a legal description in order for them to help you, and the names of the wells would also be helpful to them as well I'm sure.

It may also be the case that the oil company is not aware that you purchased the 10 acres and so would not be aware they should be paying you (if your minerals are included in those wells) until you notify them and provide them with documentation showing your ownership. They would need copies that had been "filed of record" with the county clerk etc. in order to transfer any interest the previous owner of the 10 acres may have had in those wells to you as the new owner.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
100% land owner 50% minerals seismic/drillsite payment? Asked 10/18/2016
Q: I have a 56 acre field that I own along with 50% mineral rights I was just sent a letter from a drilling company that they will be placing probes under ground with out a contract saying they have contract with other mineral owner so I\'m out any cash on that deal sounds fishy to me My question is if they start drilling and they find oil/gas I do receive royalties and If they drill from my property will they have to lease land for drill pad
A: It is unfortunate that a company only requires "permission" from one mineral owner in order to do seismic studies, but that does seem to be the case, and it's happened to me as well. Good news is that if the results entice them to drill for oil/gas then you would benefit if your mineral rights were included in the spacing unit. If the seismic study does not yield good results it does not necessarily "condemn" your property however, as new technology or additional studies may still yield results that show the area as productive and thus could still be drilled later.

It is also common for an oil company to pay a "bonus" to the drillsite land owner as compensation for the "inconvenience" of having a well site on their land. It it not so much a "lease" of the land as it would be a one-time "bonus" payment. In Oklahoma I've seen anywhere from a one-time payment of $5000 all the way up to $25,000 to a landowner who owns the acre or so where the drilling rig/well will actually be located.

The "drillsite bonus" is usually a separate agreement with the landowner if the mineral rights are not also owned. Even if the minerals are also owned (or 50% as in your case) there is often an agreement for "surface bonus" that is separate from the oil and gas lease. I'd check with your attorney as you'd want any surface bonus agreement to be in writing just like you would the oil and gas lease.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Valuation of non-producing leased mineral interests Asked 10/12/2016
Q: I am trying to place an approximate value on inherited mineral interests. One is in Larimer County, CO, and we received a leasing bonus of $350/nma in 2015 for 5 years. The other is in Kit Carson County, CO, and we received a total bonus of $73 for 5 years back in 2012. I dont know the acreage or nma on this one. I would appreciate any help you can give me on this! Thanks!
A: A "quick and dirty" value could be estimated by multiplying the total lease bonus received for each property by 2.5. For instance, a TOTAL bonus of $73 X 2.5 = $182.50 etc. If current lease bonus amounts in the immediate area (i.e. within a few miles) are greater or less I'd use those for your calculations instead.

If the properties are now producing you'd use a (larger) multiple of the average income per month over a six-month period. You can read more about valuing mineral rights on The Mineral Hub's "Mineral Hub Articles" page.

Hope this helps you out!
Frederick M "Mick" Scott CMM, RPL
The Mineral Hub
Valuing Louisiana mineral rights for estate purposes? Asked 10/12/2016
Q: My father & mother have a Royalty Deed JTWROS for three wells in Louisiana St Martin Parish. Deed was produced by Tri-X Inc. (Nevada Corp) located in San Jose CA. Current owner operator is TexPetInv Co, Houston, Tx. The wells are non-producing. Last production was 10/31/2013 & it was a payment of $7.44. No payments for 2014, 2015 up to current date! My father is deceased 2009 and now my mother passed Feb 6, 2016. Estate is in Maryland. I am the Executor of mother\'s estate Prince Georges County MD. My Estate attorney in Annapolis MD told me I must have the Royalty Deed appraised because it is an asset of mother\'s estate. I priced mineral appraisers & found they were priced from $4,000 to $5,000. A Lawyer in St Martin Parish said to probate the \"deed\" in St Martin Parish, LA will cost $1500 to $3000 US dollars. So, for non-producing wells what does one do? Is there not some way to \"probate\" the mineral royalty interests to mother\'s heir and their heirs without paying astronomical fees for non-producing wells? I understand non-producing well have value. (You too can tomorrow win the lottery.) What does one due where the \"the bang for the buck\" simply is NOT worth it. Can one do anything to keep the mineral royalty interest without paying appraisers and lawyer enormous fees?
A: My opinion is that non-producing mineral rights are worth something, but most likely not enough to have to trigger the federal "estate tax" so I wouldn't worry too much about putting an exact value on them right now. You could, I suppose, value them at between 36 and 60 times the average monthly income that was produced when the wells were still producing and use that to value the property just to "be safe".

For instance, $10/month average income per month for the most recent 6-month period (2013?) would mean $10 X 36 = $360 or $10 X 60 = $600. Granted this is not "official" appraisal but I doubt the feds would argue with that if it ever came up as it represents what many buyers would value a producing property at, and since it's not even producing currently it would be worth even less unless there was active leasing activity in the immediate area (in which case you could estimate the value by multiplying the current leasing rates per acre by 2-3 times...i.e. $500/acre lease bonus in the immediate area X 2 or 3 = $1000 to $1500 respectively.

Note that to acquire "marketable" title to the property it may be necessary (as you noted one attorney mentioned) to have their estates probated in Louisiana since the property is located there, or at least due what's called an "ancillary" probate to one that has or will be done in Maryland.

I don't think there's much change of you "losing" the mineral rights even if you do nothing to probate their estates (though check Louisiana state laws on that to be sure). It's fairly common for heirs to delay probating mineral rights that aren't currently worth much, sometimes for years. You might want to put a "notice of address" on file in the county where the minerals are located however, in order to alert landmen/oil companies that you have a claim to these mineral rights so they can have a way to contact you in the event activity picks up in the area. The actual filing fees for such a notice would be less than $20 and you could draft the document yourself likely using similar documents found online or by checking with the county clerk's office in the county where the mineral rights are located. You could also have an attorney prepare and file it for you, and the charge would likely be less than $300 to prepare and file it.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Valid Mineral Rights Conveyance Asked 09/26/2016
Q: 30 years ago my stepfather purchased land from his friend and neighbor in Virginia. Both are now deceased and in reviewing the deed, we discovered the following paragraph: \"It is distinctly understood and agreed by the parties of the second part that this deed is intended to convey only the surface rights to the above-described real estate. Title to the oil, gas and other minerals thereunder, and all royalties and proceeds thereof, is hereby specifically reserved by the parties of the first part. It is agreed, however, that no machinery will be placed upon the above-described real estate for the purpose of extracting oil, gas or minerals.\" \nIs this a valid mineral rights conveyance if both parties agree that no extraction machinery can be placed on the property? If so, what is being conveyed: loose stones on the ground? I thought a valid mineral rights conveyance could not prohibit mineral extraction. If we want to remove this encumbrance to sell the property, will a Quit Claim Deed work? Thank you for your feedback. There is no one knowledgeable about mineral rights in the area and I\'ve read everything I could find on your website as well as on mineral rights in Virginia looking for guidance. We have no idea why this was even added to the deed.
A: Sounds like your stepfather's friend sold the land but kept the mineral rights, and also "forbade" anyone to place oil and gas equipment on the land and your stepfather agreed. Sounds like your stepfather probably bought the land with the hopes that no oil and gas drilling would occur on it.

You cannot prevent mineral owners from extracting their minerals. If the current owners of the mineral rights need to place equipment on your land to do that, they can. Likely they could attack from a different angle though and not have to place equipment on your land.

You cannot remove the encumbrance from the deed as far as I know, but frankly I think it would be unenforceable anyway due to the mineral rights estate being the "dominant" estate when it comes down to it.

Hope this helps you out.
The Mineral Hub
Transfer of mineral rights from previous owner. Asked 09/20/2016
Q: I purchased my home in May, 2013 in Tarrant County, TX. Its now 10 years old.\nAccording to Chesapeake Energy, the previous owner never set up\n an account with them. I did fax all necessary paperwork to\n them including my mineral rights ownership in order to set\n up my account with Chesapeake Energy. It has since been 6\n months and Chesapeake Energy is telling me it will take up to a year to get\n my account set up and receive a check. We are being told that they have to\n set up the previous owners account first, before they set up my account\n\nIs any of this true? Does it take a year to get an account set up and receive a check?\nDoes the previous owner need to be taken care of first, although \"no one\" knows where she has moved to?\nI feel like I am getting to run around. What do I do to expedite the process. Any\ninformation you can provide will be greatly appreciated.\n
A: Good news is, once you finally do receive a check from them you can likely request that statutory interest be paid on top of the principal due to their delay. Check your state's laws on late royalty payments to determine if that is the case.

Yes, it can take six months or more sometimes. It shouldn't, but it does. I would suggest getting an email of the person who can help you and then contact them that way rather than by phone so you'll have a record of the conversation.

The Mineral Hub
Signing minerals from Mom to me? Asked 09/16/2016
Q: My mom is sick and would like to sign her mineral rights over to me before she passes. \nWhat do we need to do to get them signed over to me?
A: Hire and attorney to draft a mineral deed or quit-claim deed from your mother to you, or draft one yourself if you know how. You'll need to include a proper legal description in the deed so anyone reading it can locate where the property is. I would suggest getting an attorney's help if you are not familiar with proper deed drafting.

The Mineral Hub
Decimal Amounts Asked 09/11/2016
Q: I own .0025 RI in a well, but often I see on the royalty check it split out into two different payments of .00125. Why is this and how can I easily keep track of it?
A: Could be two different purchasers of your production. Check with owner relations department of company who sends you checks as well as they could tell you more certainly what's up.

The Mineral Hubb
Mineral Rights Value Asked 09/08/2016
Q: I have been approached by a company from Oklahoma making an offer to buy 90 undivided acres of mineral rights in south Payne County. It has not had a lease on it since 1984, and I am not sure there was drilling then. What is a reasonable per acre price for mineral rights in this area? If it is far above the offer of $40,000, I will seek to sell it ourselves. Thank you in advance for your assistance.
A: Depends on activity in the area. My advice (if you really want to sell them) would be to get offers from more than just one party. That's how you establish true market value if you don't know how to value mineral rights yourself. How do you know this buyer isn't low-balling you? You don't! He might not be, but only by seeing what others might pay or doing some research yourself will you be able to determine that.

We help those who list their minerals for sale on this site with valuations whenever possible, but ultimately it's up to the seller to decide what is fair. If you do want to sell them you can list them for sale on The Mineral Hub and we'll do our best to help you value them, but ONLY if you are truly interested in selling them (for a fair price obviously).

If you're not sure about selling yet, you might want to read our mineral valuation article on the Mineral Hub Articles page of this website. We explain a lot about how buyers value mineral rights they are thinking of purchasing. This is similar to the way we (and you) can determine value.

Note:
The Oklahoma Corporation Commission is the State regulatory body for oil and gas in Oklahoma. On the OCC website (www.occeweb.com) you can search for drilling permits, completion reports, as well as current or past production figures for wells near where your mineral rights are located. You'd need to have the legal description handy (Section, Township, Range) in order to narrow your search down to the correct area. You could also visit the county clerk's office in the county where your mineral rights are located and search for recently-filed oil and gas leases in your immediate area since leases are also a good indicator of the activity in a given area. The more activity there is in your immediate area, the more your mineral rights will be worth to a potential buyer.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
House seller leased mineral rights, wants to keep. Asked 09/07/2016
Q: If you\'re wanting to buy a house and the seller had already leased the mineral rights out, but won\'t transfer the lease/mineral rights to the buyer at time of closing then is it a bad idea to go ahead and purchase the house? What would be some reasons the seller wouldn\'t want to transfer the mineral rights until the lease was up? It will be up in 8 months.
A: Not necessarily a bad idea to go ahead with the house purchase, but would be preferable to have owner transfer the mineral rights at closing for reasons stated below. I'd also suggest getting something in writing, notarized, stating a specific DATE when the minerals will be transferred to you, and at what price (unless included already in house price).

By waiting until the current lease expires, he/she may be hoping a producing well is drilled before the lease is up and then may decide to keep the rights if the well is making lots of money, or perhaps will want to sell them to you for a higher price.

Could also be there is an extension clause in the lease that, if exercised, would pay WHOEVER owns the minerals AT THAT TIME a signing bonus, and they want to be the owner if that happens in eight months so they'll get the bonus rather than you.

Once the minerals are transferred to you you'll be bound by the terms of any lease that is in force at the time. Once you own the mineral rights, and once the current lease expires you of course can lease them to another company on your own terms assuming another company is interested in leasing them.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Mineral Rights and Conveyance in SC Asked 09/07/2016
Q: Dad dies with a will , distributing the land to his children and friends. Children and friends agree to sell the land but discovers that A,B,C,D,E,F,and G all have mineral rights in the land. If A-G are dead do they rights pass to their heirs? And can service through publication be an option in a Quite title action?
A: Is this a homework question? Apologies, but kind of sounds like one. First off if dad dies without a will, minerals and land won't automatically go to his "children and friends". No will (i.e. "intestate") means property will pass by intestate succession laws of the state in which the property is located.

If A-G die their minerals will pass to their heirs, yes (either be testate or intestate succession depending on whether they have wills or not).

Quiet title is a court action and a judge will decide who gets what in that case. See an attorney about that.

Sincerely,

The Mineral Hub
Horizontal Drilling... Asked 09/02/2016
Q: If a Horizontal Well/Pipeline is being drilled on a section other than mine but crosses thru my mineral rights section,\ndoes this require the drilling operator to have a \'Lease\' with me to do so???
A: Only if the perforations cross over into your sections. In other words, if they are punching holes in the horizontal pipe as it passes through your section and obtain production from same, then yes, they should have to lease you.

The Mineral Hub
Mineral Rights Search Asked 09/01/2016
Q: How can you find out if you have the mineral rights to property that you own.
A: You look on our "Mineral Hub Articles" page and read the article entitled "How Can I Locate Who Owns the Mineral Rights Under My Land?" article.

The Mineral Hub
Mineral interest inheritance Asked 09/01/2016
Q: I recently inherited mineral interest from my deceased grandma. In her will (Oklahoma) she states that her interests be split between me and her 4 other grandchildren with my 2 aunts as co executors of the will. One aunt is trying to force all 5 to sell so she doesn\'t have to \"babysit our assets\". My question is, wouldn\'t the oil company pay each grandkids directly since the interests were left to us? Or would the payment go through the executors to be split between the 5? Also, is section 24-6N-5W in Grady county Oklahoma producing?
A: Yes, the oil companies would pay you directly once your aunts deeded your inherited minerals over to you, which they could do easily enough with an "executor's deed" either during or after your grandmother's estate is probated in Oklahoma. A final decree (after probate) can also be used as a conveyance instead of a deed.

Note that until the companies are notified of your grandmother's passing they will continue sending the checks (if any) to whomever (I assume your grandmother) they were sending them to prior. If the executors have access to her bank account they could likely deposit and cash the royalty checks (if any) as they come in and distribute the funds to the five grand kids until her estate is probated, after which point you'd want to make sure someone notified the oil companies to direct them to pay you grand kids rather than continuing to send checks to your grandmother. They will ask that you send them "proof" of your inheritance, which can be as simple as sending in a copy of the "final decree" or similar that is produced as part of the probate process.

As far as "babysitting" your assets, this would only be necessary until (at most) after your grandmother's estate was probated. If there is no current production or leasing (bonus) activity then of course no need to notify any company, but you'd still want to make sure your grandmother's probate was completed and filed of record in Grady County, OK in order to put anyone looking on notice that your grandmother has passed and that you've inherited some mineral rights from her.

As for production in 24-6N-5W there is currently none, though there is some in several surrounding sections, mostly small to medium sized oil wells.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub

Do companies hold back production on low prices? Asked 08/29/2016
Q: I am purchasing property, about 9 acres, in Montmorency County, MI, including mineral rights. There is an existing lease from 1992 currently producing and paying minimal gas royalties, which I will be entitled to. I do not think there is a well on the property (maybe a pipeline?) but there are two unitizaion agreements involved. \n\nRoyalties began high but over the years have dwindled to almost nothing. Still, there are a huge amount of producing wells in the county. Is there any chance that production (and royalties) will recover or is it likely that the wells have reached the end of their production lifetime? Do the well owners \"hold back\" production when gas prices are low?
A: Always a chance prices will recover eventually. Almost a certainly actually, and yes, some companies cut production from their wells when prices are down.

Eventually a field/well will "play out" but it's hard to predict when that will happen without access to geology reports and production and drilling info for the area. A lot of this can be found online but basically if more than a few wells have already been drilled on a section of land, and those have played out without new ones being drilled, then it's a good bet that section is played out barring some new technology or higher prices that would make it economically feasible to search deeper.

The Mineral Hub
Offer to Lease in Upton County Asked 08/26/2016
Q: My elderly mother owns mineral rights in several counties \nin Texas and gets frequent offers to lease or purchase. She\nhas no interest in selling at this time and has asked me to\nnegotiate on her behalf. The most recent offer to lease comes\nfrom Ridge Natural Resources. Can you offer any advice \nhere or let me know if this would be a fair offer:\n$2,000 Net Royalty acre with a 1/4 Royalty\n2.5 net royalty acres, or $5,000
A: Best to check with others in the area to see what they've been offered if that info is available. You can also read our leasing tips article on the Mineral Hub Articles page for more tips on how to make sure you are getting a fair deal for your lease.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Prior Power of Attorney of Deceased Father and HBP Issue Asked 08/22/2016
Q: Pursuant to our father\'s probate (TX), my sibling and I own mineral interests in West Virginia. My father executed a Power of Attorney in 1989 and passed away in 1997. Apparently, because these interests are still \"producing\" (straight wells and probably not the minimum requirement), my sibling and I are still bound by our deceased father\'s original 1989 power of attorney, thus depriving us of resigning individually with any other Lessee at a far greater advantage both immediately and long-term. Even though both Texas and WVA law indicate a power of attorney expires upon the death of the principal/grantor, how does this evil HBP override that? and is there no recourse?
A: You cannot be bound by a POA once the principal dies. You may however be bound by the LEASE he (or one of his predecessors in interest signed, and will be until production on the leased premises ceases (i.e. until all the current wells run dry and assuming none are drilled to replace them and continue the production). This would be the case with or without your father's POA. In fact, the language extending the lease for as long as there is production is probably stated right there on the lease. This is common.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Elk City, OK Well Production Asked 08/20/2016
Q: I own the mineral rights to four large horizontal wells in Beckham, County Oklahoma. They are Smith 1-17 H-Initial production1,200 barrel of condensate per day, and 12,000,000 cubic feet of gas. The others are similar in size and are Madole 1-18H, Rosa 1-17 H and Smith 2-17H. They are all located on sections 17-18 11N 21W in Beckham County, Oklahoma. Initially, my royalties were good as I have rights on about 30 acres on both 640 acre tracts. These wells have been producing for several years, but I have noticed a steep decline in royalties due to natural depletion and low oil and gas prices. I was told these wells (because they were all some of the largest in the area to begin with) were good candidates for re-working and perhaps even re-fracking. I know the prices are low, so I am not sure this will happen anytime soon. I have been also told since they have only drilled one very productive well on section 18 so far, that more should follow. My Landman from Apache told me there are multi-plays in that area which could also reap future rewards. My royalties have stabilized for the past year, but are far less than the initial production. My questions are: Will they be re-worked, re-fracked? Are they choking back the wells because of low prices? What does the future hold for that area in general over the long term? Thanks for your advise. Kindest Regards, Susan K.
A: I am familiar with those wells (I am in Elk City), and yes they were really good at first, but both prices and production has dropped off significantly in the past two years, leaving you with a "double whammy" as to income.

The Oklahoma Corporation Commission is the State regulatory body for oil and gas in Oklahoma. On the OCC website (www.occeweb.com) you can search for drilling permits, completion reports, as well as current or past production figures for wells near where your mineral rights are located. You'd need to have the legal description handy (Section, Township, Range) in order to narrow your search down to the correct area.

I took a look and saw no permits in the past year for new wells in 17 or any of the surrounding sections. Apache did drill and complete 3-4 new wells last year in 20 and 21 of that township however.

As to whether they are "choking back" your wells I really can't say for sure, but it is done sometimes. You might call or email Apache owner relations and ask them if they can find that out for you. I think prices will eventually rebound, probably within the next couple of years but it's also very unpredictable. Even T. Boone Pickens didn't get it right when he predicted $200 oil prices back in 2008.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
WV lease expiration. Pads built, but no well. Now what? Asked 08/18/2016
Q: Our Marshall, County, WV 5 year lease has expired. Infrastructure (pipelines and drilling pads) have been installed all around us but no other actions happened or are likely until gas prices recover. When they do, are we protected? They can\'t just take the gas, can they? Will the driller have to approach everyone again to take their gas? (By the way, when a drill pad is installed, do they lay the horizontal fracture lines or just get ready to do that later?) I have read that in West Virginia the State itself takes a royalty (1/8th, I believe) from the point of drawing the gas. This would help maintain an honest, public record of the take, I should think. With so many energy investors, how could they do otherwise? You mention often your Oklahoma Corporation Commission. There should be a West Virginia public authority as well. Many thanks! \n\n (PS, your \"Terms of Use\" should be on a \"separate window.\" Right now if I click on it my question is lost.)
A: If the primary term of your 5-year lease expired without them commencing a producing well and completing it in a timely manner then your lease is expired and they cannot just "take" your gas, and certainly cannot drill another well without leasing you again.

The West Virginia Department of Environmental Protection is the regulatory body for oil and gas in West Virginia I believe. You can find their website here:

http://www.dep.wv.gov/oil-and-gas/Pages/default.aspx

Hope this helps you out.
The Mineral Hub


Hope this helps you out.
The Mineral Hub
Mineral ownership questions Asked 08/12/2016
Q: My uncle had a will that upon his death he gave his separate property (inherited from his parents) to his wife. His wife shortly after his death gifted some land to his great niece. (2) years later this same niece purchased the remainder of his property. The property was partitioned but not the minerals. His wife died without a will. There was no mention of the minerals being deeded to her. The life estate she created was eliminated upon her death. In both the warranty deed and gift deed shouldn\'t the mention of the minerals have been spelled out to include?\nInstead it says, it\'s expressly made and accepted subject to any and all , including but not limited to, minerals previously reserved or conveyed, if any, relating to the property conveyed. The documents says (all that certain tract or parcel of land) the other document says (the surface). I hope you can clear this up for me.\n
A: If your uncle's wife died without a will, then her property distribution would be decided by the laws of intestate succession in the state where the property is located. In other words, state law would determine who gets what.

If she had a life estate that was terminated at her death, then the remainderman of that life estate would get what was in the life estate.

No deed needed for the minerals to be transferred to his wife because it was stated in uncle's will. The gift and warranty deeds from her to the niece would include any minerals she owned under the described land unless she specifically reserved them (or stated "surface only") in either or both deeds.

The Mineral Hub
Blaine County top lease offer? Asked 08/04/2016
Q: We have a 2000 per acre to top lease in 16-15-13 in blaine county. Do you think this is a fair offer and what are the particulars on this top lease?\n
A: There are currently two wells operated by Marathon Oil Company in that section of Blaine County (Oklahoma, which I assume is the state you refer to). Neither is doing very well currently and they may have even stopped producing.

If you are talking about 16-15N-13W of Blaine County, OK then I'd say it's a fair offer as it reflects recent bonus amounts in surrounding sections. As to the "particulars on this top lease" I really can't help you with that since I haven't seen the lease. You might want to contact a knowledgeable oil and gas attorney on that point.

Hope this helps!
25% royalty vs. 25% overriding royalty Asked 08/01/2016
Q: s asking for everything above 75% net revenue to be reserved as an override the same as asking for a one quarter royalty interest?
A: Overriding royalty interest is not the same as "regular" royalty interest. So a 1/4 royalty interest is not necessarily the same as a 1/4 royalty interest.

An overriding royalty interest is the right to receive revenue from the production of oil and gas from a well. The overriding royalty is carved out of the lessee's (operator's) working interest and entitles its owner to a fraction of production.

An overriding royalty interest is in excess of the royalty provided in an oil and gas lease, and is usually added during an assignment of an oil and gas lease to another party, rather than being given to the mineral owner when the lease is signed.

I think you are probably referring to a company offering you a 1/4 royalty if you agree to lease with them. They will usually also offer a "lease bonus" of a certain amount per acre in addition to that as incentive to sign the lease.

Hope this helps you out.
The Mineral Hub
Selling mineral interests Asked 07/26/2016
Q: My dad, brother and I inherited mineral interests from my mothe r when she passed away. We split the royalties my dad 50% and my brother and I 25%. My brother has decided he wants to sell his portion. It is about 80 acres total. Royalty interest is about .0008%. My dad and I don\'t want to sell ours. How would this work? Would he be offered so much an acre and would he only be paid 1/3 of that per acre or would he be paid based on his royalty percentage?
A: Your brother could sell his entire interest (or just part of it) and it wouldn't affect your share at all.

Mineral rights are usually "undivided", meaning each of you owns a share of each molecule of oil or gas under the entire 80 acres. Thus if your brother sold his 25% share of each molecule under the 80 acres you and your father would still own your percentage and the person your brother sold to would then own his. Sounds kind of "corny" I know, but the "molecule" analogy is due to the fungible nature of oil and gas.

Your brother owns 25% of all the minerals under the entire 80-acre tract, thus if he sold his 25% you'd still own your 25% and your father would still own his 50%.

The Mineral Hub
Reverse & rebook fees Asked 07/22/2016
Q: My sister and I own mineral rights on 30 acres of land in Oklahoma and have been getting royalty checks since 2012. The royalty checks stopped in November and we were not told why, so my sister called the company and the revenue accountant told her that our royalties are being used to pay back \"reverse & rebook\" fees from 2012. We are confused about the terms and wonder what this means. We are not sure how this liability occurred. I have a call into the accountant and he has not returned my call.
A: Sounds like the oil company overpaid you by accident, and is now "making it up" by withholding royalty until the overpayment is recovered. This sometimes happens when one of the working interest owners in the well takes more than their share of gas, but could also happen for other reasons. Not that uncommon really and it's likely you were not the only ones affected. Basically they are "reversing" the overpaid months and "rebooking" them with the correct amounts.

To determine "exactly" what happened you could of course hire an auditor on your own dime and have them look into it but usually there is nothing "surreptitious" going on.
Conveying mineral rights with minerals reserved? Asked 07/20/2016
Q: Party A sells 60 acres of oil and gas to Party B and excepts 15 acres that was previously sold to Party C (The oil and gas was excepted and reserved by party A in the sale to Party C) Is the oil and gas under the entire 60 acres conveyed or only 45 acres of oil and gas?\nThanks
A: Party C would still retain 15 acres if in fact they were reserved in the deed to Party C. Party B would own 45.

The Mineral Hub
Force Pooled in OK even though I leased? Asked 07/19/2016
Q: I was notified that my minerals are being force pooled, even though I told them I am under lease until September 2016. What happens in this case?
A: You can safely ignore the pooling order if you in fact leased prior to the order being issued. They probably listed you on the pooling order by mistake. This assumes the pooling order covers the same lands that you already leased.

The Mineral Hub
How am I contacted for leasing? Asked 07/16/2016
Q: Sold a tract of land in Montgomery County Texas in 1996. \nI retained the mineral rights. How are you contacted if any\ndrilling or gas production is done on this lease since it has\nchanged owners?
A: Potential lessees will contact you using the information provided on the deed where you sold, which should be filed in the county recorder's office and so should put them on notice that there is a new owner. If you retained the mineral rights they would be aware of that as well as long as it was noted on the deed where you sold the land.

The Mineral Hub
Draft new deed to include husband on mineral rights? Asked 06/28/2016
Q: How do I create a new deed in McMullen County, TX so that my husbands name will also appear on royalty checks?
A: Have an attorney draft the deed if you don't have experience in such things. You want to make sure it's done correctly. Worth hiring an attorney if you are not used to drafting deeds.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Landowner bonus if well drilled on land? Asked 06/22/2016
Q: What is the normal compensation for the land onwer when drilling a well
A: $5000 to $25,000 (if in hot area) is common.
Mineral Rights Transfer to Heirs Asked 06/11/2016
Q: My father died with a will. He has ownership of mineral rights in Lincoln Parish, Louisiana. His 4 children would like to transfer the mineral rights over, but we all live in another state. Are there any companies we can contact that will help us to transfer the minerals over to the remaining children. \n\n\n\n\nHow can I transfer mineral rights to the remaining 4 children. My father died and now we are trying to transfer the mineral rights in Lincoln Parish, La but we live in another state. How can we find someone to help us to do this.
A: You could contact an attorney in Louisiana to help with the transfer. In order for the heirs to have "marketable title" to the inherited mineral rights the attorney would probably tell them that they need to probate their father's estate in Louisiana. Since there was no will it would probably be a fairly simple probate, and could likely be done "through the mail" with the attorney's help.

The heirs may be able to lease the minerals to an oil company without a probate by providing a copy of their father's death certificate, but eventually (especially if a well is drilled) it would be best to probate the estate in order to solidify their ownership.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Determining amount of mineral interest owned Asked 06/11/2016
Q: I have mineral interest in a number of counties in Oklahoma. How can I find out how many acres of mineral interest I own in each county? I have legal descriptions but no info re amount owned.
A: If they are producing (i.e. you are receiving royalty checks) you could use the decimal interest (i.e. .0004367 etc.) on your check stubs to estimate the acreage the oil company is paying you on. If you leased them recently you could contact the lessee or find your bonus payment receipt. The receipt/check would likely specify the number of acres they paid you on.

If not leased, you (or someone you hire) could visit the county clerk's office and follow the title chain back until you find an actual acreage figure, rather than just "all my interest" etc. Once you determine that (or go back all the way to "patent") you can follow the title chain back up to the present, subtracting the sales along the way in order to determine what is left at present.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Change in title opinion - increased interest Asked 06/09/2016
Q: We receive royalty income from 2 operators in Texas. Both of the operators have producing wells in the same general area, and our decimal interest SHOULD be the same on both leases. The first company recently contacted us and notified us that there was an updated title opinion - due to the location of a will - that increased our interest 2.5 times. We have informed the second company of the will, and they are holding payments while they investigate - but stated that they had no recourse to pay us the back royalties due (which the first company is paying back 3.5 years). On top of that, the second company recently filed chapter 11 (Breitburn). Do they not have to pay us the arrears as well if the title opinion proves out?
A: Sounds like perhaps one of the wells may have been "despaced" thus increasing the ownership for those within the new, smaller, unit. This is really a question for your attorney however since that's only one possibility. Without actually seeing the paperwork it's hard for me to "guess" what is going on here.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Ballpark value to sell Cleveland County, OK mineral rights Asked 06/08/2016
Q: My aunt and I have 20 acres in a 80 acre spacing in 27...9n...3w in Cleveland County Oklahoma.It is currently leased at 1000 nma with 2 year extension at same bonus. Lease is 18 months into 3 year lease. What would be fair offer to sell be. Thanks
A: Based on your lease bonus, I would value these at no more than 1.5 times that amount (i.e. $1500/acre) in this market. In better times the multiple would be higher than 2, but "that was then". Seeing no current permit application for a well and no recent leasing activity it's unlikely the lease will be extended unless oil prices rise substantially by then. Buyers would be aware of this as well, which is why they won't be to anxious to buy them at higher multiples. If they weren't currently leased they'd be worth even less to most investors.

Sorry to be the bearer of "bad" news, but hopefully this helps you out a little.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Advocate Oil & Gas? Asked 06/02/2016
Q: I\'m new to owning mineral rights, which I inherited from my mother and I\'ve been approached from Advocate Oil & Gas, to sell my mineral rights. It\'s for a section in Grady County, OK. Does anyone know anything about this company ( reputable, honest, etc.)? Do I need a lawyer before selling (I really can\'t afford one)? Any help or suggestions would be greatly appreciated. Thank you.
A: The answer is right in front of you. If you haven't already sold them you should consider listing them for sale on this site, The Mineral Hub. They'll be exposed to numerous reputable buyers that way, which is what you want in order to help ensure you receive a fair price. Grady County, OK is an active county these days so it's worth doing it right.

P.S. I have heard of "Advocate" but know nothing about them, other than they have a pretty catchy name ha ha!

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Oklahoma pooling order options? Asked 06/01/2016
Q: I recently received a pooling order for my one mineral acre in Section 32 of McClain County, Oklahoma. The prospective well operator requests that I elect an option of consideration from several possibilities. It appears that the range is basically from a bird in the hand to two in the bush. In other words, I can request a specific payment up front, in lieu of paying the costs of production, but settle for less royalty. Or, I can take little or nothing up front, assume the well will produce, and request a larger royalty in the event of production. \n Does anyone have any insight into these options, and is my basic analysis correct? Thanks to anyone out there with any ideas about this.
A: Since you only have one acre to lease I'd go for the highest royalty and lowest bonus (which might be no bonus). Normally I'd say go with 3/16 and a bonus (a nice "middle ground" since the future of a well is so unpredictable) but in cases such as yours where only a small amount of acreage is involved the benefits of the higher royalty will likely outweigh the loss of a (probably) insignificant bonus if a producing well is drilled.

One other option would be to participate in the drilling of the well by paying your proportional (one acre out of the total acres in the unit) share of the estimated costs needed to drill and complete the well to the operator. If a producing well is eventually drilled you'd be paid for your entire one-acre share of the net proceeds from the well, rather than reducing it down further to a royalty.

For instance, 1 acre in a 640-acre drilling unit means you'd be entitled to 1/640 of the net revenue from the well, rather than the 1/640 X 1/4 you'd get if you simply leased (or were force-pooled) for 1/4 royalty.

That said, I would advise NOT to participate in a well unless you know the business pretty well. To participate with even your one acre could easily cost $10,000 up-front if it's an expensive multi-million dollar well; and if I dry hole were drilled, or if the well didn't produce as expected, or had equipment issues etc. you'd be out some or all of that money and could even have to pay more for your share of plugging a failed well later on.

Not for the faint of heart! Don't participate unless you can afford to lose ALL the money you put in to it, and frankly unless you lose DOUUBLE that amount. You've I'm sure heard that the oil and gas business is "risky". Well, it really is, so don't gamble the rent money on this. Lease or be force-pooled instead unless you are sure of what you are getting in to (tempting as it may be).

Hope this helps you out!
Mick at The Mineral Hub
My wells are underwater (literally). What to do? Asked 05/31/2016
Q: Is there a Hardship I can file due to my both wells being under water by the Mississippi River for the past 2 years? Isn\'t there a Hardship I can apply for just like a hardship other victims by tornadoes can apply for disaster relief? Please let me know ASAP.. Both wells have been under water since February 2015 and I haven\'t been able to receive any Royalty checks because of this.\n\nThank You,\n\nClaiborne Hollis
A: I know of no such "hardship" claim you, as a royalty owner, could file in order to obtain money from the government in this matter.

If you are a royalty owner in a well that is literally underwater, you could however argue that the operator of the well should plug the well(s) and release you from your lease because there is no longer any production. This option wouldn't provide you any money either, but at least you'd be free to lease to another company who could perhaps drill another well from a dry location to reach the oil/gas under the river that is currently not being produced.

There is also a "prudent operator" standard implied in all oil and gas leases that would apply here. The standard requires that the operator should do whatever a "prudent operator" would do in a similar situation, and if possible and economically feasible, restore the wells to production. The standard is similar to the "reasonable person" standard used in court cases. Frankly your situation is pretty unusual so I'm not sure how it would be handled by said "prudent operator". You might check with an oil and gas attorney in the area for suggestions on how to go about dealing with the operator of the wells.

If it were me I'd contact the operator and see what, if anything, they plan to do to rescue their "drowning" well. If they can't or won't return it to production then I'd ask them to release me from the lease since once production is no longer obtainable the lease would terminate of its own terms anyway since most leases are only good for as long as there is "production from the leased premises". If you request that "out" however, the operator could claim "force majeure" as to the flooding and thus attempt to keep the lease active. If flooding was in fact deemed to be an "act of God" (i.e. out of the control of the operator/lessee) then they could probably keep the lease active even without production until the lease is no longer underwater.

One other option would be for you to try and sell the "submerged" mineral rights to someone, though you might have a tough time of it as long as that underwater lease is active and there is no production. It's an idea though.

That's certainly an interesting story you have there. Hope it works out for you and thanks for sharing it!

Mick at the Mineral Hub
Mineral rights transfer with land if not reserved? Asked 05/26/2016
Q: I am looking at land where the 1982 warranty deed states that 50% of the mineral rights will be retained and 50% will go with the land to the new owner. The next deed in 2006 from the buyer of the 1982 deed states nothing about transfer of the 50% share of mineral rights, although it is a Warranty deed. Does that mean that the previous owner from 1982 retained his 50% mineral rights along with the two sellers in 1982 who kept 50% of the mineral rights? My realtor says that if it is a warranty deed, the mineral rights go with it unless excepted in deed.
A: The 2006 deed would transfer the land, and any mineral rights owned under the described land owned by the grantor of that deed at the time since none were specifically reserved. Sounds to me like the original 1982 guy still has the 50% he reserved in the 1982 deed, but the other 50% is now owned by the grantee in the 2006 deed since they weren't specifically reserved by the grantor of the 2006 deed.

Hope this helps you out.
The Mineral Hub
GIFTING OF MINERAL RIGHTS TO INDIVIDUALS Asked 05/25/2016
Q: HOW DO YOU REPORT THE GIFTING OF MINERAL RIGHTS ON FORM 709? AND DOES THE INDIVIDUAL/FAMILY MEMBER WHO IS GETTING THE GIFT OF MINERAL RIGHTS NEED TO REPORT ANYTHING ON THEIR FORM 1040?
A: This would be a question for your accountant or tax professional.
Mineral rights transfer by minor? Asked 05/13/2016
Q: Our father put his mineral rights in his minor grandsons name while going through bankruptcy. His plan was to put the account back in his name after the dust settled from the bankruptcy. Before he had a chance he passed away from a fall. Now the account appears to be stuck in his grandson\'s name until his is 18. Is there any way to put this in the names of his four living children now vs. 12 years from now?
A: If the grandson has a "natural" guardian (i.e. a parent) then it's possible they could be sold on behalf of the grandson to you and your siblings but I'd run that by an attorney to be sure. States are different. Some would even allow a minor to transfer property, but would also allow him to set aside the conveyance once he turned 18 if he wished, which would basically nullify it.

Other states provide that the natural guardian of a minor can transfer a minor's property to someone else only if its value is under a certain amount. Some would require a court-appointed guardian to represent the child's interests. Check with an attorney for all the particulars in your case.

Hope this helps.

The Mineral Hub
Is royalty income taxable? Asked 05/11/2016
Q: Our family received mineral rights from my dad who passed away 7 years ago. We received a bulk check and now we receive checks monthly.Is this money we received taxable ? Is it considered as an inheritance? We live in the state of NJ and the mineral rights are in North Dakota. Thanks\n
A: Yes, royalty income is taxable whether inherited or not, and thus should be reported on your income tax return, but check with your accountant to be sure. The "bulk check" you initially received would also be taxable if it was also a royalty payment.

The company paying you is likely reporting all the income they are paying you to the IRS and to your state (if applicable), and will likely send you a tax form at the beginning of next year showing what they paid you (and will send a copy of that to the IRS as well).

Hope this helps you out (without depressing you).

The Mineral Hub
Leon County, Texas Asked 05/06/2016
Q: What is being paid for OGML lease bonuses in Leon County, Texas?
A: I would suggest reading our "Leasing Tips" article before agreeing to anything. You can find it on our Mineral Hub Articles page.

The Mineral Hub
Mineral Bonus for Midland Co., Texas Asked 05/06/2016
Q: How much are mineral owners receiving for bonus on OGML leases right now?
A: I would suggest reading our "Leasing Tips" article before agreeing to anything. You can find it on our Mineral Hub Articles page.

The Mineral Hub
Going rates of NMA price Asked 05/04/2016
Q: We have an oil lease that I need to respond to. I have 6.66 acres of my own and a relative has 6.66 acres that we will negotiate together, all in the same sec, township & range but the leases are separate. The initial offer is 150/NMA and 3/16 royalty. I would like to negotiate more like 1/5 and 400 NMA. I want a fair offer. What are your thoughts on a fair offer for us?
A: I would suggest reading our "Leasing Tips" article before agreeing to anything. You can find it on our Mineral Hub Articles page.

The Mineral Hub
Going price per acre in Garfield County Ok Asked 05/01/2016
Q: Can you please advise what the going mineral rights price per acre is in Garfield OK - Section 28-22N-5W? Thank you!
A: I used to ask others the same question when it came to valuing my own mineral rights, so I know how confusing it can be to properly value something when you know little about how the marketplace works.

Pricing is very subjective actually, and thus often varies from one buyer to another. In general though, most buyers use similar methods for valuing mineral rights. Basically the more active an area you are in, the more your mineral rights will be worth. You can learn about some of the methods used by buyers to value mineral rights in our "What Are My Mineral Rights Worth?" article, which can be found on the Mineral Hub Articles.

That should provide you with a general method to determine the approximate value of your mineral rights. As I mentioned above, there is no one specific answer since not all buyers will place the same value on your minerals. A more optimistic buyer will value them more highly than someone with a less positive outlook on the future potential.

If you're planning to sell your mineral rights, you can list them for sale on The Mineral Hub's Sell Mineral Rights page, and we will help you find a suitable buyer if that's what you want to do. It's free to list, and we will better be able to serve you this way as we are used to dealing with the professional buyers, and can help you avoid the common pitfalls sellers often encounter when dealing with buyers on their own.

Hope this helps you out.
Selling mineral acres but not surface acres? Asked 04/19/2016
Q: I have an 1/8 undivided interest in 80 acres in Pecos County, Texas. The land has been in the family for 3 generations and I don\'t even know the cousins that have some interest. I have been given an offer to buy the mineral rights, but they are not at all interested in the surface acres. Is there any way to sell both ... an 1/8 interest in the surface as well as the mineral rights? I would rather pass this down to another generation!
A: To sell the surface, contact a real estate agent.
Tax Sale, Previously Deeded Mineral Rights Asked 04/17/2016
Q: If a property is purchased for unpaid property taxes in Texas and the non-producing mineral rights were previously severed by deed, would the tax sale purchase recover the mineral rights or would they remain with who they were previously deeded to? Since the severed mineral rights were non-producing, they were not shown on the property tax roll and were not subject to property tax. Thank you.
A: They would remain with whomever they were previously deeded to in my opinion, assuming they were severed prior to the tax lien being filed.

Hope this helps.
The Mineral Hub
Does the term "mineral rights" include topsoil? Asked 04/16/2016
Q: In Michigan I sold 10 acres to a developer and in the purchase agreement and deed I retained All Mineral Rights but no surface rights for drilling. 60 days later the new owner sold off more than 10,000 cubic yards of the topsoil. I knew topsoil needed to be stripped from the construction site but I thought it should stay on the property. \n It seems everyone wants to skirt around saying topsoil is a mineral and I realize the organic portion is not but everything else is. If you have the time please look at this page put out by M.S.U. http://msue.anr.msu.edu/news/the_shocking_truth_about_topsoil \n I Thank You in advance for your thoughts.\n\n\n\n\n\n
A: Sounds like you reserved the SUB surface mineral rights, which would not include topsoil. Without seeing your actual deed I can't tell for sure but that would be my guess. Subsurface minerals would include oil, gas, and other hydrocarbons but not minerals generally associated with the surface such as sand, gravel, topsoil, etc.

Hope this helps.
The Mineral Hub
Searching for info on my Oklahoma minerals. Asked 04/15/2016
Q: Do not own the property, but I share mineral rights with my sister.\nIts some acreage in Sallisaw, Oklahoma.\nWhere do we begin to even find out if this is prosperous land?!\nDo we need to be in contact with the property owners? Do we need an attorney?\nWe have no idea how to pursue this.\nAnything would be helpful!\nAppreciate it!
A: The Oklahoma Corporation Commission is the oil and gas regulatory body for the state of Oklahoma, and on their website you can find a wealth of information about what's going on in the area where your mineral rights are located. You can search for production, completion reports, pooling orders and applications, and other things that the Commission regulates. You can search their oil and gas database from THIS page.
Mineral rights transfer after father's death? Asked 04/14/2016
Q: My dad has a ND Mineral Right Deed but recently passed away. His mom and brothers are trying to transfer his Mineral Rights into their names. They recently requested a Death Certificate and asked if my dad had a \"Will in Place\" which he doesn\'t. Can they legally transfer them with a Death Certificate? We are trying to protect his Mineral Rights Interest and are afraid that they will be able to successfully transfer with the Death Certificate..
A: If your dad had no will, then the state's laws of intestate succession will determine who gets what, though someone will still need to be appointed as the executor of his estate, and then the estate will still need to be probated in ND in order to transfer the mineral rights to heirs.

The rightful heirs (according to state law if Dad had no will) will be able to eventually transfer the mineral rights into their own names after doing the above.

You would want to look up "intestate succession" laws in ND to see what the state has to say about who inherits what in the event of no will. Usually the spouse and children will have first dibs, followed by parents, siblings etc.

Hope this helps.
The Mineral Hub
Determination of heirship Asked 04/12/2016
Q: My great grandmother died, leaving mineral rights to her children, which are now dead. My grandmother (one of those deceased children) had six children who inherited her share. Four of those children survive. Two, including my mother, are deceased. My uncle and remaining aunts are in the process of filing determination of heirship. My siblings and I were told we, too, need to do that to claim my mothers share. Do we need to hire a lawyer in order to do that or is it a process that three resonably intelligent people can navigate on their own? I know hiring a lawyer is PREFERABLE, but the cost would eat up much of the share that is ours. We wondered if it is POSSIBLE without legal representation? I understand from the lawyer representing my aunts and uncle that there would have to be a petition to the court, notices filed in the newspaper and then a court hearing. We need to do more than the affidavit of heirship, but actual determination of heirship. Any thoughts?
A: It would certainly be "preferable" to hire an attorney to have her estate probated in court, whether she had a will or not. If the estate is not complicated it would cost between $2000 and $3000 in most cases. You stated that your uncle and remaining aunts were in the process of determining their heirship. Perhaps you could all use the same attorney and share the costs since the same mineral rights are involved.

Yes, you can go to court yourself and plead your case as there is no requirement you use an attorney, but an attorney is "preferable" as you noted, because without some study it would not be advisable to probate an estate on your own. Before you decide to go it alone you should verify you can answer the following questions on this page on nolo.com.

If your mother had no will, then the state's laws of "intestate succession" would apply and therefore the state (where the minerals are located) would dictate who gets what, but a probate may still be required in order for you to have clear and marketable title to what you inherited, even though the intestacy laws have dictated what that will be.

Without a will, you'd still need a court to appoint someone (i.e. you) to act as executor of your mother's estate before any business could be transacted with the mineral rights.

Bottom line, if the expense justifies it, have an attorney do the probate. If not, then it's up to you whether to attempt a probate on your own or not.

Hope this helps you out.
Inherited producing mineral rights Asked 04/09/2016
Q: If someone inherits Gas acres that has an existing lease is a new lease negotiated or does the existing lease have to remain in effect?
A: Existing lease will remain in effect until it expires, and the new mineral owner (the heir) will be bound by it until that happens (as will the lessee or its assigns).

The Mineral Hub
Inherited land Asked 03/31/2016
Q: I inherited some land seven years ago. It was thought to be average farm land at the time. Now seven year later a frac sand prospector has offered to buy it at a premium price. Does my cost basis at inheritance, take into account the frac sand premium that is being offered today? In other words, is the cost basis determined as if the land was farm land or as if the land was farm land with the frac sand underneath?
A: Cost basis would be determined by what they were worth when you inherited the land. Check with your accountant on that.
Life Estate Asked 03/25/2016
Q: A person holds a life estate for the duration of their life. Royalty checks are paid in arrears. If the person that held the life estate died in Jan 2016. The last royalty check received was from oil and gas drilled in November of 2015. Should it be expected that the person that held the life estate will still be paid for all royalties up until date of death and payable to their estate?
A: Yes
Bought minerals. Need to find copy of lease. Asked 03/23/2016
Q: I close on my first home tomorrow. I will be given the mineral rights as well. The seller says the mineral rights are already in a lease but won\'t show me the lease or tell me the company that it is leased with. What are my options? How do I find out about the content of this lease, and can it be changed into my name since I will be the owner of the mineral rights?
A: The lease would be filed of record with the county clerk/recorder. You may even be able to look it up online if the county is online. You'd need the lessor's name and/or the legal description of the property to do a search.

The lease won't be changed into your name, but you will be subject to it for as long as it is in force. You would perhaps want to alert the company that you are the new owner of the property, or at least file something of record so that in the event a producing well is drilled they will know who to pay.

The Mineral Hub
Lease Agreement Change Asked 03/22/2016
Q: My original lease was for a total of 97.42 acres which consisted of two separate parcels but were named as one unit on the lease, We started to receive royalty checks and when I questioned as to how many acres they were utilizing I was told that they were using only a small portion 33 acres and that the lager portion of my property had been re-leased by another company. Is this legal and how can they change the lease agreement and not notify me of a change.
A: They can't change the lease agreement, but it's probable (in ND) that the lease would also hold any land outside of the production unit. They could have assigned that portion to the other company. Check with an attorney in ND for a more in-depth explanation.
Wells sold to new company. Who pays me now? Asked 03/17/2016
Q: Hi I was appointed substitute attorney in fact for 5 properties in WV. I had been receiving a royalty check twice, once April 2007 and another in June 2012 which I used to pay the taxes. While checking the status of any future royalty payments from the oil company, they stated that the well was sold to another oil company. How can I find the status of any future royalty payments?\n\nI have the API number for the well. I do not have proof of ownership (deed) or a copy of the lease. I do have tax statements with property description. Thanks
A: Contact the new company/purchaser with any questions. The new company should have been provided the "pay decks" from the old company, so they should have all your info already and they, or their purchaser should continue to pay you any money due. Proof of your ownership would be on file with the county clerk in the county where the mineral rights are located. You may get a "division order" from the new company if there is still production. It will state your decimal interest right on it, and should match the one from the old company.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Canadian County, OK lease offer good? Asked 03/16/2016
Q: Hi I was contacted by an energy company with an oil rights lease offer in section 9 township 11 north range 6 Canadian county oklahoma and would like to know if this is a good offer please as I don\'t know how to find pooling values around me if you can please help me.\nIt is for \n$2100 lease royalty 3/16 for 3 years\nor $1500 lease royalty 1/5 for 3 years\n\n
A: Poolings in that township have ranged from $850 to $1400 over the past six months (at 3/16 royalty), and there have been only two. Based on those, $2100/acre doesn't sound bad these days assuming the other terms are good. Lots of activity in that township these days.

The Oklahoma Corporation Commission is the State regulatory body for oil and gas in Oklahoma. On the OCC website (www.occeweb.com) you can search for drilling permits, poolings, completion reports, as well as current or past production figures for wells near where your mineral rights are located. You'd need to have the legal description handy (Section, Township, Range) in order to narrow your search down to the correct area.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Is my lease offer (with extension) fair? Asked 03/14/2016
Q: I was offered to lease the following:\n$300/acre (88.55 acres total)\n3 Year Term with 2 year Option to Extend -The 2 Year option will be @125% of initial bonus or $375/acre\n1/5th Royalty \nI would receive $26,565 and after 3 years if they decided to extend for an additional 2 years and would receive another $33,206.\nMy question: Does this seem reasonable? If not, do you have any tips for a counter offer?\nThanks.
A: I will tell you that I don't usually agree to additional years unless they offer to pay me DOUBLE the original bonus-per-acre. I usually just suggest they contact me again in three years if they want to extend the lease, and we can talk about it then, at the THEN current prices being offered in the area. Agreeing to bonus amounts five years out is risky (for you).

With 88.55 acres to lease you have some bargaining power I would think. Read our "leasing tips" article on the Mineral Hub Articles page for more ideas on how to negotiate.

Sincerely,

Frederick M. "Mick" Scott
The Mineral Hub
Being sued for 50% royalty due to 1931 deed language. Asked 03/14/2016
Q: I was recently served papers that I am being sued due to being an heir to oil and gas rights on 100+ acres in Pa. I am in Florida. I was able to obtain a copy of the original deed that is in question. The person that owns the land now is stating that the oil and gas rights were terminated with a lease the owner at the time (my ancestors) entered into was no longer effective. This is where the lawsuit comes in, the oil company that currently has the lease has been putting the other 50% of royalties in an escrow account until I was located and the lawsuit is resolved. The current land owner is suing me to get back the 50% of oil and gas rights. This is what the deed from 1931 states:\n\"this conveyance is made subject to the terms, conditions and stipulations of a certain lease entered into by the said William e. huntley with the northern pa. development co., for oil and gas operation and production, and the said William e. huntley expressly reserves for himself and his heirs, one-half of any and all royalties or income or return from any oil or gas which may be produced on or from the premises hereby conveyed.\"\nThis is what the paragraph on the deed says that the person that is suing me is disputing. He is claiming that the 50% oil and gas royalties expired with the lease agreement between William e. Huntley and the Pennsylvania dev. Co. Is there anyone that can shed some light on this please? Does he have a valid argument? Any help will be greatly appreciated. I am a single mom in my final year of nursing school and do not want to spend money on an attorney if he is right in regards to how it is worded.\nThank you,\nHeidi
A: Heidi,

If the "original deed" from 1931 you have reads as you say it does, then it sounds like they are arguing that the "expressly reserved" 1/2 of royalty/income etc. is only good for as long as that old lease the deed refers to was in effect. After that, the mineral owner he sold (apparently) 100% of the actual mineral rights to would get 100% of any FUTURE leases on the property. Not sure I would agree with that however, based on what you quoted me from the deed.

It could also be read that 50% of ALL future income from the property is to be distributed to William's heirs, via the "AND the said William E. Huntley expressly reserves" etc. clause you quoted from the deed. There is apparently no mention of the royalty being reserved from ONLY the lease referred to in the deed. It does refer to the lease, but then states "and, the said William E. Huntley expressly reserves for himself" etc. 1/2 of the royalties etc. from the premises (not the lease) conveyed.

Since the 1931 deed references the income from "a certain lease entered into by William E. Huntley" I could see where they might argue that AFTER that lease expires the clause would no longer be valid and then then-current mineral owner would get 100% of any royalties.

I can also see where YOU (or your attorney) might argue that the lease referred to 50% FOREVER (even on later leases) as a condition for him agreeing to the first lease. If there's any real money involved here I'd suggest running the old deed and the lease (if possible) by an attorney who is familiar with O&G lingo, and one who is licensed to practice in PA.

Hopefully you could just show the lease, and the deed to an attorney and he/she could provide you with a "quick and dirty" opinion of whether or not their argument has any merit or not. Most attorneys will allow you to consult with them for an hour or so for a nominal fee ($200 or less) and some will see you initially for free. Make sure it's an attorney familiar with oil and gas terminology, and preferably one in PA (though of course you'd be visiting via email or on the phone most likely).

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Question about lease offer options? Asked 03/07/2016
Q: We\'ve received an offer for a lease interest, and we need help understanding the options. It is for 0.1722 acres of mineral rights. The offered options are for a three-year term at one of the following: $100 per net mineral acre bonus with a 1/8th royalty provision OR $50 per net mineral acre bonus with a 3/16th royalty provision. I\'m guessing that such a small amount of acreage won\'t net a large sum of money. Can you give an example of how this would be calculated, and a potential dollar amount? Any information to make our decision easier would be greatly appreciated.
A: For such a small acreage I'd ask them for a 1/4 royalty and no bonus. If they'll do that it's probably a better deal for you since 1/4 royalty will pay more over the long run than 3/16 (or 1/8) royalty and a bonus would.

If they won't agree to this I'd just tell them "no thanks" and hope they apply for a forced-pooling later, and then make your election from the pooling. More info on forced-pooling is available in our leasing tips article by the way.

.1722 acres at $100/acre bonus is only $17.22. Not worth messing with. Go for the 1/4 royalty and no bonus if you can.

The Mineral Hub
Tax on suspended funds Asked 03/03/2016
Q: How much taxes will I have to pay on royalties held in suspense . This is in the State of texas
A: Royalty income is taxed as ordinary income in Texas as far as I know, though you may be able to claim the depletion allowance on your tax return when filing. Check with your accountant.

The Mineral Hub
Taxes on sale of inherited mineral rights? Asked 02/24/2016
Q: My sister and I sold our share of inherited mineral rights in 2015. Our mother passed in 2001. Not sure if or how to claim on income taxes. I have been told I would need to know the base price of these rights in 2001. Could not get any information from county tax appraiser. Do I owe anything since it was inherited?
A: Check with an accountant or attorney. My opinion would be no tax is due, however I am not an accountant so would advise you check with one for a more certain answer.

Hope this helps you out!
Frederick M. Scott CMM, RPL
The Mineral Hub
Sale/Assignment of Lease to Another Company Asked 02/23/2016
Q: Our lease has been sold from one O&G company to another who is planning to drill in our area. This new company is trying to modify the terms of our lease to be less favorable to us. We still had 3 years left on the original lease. They are basically stating that if we don\'t agree to the new terms, they will drill without us and we will get nothing. Is this legal?
A: They, and you, are subject to the original lease until it expires. They cannot just "modify" it without your permission unless the original lease gives them that authority (read it).

Hope this helps you out!
Frederick M. Scott CMM, RPL
The Mineral Hub
Interest on late royalties in Oklahoma Asked 02/21/2016
Q: We own minerals in Love County, OK in a section where a well was drilled and completed in June, 2015. First sales were the middle of June, 2015. We still have no DO , but have been told by XTO that it will be coming soon. My question is about interest on the royalty payments. I read that OK allows 12% interest on late royalty payments. Can you please explain how that works? Is the interest paid once? On all that sales since the beginning of production or is it done incrementally? Thanks in advance .
A: When they send you the first check, the interest SHOULD (but probably won't) be included. You may have to "remind" them of the Oklahoma statute requiring interest on late payments. The statute is included in the Production Revenue Standards Act, which can be found in Title 52 of the Oklahoma statutes.

§52-570.10 (D) states that:
D. 1. Except as otherwise provided in paragraph 2 of this subsection, where proceeds from the sale of oil or gas production or some portion of such proceeds are not paid prior to the end of the applicable time periods provided in this section, that portion not timely paid shall earn interest at the rate of twelve percent (12%) per annum to be compounded annually, calculated from the end of the month in which such production is sold until the day paid.

2. a. Where such proceeds are not paid because the title thereto is not marketable, such proceeds shall earn interest at the rate of six percent (6%) per annum to be compounded annually, calculated from the end of the month in which such production was sold until such time as the title to such interest becomes marketable. Marketability of title shall be determined in accordance with the then current title examination standards of the Oklahoma Bar Association.
Natural gas use rights? Asked 02/19/2016
Q: Years ago when the mineral rights to our property were sold by a previous property owner, the entity who bought the rights, granted gas usage rights tied to the original dwelling forever. How can this be proven?
A: Any rights granted to the dwelling (i.e. use gas in dwelling forever etc.) by the entity would be included in the deed when the property was sold, and the deed would be filed of record with the county clerk in the county where the property is. Could be the rights were granted only to the THEN current tenant. Whether that extended to future owners or not should also be in the deed.

Hope this helps you out!
Frederick M. Scott CMM, RPL
The Mineral Hub
Mississippi lease offer fairness? Asked 02/18/2016
Q: I live in the State of Nevada and I would like to hire someone in Mississippi to advise me on the fairness of the offer made by the landmen I have received offers from. Are there services like this available? \n
A: You could hire a landman in the area where the minerals are. You could also probably find a local attorney in MS who could help make sure you got a good lease deal. Perhaps the trust department of a local bank (in the area where the minerals are) could also advise you as to the going rate for lease bonus amounts.

Hope this helps you out!
Frederick M. Scott CMM, RPL
The Mineral Hub
Texas Oil and Gas Lease vs. Mineral Deed Asked 02/16/2016
Q: In Texas, an oil and gas lease is not a\nlease but a mineral deed, is this correct or incorrect?
A: Two different animals. A lease is not a mineral deed; however you need to read the BODY of the document to determine which it is, not just the heading. A deed would have language such as "convey, sell" etc. whereas a lease would not.

Some people would say that a lease is similar to a deed, in that it conveys to the lessee the exclusive right to drill for oil and gas for a period of time, but that still does not make it a deed because you still own the minerals. You have just given them permission to drill them for you. Once the lease expires you still own the mineral rights. When you sign a deed, the minerals are no longer yours.

Hope this helps you out!
Frederick M. Scott CMM, RPL
The Mineral Hub
Will all acreage in unit remain leased? Asked 02/15/2016
Q: The well is being drilled now on the total 640 parcel.\nWe leased 68 acres, 5 years ago to Chesapeake. \nAccording to the map they are going to use only 9 of our \nacres for underground drilling.\nWill they have to resign the existing 59 acres? Would\nour 68 get included in the total for royalties or just the 9? \nI don\'t understand how this all works.\nThank you.
A: If you leased all 68 acres, and all 68 are included in the proposed drilling and spacing unit Chesapeake has applied for, then all 68 will remain leased until the lease expires.

Hope this helps you out!
Frederick M. Scott CMM, RPL
The Mineral Hub
Mineral rights inherited. How to claim? Asked 02/08/2016
Q: Recently, my two sisters and I (in Louisiana) were contacted by a leasing company (in Dallas) to buy a small portion of mineral rights, inherited from our great aunt, in Weld Co, CO. We did not even know we owned them!! We do NOT want to sell and am wondering how we go about claiming them. Noble Energy is very active in that area. Should I contact them?? \n
A: To actually "own" the inherited rights, you will need to have your aunt's estate probated in a Colorado court if you have not done so already. Though a company may lease them without a probate, if there is ever any production you will need to have the estate probated prior to them paying any royalties.

As far as "claiming them" goes, same answer there. In order to have legal title to them you'll need to have a judge sign off on your inheritance, which is what a probate does.

Hope this helps you out!
Frederick M. Scott CMM, RPL
The Mineral Hub
Taxes on mineral rights I sold? Asked 02/05/2016
Q: in 2015 I sold my part in mineral rights that I received when my mother died.
A: Speak with your accountant on that.

Hope this helps you out!
Frederick M. Scott CMM, RPL
The Mineral Hub
Woodward County, Oklahoma lease offer? Asked 02/05/2016
Q: Just notified of small amount of Mineral rights in the Woodward County, Oklahoma area. I know nothing about this sort of thing. I was sent a lease agreement by a landman and was just wondering how you tell if you are getting a good price on lease.\n\nThanks for any help!\n\nSection 34 Township 21 North Range19 - West, Woodward County Oklahoma
A: Read our leasing tips article. You can find it on the Mineral Hub Articles page.

Hope this helps you out!
Frederick M. Scott CMM, RPL
The Mineral Hub
Valuation of mineral rights from 2001 Asked 02/05/2016
Q: My mother sold mineral rights this year. She inherited these with a probated will in 2007. The death occurred in 2001, but the will was not probated until 2007. So I have two questions. How do we get a valuation report? Or can we use the value from a 2007 lease?
A: You would need to value them from 2001. A landman or attorney could help you value them if they are familiar with the area.

Hope this helps you out!
Frederick M. Scott CMM, RPL
The Mineral Hub
Woodward county lease offer 9-21n-18w Asked 02/04/2016
Q: I have received an offer for $500/nma 3 yr term and 3/16 royalty. Is this going rate in Woodward Co, Ok? My mother has 16.87 nma
A: That's not a bad offer in my opinion. You might check out our leasing tips article before leasing. You can find it on the Mineral Hub Articles page.

Hope this helps you out!
Frederick M. Scott CMM, RPL
The Mineral Hub
Royalties in suspense Asked 02/02/2016
Q: My siblings and I owned 2/3 mineral rights for our family property for a number of years now. With the passing of my Mom last May (2015), we have received the other 1/3 according to her will.\n\nMost of the land on the \"homeplace\" was originally leased by Whiting Petroleum in 2003. Several deep wells were dug and this land has had production ever since. Apparently the shallower depths were subleased or turned over to another operating company who drilled a shallower well (9,000) which has been producing since June, 2015. However we have not seen any royalty papers or even the division orders yet.\n\nOur lease has a clause that says payments are to be made within 90 days from sale of initial production, and 30 days thereafter. Payments in default of this are subject to 1 1/2 % interest payable to the royalty owner.\n\nIn talking to the landman, he is saying that the fund are in suspense due to title issues . Apparently , Whiting has sold their interest to another company. He is implying that since the funds are in suspense, they are not subject to the fee. \n\nMy question is , since we have complied and given them everything they have asked for, do they have the \"right \" to hold our royalties in suspense as well? There is also a clause in our lease agreement that says if we use litigation , we are entitled to reimbursement for legal and court costs.
A: Likely they want to see your mom's estate/will probated before they will release the suspense funds since technically, her estate still owns them, not you, even though you are likely the heirs she intended. They just want a judge to sign off on your heirship basically, and that's what a probate does.

The "litigation" clause you referenced likely states that whoever WINS will be entitled to reimbursement of legal costs, so tread lightly there and don't sue them unless you are sure you can win.

If the title is not "marketable" (i.e. not clean and in your names legally yet) then yes, they can hold the royalty in suspense until it's cleared up. Your state may have a statutory interest clause relating to funds in suspense, meaning that interest MAY be due on suspended funds once they are released, even if they were held due to a title issue. Oklahoma is an example of a state that requires interest be paid on suspended funds, no matter the reason for the suspense.

Hope this helps you out!
Frederick M. Scott CMM, RPL
The Mineral Hub
Mineral Rights for Sale Asked 02/01/2016
Q: Want to sell-----have joint ownership with my sister and we want to sell all our mineral interests in Grady County. What do we need to do------get a lawyer/attorney? appraiser? land broker? Do not know anyone in Grady County-----can someone suggest names? Would like to know reputable people to contact
A: If you want to sell, the best thing you can do in my opinion is list them for sale on the Mineral Hub. You can have your attorney or whoever look over any offers we find for you. We are very transparent here, and will help ensure you get a good deal from a reputable buyer. Let us find you some offers to consider instead of trying to do it all on your own. We know who the reputable buyers are, and who not to deal with at all.

Hope this helps.
Bonus check to extend lease never cashed, but I got 1099. Asked 02/01/2016
Q: In March 2015 i was sent a letter for an option to extend my lease as well as a check for the bonus payment. I disagreed with the amount that was offered so i never deposited the check or signed the extension. I just received a 1099- misc tax form from the company stating i received the amount of the check. I am filing my taxes now and i don\'t want the IRS coming back at me and telling me that i received additional income. I emailed the company since there is no phone number on any paperwork with no response yet.
A: I'm not an accountant, but if you don't claim it and they told the IRS they paid you (reflected in the 1099) you may be questioned about it. Was the check for the amount specified in the lease extension you agreed to? f so, then you should have cashed it. If not, then you should have at least contacted the company involved to get it corrected rather than just ignoring it. These things don't just "go away" and the IRS never goes away.

If it were me I'd also check in the county courthouse where the mineral rights are located and see whether they filed the extension of your lease or not.

Hope this helps.
Sue company for not paying additional heirs? Asked 01/30/2016
Q: Can I sue company for paying only one heir when documents were provided of additional heirs(siblings ) to mother\'s property in Lincoln Parish,Louisiana. She didn\'t have a Will\n
A: You can sue anyone for anything of course, but it helps if you actually have a case that can be won. Without a strong/valid argument, you could just end up wasting a lot of your money. I hope that "suing" them wasn't the first thing that came to your mind when you felt they weren't paying everyone. I will assume you tried to contact them and work it out amicably first.

In my experience, companies want to pay the correct people in the correct amounts so if you have valid documentation showing they should be paying more than just one person I would think they would be happy to do so.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
No bonus on 2 year extension? Asked 01/27/2016
Q: I leased my 50 acres with 25% mineral rights on August 28, 2012 for a 3 year term for $450 cash bonus an acre (12.5 net min acres). I am pooled with my neighbors on an 276 acre tract. The operator has a 2 year extension which he can re-lease us for but the contract says he has to pay me another $450 an acre. Instead of the cash bonus, he sent me a division order to start paying royalties. My question is does he still have to pay the $450 to extend the primary another 2 years? Also, the operator has bought the land behind me (105 acres) that the well sits on and added it to the pool making it 384 acres. Now my division of interest is .0061 or 3.25% at 3/16. Does this all seem legit? Do you think I should just sign the division order and send it in? I think my neighbors already have.
A: It appears they probably drilled a producing well during the initial primary term and thus the extension option was never exercised. If however, operations for the well were commenced AFTER the initial primary term expired then yes, they should have extended the lease and paid you the additional bonus. I would assume the well was commenced prior to that date though since you didn't receive the additional bonus. You can always ask them when the well was commenced, or check with the state agency that regulates oil and gas in your state.

As for the 105 acres, if the State allowed them to add that purchased acreage to the existing drilling and spacing unit, thus diluting your interest, then there's really not much you can do about it absent language in your lease to the contrary.

If the well were commenced prior to the initial primary term expiring, I would check the division order to make sure my interest was correctly figured, then sign and return the division order AFTER reading our article on "Division Order Antics By Oil Companies" which can be found HERE. The article deals with Oklahoma division orders, but much of it would be applicable in other states as well.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Money is suspense fund. Asked 01/27/2016
Q: Can I expect the operating company of our producing oil well to tell me how much money is in the suspense fund? We will need to find the deed and probate 3 wills to prove our heir ship to our previously leased mineral rights and will be needing to use those funds to make all this happen.\n\nThanks
A: They may tell you if you ask. I don't see why they wouldn't tell you once they've verified that you are the rightful heirs. I doubt they'll release the funds until their title requirements are met though. The good news is that in several states they will have to pay interest on any monies they've placed in suspense. Check your state's laws on that.

The Mineral Hub
FMV of mineral interest inherited in 2007. Asked 01/20/2016
Q: How do we go about getting the FMV of mineral rights that were inherited in 2007 and sold in 2014. I have called several people in the Grady county Ok, but have run up against a dead wall, I have received royalty checks over the years. Thank you for you help.\n
A: An accountant should be able to help you with valuation. If not, you could hire a landman who is familiar with the area to do an appraisal of their value in 2007. If you were receiving royalty checks back then it should be fairly easy for him/her to determine value.

The Mineral Hub
Best guess on OCC pooling? Asked 01/19/2016
Q: I recently received a letter from OEA stating they are requesting to drill a well on section 14-18N-5W Kingfisher County. They have submitted to OCC drilling request, wavier of consent, and Pooling order. I have mineral rights on other nearby sections but was unaware of any on section 14; I suspect they are part of an inheritance as were the other sections. What I am taking as a lease agreement doesn’t mention term limit. Is there an understood time if not stated? Also, what can I expect OCC to provide (net interest, royalty) from the Pooling order? Not sure if one of the “alternatives” in the lease is better than what OCC will judge on in the Pooling order.\nThanks…\n\n
A: The "primary term" of an oil and gas lease is stated on the lease. It's usually three years. If a producing well is drilled within that time then the lease is extended automatically "for as long thereafter as oil or gas is produced from the leased premises".

Pooling orders are usually indicative of the average lease bonus and royalty that was paid in the section or tract being force-pooled. Therefore the choices will often be similar to those you were offered to lease for. The pooling order is also good for only one year at most however (unless extended and another bonus is paid) so some people prefer to just be force-pooled for that reason alone. I would rather lease if possible however, since you have more control over the terms in a lease than you would if you were force-pooled.

You might want to read our "Leasing Tips" article on the Mineral Hub for more info on leasing and forced-pooling. You can find it HERE

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Projection in Western PA for 2016 Asked 01/18/2016
Q: My mother recently passed away and her will stated that her estate was to be split among the children. Mineral rights have been leased but no drilling has occurred yet. The property is in Western PA. Is there a projected increase in value of mineral rights for 2016? To sell or not to sell is the question.
A: No one can predict with any accuracy what the value of mineral rights will be over a period as short as a year. A general "direction" can be guessed correctly sometimes, but even educated guesses are often wrong, as the "calculus" is very complex as there are a lot of variables than can affect prices.

That said, oil is at its lowest level in years so I would assume it's got more room to go up than down and thus would be reflected in prices for mineral rights as well as prices (hopefully) rise this year. I remember $12 oil in the not-too-distant past as well however, so it could still go down.

If you want to sell this year my suggestion would be to just get the best price available currently. Even if prices go up, you'll know you did the best you could to obtain the highest price available.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Can Mom transfer minerals without an attorney? Asked 01/17/2016
Q: My mom Inherited a check she receives from an oil company. She would like to transfer that to my brother and I. Do we absolutely have to involve an attorney to have that done? Also she is behind on paying the taxes by $1300 will she be able to transfer the rights or does she have to get caught up first?
A: You don't have to involve an attorney, She could draft the conveyance herself technically. If there is an actual tax lien filed of record on the property then it will need to be paid off before the property can be sold. If no lien has been filed of record yet then she can sell them but the taxes would still need to be paid.

Hope this helps.

The Mineral Hub
Agree to Leasing Mineral Rights? Asked 01/15/2016
Q: I\'ve been contacted by a few energy companies with offers to Lease my Mineral Rights? Is it better to agree to one of their offers or is it best not to sign at all? What happens if I don\'t agree to any of their offers and I don\'t sign?
A: In some states if you don't sign you will be forced into the unit anyway by the state, at terms dictated to be "fair" by the state. In others, such as Texas, if you don't lease you could be left out of the unit altogether unless your mineral rights are included in the actual tract the rig will be located on.

My opinion is it's better to come to terms and lease if you can. Leasing allows you to collect a signing bonus in most cases, in addition to any royalties you may later receive if a producing well is drilled.

You should read our leasing tips article before proceeding. You can find it on our Mineral Hub Articles page.

Frederick M. "Mick" Scott
The Mineral Hub
Mineral Rights Asked 01/11/2016
Q: I was wanting to know if any activity was happening @ \nSection 6, Township 4 North, Range 31 \nWest, Sebastian County, Arkansas. Turns out I saw his name \non the internet a few years back about a request integrating\n unleashed mineral rights, \n\n
A: Don't know much about this area. Sorry. You might check some of the online forums available for mineral owners in your county.

The Mineral Hub
Lease Expired - Do I need a Release? Asked 01/07/2016
Q: The lease I signed for Columbia County, AR has expired. What happens/should happen now?
A: You can ask them to file a release if you like, but others looking to lease in the area will probably see the date on your lease and figure out that it's expired.
Buying/valuing father's mineral rights in Grimes County, TX Asked 01/05/2016
Q: I want to buy my father\'s mineral rights for fair market value. How and where do I start? And do I need an attorney for this or can I do this myself?\nI have information on the mineral rights like all the tax records and information on all the mineral rights my father owns from the county clerks office. But now I\'m not sure what my next step is. Help,\nThanks.
A: As to what they're worth; if they are producing income each month then I'd multiply that income by between 36 and 60 to arrive at an APPROXIMATION of their value. If not producing, then use a 2X multiple of any lease bonuses paid (per acre) in the area within the last year or so, the more current the better.

Both of the above are only approximations, and are only applicable in "active" areas where leasing and production is happening. To arrive at "actual" value you'd have to put them on the marketplace in front of some buyers, though that would of course defeat your purpose of buying them yourself.

You could also search for any "comparable" sales in the area of other mineral rights and use that as your price basis.

Once you have a price your father is happy with, you can hire an attorney to draw up the deed after explaining to him/her what you are trying to do. Technically you can draw up the deed yourself, but I'd advise having an attorney do it anyway. It needs to be done correctly no matter who drafts it.

Hope this helps!

The Mineral Hub
Can I stop drilling with only 50% of the mineral rights? Asked 01/05/2016
Q: A friend is contemplating buying a piece of land (Texas) where 50% of the mineral rights will convey with the purchase. \nThough there has not been any drilling in that area, what happens if the other 50% owner of the mineral rights wants to drill and my friend does not?
A: If your friend's mineral rights are included in the same drilling and spacing unit as the other 50% who DOES want the drilling to proceed, then it's unlikely he'll be able to stop it, as it would not be fair to deprive the other owner of his right to drill and have his mineral rights produced.

The Mineral Hub
Is there drilling in 11-3N-6W of Grady County, OK? Asked 01/04/2016
Q: How do we know if they are drilling on this section and if there is any oil or gas producing there?
A: You ask us, and we will tell you that:

1. No current well in that section.

2. Mack Oil Company drilled a "dry hole" in the SW/4 of the section way back in 1959. It was plugged and abandoned later.

3. No current permit for any new well in Section 11, but there is activity in the area so that could change once oil prices improve.

To "keep tabs" on what's going on in this section you can always visit the Oklahoma Corporation Commission website. The Oklahoma Corporation Commission is the oil and gas regulatory body for the state of Oklahoma, and on their website you can find a wealth of information about what's going on in the area where your mineral rights are located. You can search for production, completion reports, pooling orders and applications, and other things that the Commission regulates. You can search their oil and gas database from THIS page.

Hope this helps you out!
The Mineral Hub
How do I find mineral rights I may own? Asked 01/03/2016
Q: how do i find out if any of my family has or had land on which received mineral or oil rights and if i am entitled to anything
A: Read the article on same on our Mineral Hub Articles page. It explains how to search for mineral rights under your land.

The Mineral Hub
How do I find out how many wells I own and where? Asked 01/03/2016
Q: how do i find out how many wells i own and where they are located
A: If you don't know, then you probably don't own any, since you would be getting royalty checks if you owned producing mineral rights.

The Mineral Hub
How many mineral owners exist in the US? Asked 12/29/2015
Q: Every article and blog has a different number, or assessment, on how many mineral owners exist in the US. Is there any way to find out what the number is? Do courthouses know?\nSome have blogged about the number being tens of thousands of mineral owners. Others say the majority of mineral owners are oil and gas companies, and therefore only a couple thousand. And then again, there have been articles of 20+ million mineral owners in the US. This question has become a curiosity and something that has been bugging me and probably a lot of others. Any direction and/or help to solve this mystery is greatly appreciated. And, maybe there is no way of knowing.\n\nThank you in advance for your time!
A: You can contact the National Association of Royalty Owners in Tulsa, Oklahoma. They can probably give you a number. I would estimate that there are about 5 million private citizens who own mineral rights in the US.

The Mineral Hub
How do I transfer my mineral rights over to my daughter? Asked 12/25/2015
Q: I have mineral rights on property in Richland, Montana. \n\nI would like to transfer these rights to my daughter. There are about 13 other family members who share these mineral rights as well. A family member is managing them. There is talk of creating a LLC for this property. \n\nI own 13.541 net mineral acres on a 3 acre tract. Petro Hunt did not renew their previous lease that expired in 2012. \n\nThank you very much for any information you can provide. \n
A: Have an attorney prepare a deed after consulting with said attorney so he/she knows what you are trying to accomplish.

The Mineral Hub
Need map of section, townships, ranges in Oklahoma? Asked 12/21/2015
Q: Where can I obtain a map that will have the id number of each section with in Kingfisher county?
A: I'll bet the county clerk's office would have one you could at least take a picture of. Otherwise I'm sure there's a business somewhere that deals in these sorts of maps. Perhaps a genealogy group could help out as well. There are also pay services that also provide maps online, but they cost thousands of dollars per year, and mapping is only part of what they offer. You might also see if Google Earth has an overlay you can use on their maps or something.

Hope this helps.
How to get proof of ownership? Asked 12/19/2015
Q: Recently on the State Treasurers unclaimed property My Dads name was there . We have no documentation to prove ownership of mineral rights ? Thanks
A: If your dad owned mineral rights there would be a record of it in the county clerk's office in the county where the mineral rights were located. If the cost is warranted you could hire someone to do a search for you. Otherwise you could visit in person or perhaps do the search online. If he is deceased you will simply need to prove that you are his rightful heir in order to claim.

Hope this helps!
How can I get the Mineral Rights on my family's property ? Asked 12/16/2015
Q: How can I get the Mineral Rights on my families property ?
A: Contact the mineral owner and offer to buy them. If you don't know who that is, you could check the county clerk's records in the county where the property is located. You may have to search back a while in the records to the point where they were severed from the land.

The Mineral Hub
Parents Selling Minerals Child Inherited? Asked 12/09/2015
Q: Can the parents of a minor child sell the mineral interest inherited by their child?
A: A minor can perhaps inherit, but certainly cannot legally manage inherited property in most cases, especially if the sums or value thereof is more than just a few dollars, so in most states a guardian would be appointed to manage the property until the child turns 18, at which point the child could sell the property if he or she wished. There may be other options, such as placing the property into a trust for the benefit of the child until adulthood.

I wouldn't think as parents you could sell your child's inherited mineral rights unless you were given the authority to do so by a judge. Check with an attorney in the state where the mineral rights are located that's well-versed in these matters.

Hope this helps.
The Mineral Hub
Transferring mineral rights to heirs, with no will? Asked 12/08/2015
Q: My mother in law recently passed away and left no will. She had Mineral Rights to several parcels in Duchesne County, UT. How do we get the rights transferred into my father in law\'s name? Do we need to have a lawyer handle this? We currently have an Affidavit of Heirship in process, what will this do?\n\nThank you for your help!\nJW
A: Since your mother-in-law had no will, the state's "intestacy laws" will determine who gets what. You can probably "Google" this, but in most cases the minerals would be split between her husband (if living) and her children (if any). In some states the spouse would get a larger percentage (i.e 1/2) with the remaining half split among any children. If no living spouse or children, then other blood heirs would be next in line likely. You'd need to check Utah-specific intestacy laws as they vary from state-to-state.

An affidavit of heirship may allow the heirs to lease the mineral rights, but if a producing well is ever drilled the heirs will likely need to have her estate probated, which will have the effect of a judge "signing off" on the heirship. Again, with no will, intestacy laws would apply, but an oil company may still require a probate before paying royalty payments to heirs.

As you anticipated, I would suggest it would be a good idea to run all this by an attorney in Utah familiar with such things and see if he/she thinks a probate at this time would be cost-efficient or if perhaps the affidavit you spoke of would be sufficient for now.

Hope this helps you out.
The Mineral Hub
Does Duhig Rule apply to royalty, bonus, and rentals? Asked 12/07/2015
Q: Does the DUHIG rule apply to Royalty, Bonuses, and rentals? What do the Mineral owner and Royalty owners own?
A: Duhig is applicable (in states that have adopted it) in cases of over conveyance of mineral rights, so would not apply directly to royalty payments, bonus payments, and rental payments except that payments of same might be reduced due to the effect of retaining less mineral rights than you thought after a sale in which the Duhig rule was applicable.

Please click the "Mineral Hub Articles" link on the left side of our website and then scroll down to our article on "Understanding the Duhig Rule". If you still have questions after that feel free to ask.

The Mineral Hub
Medicaid mineral rights question... Asked 12/07/2015
Q: Can Indiana Medicaid take away gas and oil rights in Oklahoma from an elderly person on Medicaid in nursing home when they die?
A: It is sometimes required that a recipient of Medicaid "spend down" a portion of their assets in order to be approved for Medicaid, however we are not attorneys nor Medicaid advisers so our advice would be to check with an attorney in Indiana who is familiar with Medicaid income/asset requirements for a more detailed answer to your question.

The Mineral Hub
Company wants to buy my mineral rights. Asked 12/02/2015
Q: I was recently contacted by a company in Oklahoma. They were offering to buy my NMI at a \nrate of $4000/NMI. This is on a producing tract of land that was recently leased and is getting ready to be drilled (I think). I found the permit to drill on the OCC website.) Should I accept the offer? Is this company legitimate? Since they\nhave an intent to drill, is that a good thing that means better\nmoney in the future? Any help is much appreciated!
A: They may be a legitimate company, but I would be wary of accepting an offer that came out-of-the-blue like that. There is a reason they contacted you and made the offer, and they likely know much more than you do about the business.

We suggest people that are interested in selling simply list their mineral rights for sale on our website rather than dealing with professionals who contact them with unsolicited offers. If you are not in the business there is a chance you will be taken advantage of on price if you are not careful.

There are articles on our website dealing with how buyers value mineral rights they are seeking to purchase. Check out the Mineral Rights Articles page. You will find some helpful information there I believe.

If you decide to list them for sale with us for three weeks we'd be happy to help value them and find a legitimate buyer for you.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Purchase of Mineral Rights in Grady County, OK Asked 11/30/2015
Q: We received an solicited letter from a company telling us that we have inherited a little over 2 acre mineral rights in Grady County, OK. They are offering $2,000 per acre. Is that a reasonable amount for that area? Thank you.
A: Grady County is a big area. Prices vary throughout the county. I would read our "oil and gas leasing tips" article by clicking on the Mineral Hub Articles page of our website before signing your lease. It explains a lot that you may not know.

If the offer was a purchase offer, there are also articles on that same page you should read.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Signed oil lease. What now? Asked 11/24/2015
Q: My father passed away in March 2013 and about 3 months after that we (my siblings and I) were contacted by this person trying to lease the mineral interest for 1.31065739 net mineral acres. They paid us a one time payment for a 5 year lease. It was stated that the lease provided us with a 3/16 royalty. I have not had any dealings with this and frankly didn\'t even know about the land until my father passed away. What exactly does this mean and how would we know if we were supposed to receive a royalty check? \n\nI would greatly appreciate your input.
A: If a producing well is drilled within five years (the lease's primary term) the lessor or lessors (you kids) will be entitled to your share of the stated royalty percentage (3/16) as long as you can show that you have "marketable title" to the mineral rights. The company may ask that your dad's estate be probated (assuming you inherited from him) prior to them paying you any royalties to ensure that you have marketable title. Until they are satisfied that you have legal title to the mineral rights they leased, they could place any royalty payments due you into what's called a "suspense account"; where they will remain until you provide all the required paperwork to them showing you have legal title.

Why would they lease you without jumping through a bunch of hoops, but then insist on making you prove your ownership to them if they end up drilling a well? The answer is there is more risk to them once a well is drilled and they want to make sure they are paying all the legal owners correctly, and that there will be no arguments as to who owns what. A probate in most cases will satisfy them as to your heirship.

When they are leasing it is only a one-time bonus payment so a lot of companies will lease you even if you don't exactly have marketable title, as long as they are confident that you could have marketable title if some curative title work were done. In the case of heirs of a decedent being leased, the "curative" would likely be in the form of a "final decree and determination of heirship" being filed as the result of a probate.

Basically the probate of an estate is just the legal process of a judge signing off on an heirs interest. You would want an attorney in the state where the minerals are located to do the probate, and the probate would have to be in that state as well in most cases.

There are exceptions as some states don't require probates for heirs to have marketable title, but you really don't need to be in a hurry to do a probate (as far as royalties are concerned) unless a producing well is completed. If one is the oil company will notify you by mail in most cases, or you can often check online with the state's regulatory body for oil and gas for completion reports of new wells. You could also simply call the people who leased you and see if they could tell you anything.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Purchase of leased minerals Asked 11/20/2015
Q: If you lease a third parties minerals then subsequently buy out their mineral interest that the lease is automatically inferred to be released or not in effect?
A: Lease will still be in effect until it expires no matter who owns the minerals.

The Mineral Hub
Modification of an Expired Lease Asked 11/05/2015 Asked 11/19/2015
Q: In response to the response to this question, the lease that my grandparents signed is expired. It clearly states that a producing well paying royalties to the lessor must be drilled within 24 months. No well paying royalties to the lessor was ever drilled. The well that was drilled never paid royalties to us. And, since my grandparents lived in the same house for 65 years and didn\'t pass away until 11 years after the lease was signed, the BS about not being able to locate who should be paid royalties won\'t fish in this pond.
A: If the lease REQUIRED a "producing well paying royalties to the lessor" be drilled within 24 months and one was, but they were never paid, then I would expect you'd have a good argument for the lease being invalidated by its own terms. Most leases don't "require" drilling during the primary term, but all would require the lessor be paid if one was drilled. You'd need to check with an attorney to determine your next step as I have not seen the actual lease, nor am I an attorney.

Frederick M. Scott
The Mineral Hub
Offer to buy mineral rights, Asked 11/16/2015
Q: A company offered to pay 2,000 per mineral acre for 640 acres and then a lease for 3/16 royalties. They said they weren\'t sure of the acreage. That they had to file the title to be sure. Does this mean if I own 640 acres that I will get a check for 1,280,000.00 or what would it compute out to be. They want me to sign a W9 also.
A: If you own 640 acres, then yes, that's what you'd receive.
NPRI able to see copy of oil and gas lease? Asked 11/12/2015
Q: Mineral Owner has entered into a new lease with lessee. Who has the responsibility to provide the NPRI with a copy of the lease. The Lessee has advised the NPRI owner that they are not allowed to release a copy to the NPRI owner and requested the NPRI owner contact the lessor. Does the Lessee have the right to withhold a copy of the lease from the NPRI owner?
A: You can obtain a copy of the lease (or at least a memorandum of lease) from the county clerk's office in the county where the mineral rights are located. This is public record.

An NPRI owner doesn't necessarily have a right to look at the actual lease however, so if it's not filed of record you may be out of luck on that and have to settle for the memorandum of lease (which likely will be filed of record even if the lease itself is not.) Check with the lessor as well as the oil company suggested.

The Mineral Hub
Royalty payments missed because of errors in pooling orders Asked 11/10/2015
Q: My family owns mineral interests in Coal County, Oklahoma which we were contacted by a landman during the pre-pooling process to correct errors in ownership. We had inherited the interests 4 years earlier from our mother. We started the process to establish heirship of record but somehow that never was finished by the landman years ago. \nNow We\'ve been missing the payments from that tract, and it has a producing well from BP for years.\nDoes BP have to make those royalty payments into a holding account that should be available to us now ? How would I find the amount of payments missed? Or identify the current royalty payments I should be getting? Shouldn\'t we have received division orders regarding the drilling beforehand ? Any suggestions on the steps to unravel this mistake and missed payments are very appreciated !\nThanks for all the help your sites provided !
A: Their is a statute of limitation on late royalty payments of (I think) five years unless you can show that a reasonable person would not have been aware they were due. The oil company probably (or should have) put any payments they couldn't match with owners into a "suspense account" at their company, waiting for someone to claim it.

If not claimed after several years, most companies will simply turn the money over to the state to hold until the owner claims it. You can search missingmoney.com for any names (i.e. your mother's name) you want and if the state has money that was turned over to it by an oil company under someone's name is likely will show up there.

Hope this helps you out.
The Mineral Hub
Modification of an Expired Lease Asked 11/05/2015
Q: I signed a Modification of Oil and Gas Lease concerning a lease my great-grandparents had signed in 1979. The oil company said they needed to amend the lease for pooling and they had purchased the lease from Co. A (who my grand-parents had leased to). Turns out Co. B had purchased the lease in 1980 and drilled a well. Then Co. C purchased the lease in 2000 and has operated the well since. The thing is that we were never paid royalties off of the well drilled in 1980 and therefore the lease expired in Jan. of 1981.\nSo is the Modification of this lease that I signed valid, since the lease had expired 33 years before?
A: If lease has been producing since 1980 as you say, then lease has not expired. It will remain valid until production from the leased premises ceases.

If no royalties were ever paid as you say, then likely there is money in a "suspense account" somewhere waiting to be claimed by you, or the recipient's rightful heirs. If not still held by the operator in suspense, then likely was turned over to the State years ago and could be claimed from them (see www.missingmoney.com).

Hope this helps you out!
The Mineral Hub
Lease filed before bonus paid? Asked 11/05/2015
Q: Is it legal in Oklahoma to file original leases in the records BEFORE the bonus money is paid? My leases were filed and I have not received the bonus money yet.
A: It's legal probably, but not very nice, and probably not a valid lease until the bonus (if any) is paid. I used to be a landman, and we never filed our leases until the bonus was received by the lessor. I would be upset if someone filed a lease before I was paid.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Client buying leased mineral rights... Asked 11/04/2015
Q: hello I have a client interested in buying a piece of property that already has the mineral rights leased but wants to know what kind of income could be generated from that. Does a new lease need to be agreed upon where he could collect from that or is the only available in one based off of royalties?
A: If your client buys mineral rights that are already leased, then he/she will be subject to that lease until it expires. Any lease bonus was already paid to the lessor who signed the lease. The only way a new lease could be negotiated is if the current one expires. If the lease eventually has a well on it, then your client would benefit from any royalty payments derived from the current lease.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Evaluate Mississippi lease offer? Asked 11/04/2015
Q: We received a lease offer for minerals rights we own in the Tuscaloosa Marine Shale area in Miss. How /Where do we find out if the offer is good, low, etc?
A: Google is your friend here. I'm not familiar with this area so cannot tell you what the going rate is. You could also ask some of the local banks in the area, some of whom may have clients who own mineral rights that they manage for them. You could also contact the county clerk in the county where the mineral rights are located. Though it is NOT their job to do so, if you ask nicely, and they know, they may be able to at least tell you if it's a popular area or not. Busy areas tend to have higher lease bonus amounts.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Offer to buy mineral rights... Asked 10/29/2015
Q: I own approximately 102 mineral acres in Garvin County Oklahoma. Sec.16 and Sec. 9. There is a producing gas well on the acreage. I have a letter of intent and other documents offering me $2,300/acre if I have a 1/8 royalty and $3,100 if I have a 3/16 royalty. They forgot to put the 3/16 part in the letter?? Is this common practice to offer like this? Does this seem like a fair price? I don\'t want to warrant the title because it could cost me down the road. They said I didn\'t have to but sent the mineral deed with a warranty clause. I hope to sell these minerals but want a fair price with a reputable company. Any advice is appreciated. Thank you.\nJ. Wick
A: Since you didn't provide a township and range in your description I can't tell you if the offer is "fair" or not. I would expect that since it came "unsolicited" that it would be on the low side of an average offer, rather than "top dollar".

I always suggest that people wishing to sell their mineral rights list them with us instead of relying on some unsolicited offer to determine value. We of course work with MANY buyers and thus can more accurately determine market value for our sellers. If you choose to do this you can list your minerals with us by going to the Sell Mineral Rights page of our website. There is no cost to do so.

It was likely just a mistake that they forgot to include the 3/16. I'm sure they would honor the price if in fact you are leased at 3/16. As for the warranty clause, if you are SURE of what you own then I don't see an issue with agreeing to warrant the title, however if you are not sure what you own then I would advise against it. They will of course check your title prior to closing anyway so I'm sure they'll figure out what you own. If you don't want to warrant title, you can strike it out on the deed and initial beside it. Better to just have them send you a new deed without the clause though if you are uncomfortable about warranting.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub

Accretion of riparian mineral rights? Asked 10/29/2015
Q: How are riparian mineral rights quantified? Is a survey\ncommissioned as part of the title certification protocol?\nIs it usual and customary practice to require measurement\nand include such riparian acreage in lease negotiations? \nAre any such surveys recorded as public information?
A: Courts and commentators have almost uniformly held that unsevered mineral estates are susceptible to the doctrine of accretion. The doctrine basically provides that "gradual accretions of land from water belong to the owner of the land" and "land encroached upon by water ceases to belong to the former owner."

If your mineral rights are "severed" minerals (i.e. someone else owns the land) then your mineral rights boundaries might not be affected by water accretion, though I believe that three jurisdictions-Oklahoma, Montana, and Texas-have held that both severed and unsevered mineral estates are subject to the accretion doctrine. You'd really want to check with an attorney or "Google" some court cases on the subject to verify this however.

It is likely that anyone who wants to lease your minerals will do their own legal research to determine if accretion reduces your mineral ownership.

Once "drilling is imminent" a drill site title opinion will be ordered, which is more "thorough" than the leasehold title search. Some companies may not pay any additional bonus until that time.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Transfer minerals to daughters? Asked 10/29/2015
Q: I recently found out I inherited a small mineral right in West Virginia from my late wife. We (myself and other heirs) have been offered a signing bonus and future royalties, if any. I would like to transfer my interest to my two daughters....we all live in Oregon. Can I do that with a Quitclaim Deed? And I presume it has to be a West Virginia form and recorded in West Virginia even though it would be signed in Oregon....am I correct? Thanks.
A: You are correct.
Company wants lease "deep rights"? Asked 10/29/2015
Q: Please can you help interpret what this means for ( me) the deed owner. My lease is expiring 11/2015 and this is a reply to my counter-offer from soliciting landman for Continental. \n\nContinental Resources made a conveyance of the old lease to Mewbourne Oil from the surface to the base of the cottage grove formation. Continental Resource is wanting to lease from the base of the cottage grove formation and deeper. When Continental made the assignment they also gave Mewbourne the exclusive right to renew leases in this township. You could possibly have two leases for this same tract. The cottage grove formation is also the producing formation in this township and will more than likely be released. \n\nThank you for all your help !\n\nSam
A: Sounds like they just want to lease all your rights BELOW the Cottage Grove. Basically it's a new lease (and thus you can bargain) for just the deep rights. Sounds like the rights above it are already held by production from a well and thus you will remain subject to its terms for as long as anything above the Cottage Grove continues to produce. This new lease would only be for the deeper rights.

The Mineral Hub
Determination of Heirs? Suspended funds? Asked 10/29/2015
Q: My grandmother died in 2007 without a will and has mineral rights in La Plata county Colorado. There are only two Heirs. We thought that only one company was producing, but we recently found out that there is another company that has been producing and there is money in a suspense account. The first company accepted an affidavit of heirship to pay royalties. The second company is requesting that we do a determination of Heirship to get Suspense funds release which isn\'t a problem as we will have that in the next few days. However they are now stating that they do not want to relsease the fund for one year after the determination is done, can they legally hold the funds once the determination of heirship is done and what exactly does the determination of heirship do? Death certificates are also on file in the county.
A: I would think not. Once you prove it's yours, they should release the funds to you. Many states also have statutory interest that may be due on the funds. Check your state's laws for info on that, and if it applies to you, then ask them for interest payments as well when they release the funds.

The Mineral Hub
Royalty versus mineral rights? Asked 10/26/2015
Q: Do royalty rights and mineral rights have the same meaning? These are for limestone minerals in Pennsylvania.
A: The right to "royalty" is simply the right to receive royalty payments. Royalty rights alone does not denote actual ownership. "Mineral rights" on the other hand, usually denotes both ownership AND the right to receive royalty payments from any production/mining.

The Mineral Hub
Discover & claim Mineral Rights ownership ? Asked 10/26/2015
Q: @ decade ago my siblings and I inherited mineral rights in Oklahoma from our deceased mother. Since then we have been contacted to lease other mineral rights that we were unaware of in 3 different states ( OK., TX., KS) . Landmen have traced us through as heirs of mother\'s deceased husband. He predeceased her without adm. a will in Oklahoma. Some of these mineral rights were in his long deceased family member\'s name and some he owned sole-separate property. All inquires involved leasing and identified us as heirs ; requested our information, but only one completed the lease process . After the initial contacts we never heard from interested parties in each case ? \nMy questions are how to identify the owners of the mineral rights in question ? Where to find these records online ? And how to identify what has been leased and by whom since we were contacted ? We think there was shared interest of rights with deceased husband\'s 2 children and they\'ve been contacted and completed the leases without us. Any information and advice is appreciated.\n\nAnd thank you for the useful information & answers I\'m provided here at the Mineral Hub !!!
A: In order for the heirs to have clear and "marketable" title to inherited minerals rights in Oklahoma the decedent's estate(s) will need to be probated IN Oklahoma. Many companies will lease heirs without having this done, but if a well is ever drilled the heirs will not be paid (money will be put into a suspense account) until the pertinent estates have been probated in Oklahoma.

Certain county clerk offices do have some of their more recent records available online. I use a site called okcountyrecords.com in such cases. You can also search for leases using this site.

Another good site to use for leases (because it's easier to use) is pangaeadata.com, but it is fairly expensive and used mostly by professionals.

The Oklahoma Corporation Commission is the oil and gas regulatory body for the state of Oklahoma, and on their website you can find a wealth of information about what's going on in the area where your mineral rights are located. You can search for production, completion reports, pooling orders, applications, and other things that the Commission regulates. You can search their oil and gas database from THIS page.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Asked to return lease bonus by company... Asked 10/22/2015
Q: Per a landman\'s services, I leased my mineral rights to a company. I received a check for this. Later the company said that the property already had an current lease on it and they want their money back. Am I obligated to pay them back?\nThanks\nCindy
A: Wow, sounds like they didn't do their homework before leasing. Probably a question for an attorney, but if you warranted the title in your lease then likely you will need to give the money back. If not, then perhaps you can argue they didn't do their "due diligence" and that's not your fault.

I doubt they would fight you on it much anyway, as long as it wasn't a huge amount of money (to them). Doesn't look good to be suing mineral owners because you screwed up the title and paid them even though already leased (which company should have caught prior to paying you).

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Deceased in Texas, minerals in Wyoming need WY probate? Asked 10/22/2015
Q: My father recently passed away. He has been receiving royalty payments for many years from Wyoming. He was a resident of Texas, as am I. I am the executor and have filed probate in Texas and received Letters Testamentary. Is there a way to avoid probating this again in Wyoming for transferring checks to my name. The problem is the checks are only 1/2 of one percent so they are small and on wells that were drilled in the 1960\'s. The expense to hire an attorney in Wyoming, court fees, travel fees etc far outweigh the income. Any suggestions?
A: Check Wyoming law. In most states, the estate must be probated in the state where the mineral rights are located in order to be properly vested in the heirs. It's possible Wyoming would be okay with a copy of the Texas final decree but you should check with a Wyoming attorney to be sure. If you do end up having to probate in Wyoming, it will be what's called an "ancillary" probate, which is usually cheaper than a full probate.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Mineral rights in probate Asked 10/18/2015
Q: My father passed away last year, and I was just informed that because he didn\'t have a will stating a sole beneficiary, that the mineral rights is geting divided \"evenly\" between my mother, my three siblings, and myself. Now my mother, so I\'m told, has been labeled as the executor of his estate. Can she legally decide to keep all of the mineral rights for herself? And if that were to happen would i be able to take her to a civil claims court to sort that out, or would i be out of luck in that situation? Also, how long does the probate period take seeings how there wasn\'t a will? Also, last question, am i legally able to sell my portion of said mineral rights right now while it\'s still in probate?
A: If he didn't have a will, then the estate will be distributed according to the state's intestate succession laws. Mom, as executor, cannot just claim all the mineral rights for herself. If she tried to, then you could take her to court to invalidate the transfer on grounds that your father had no will and thus the minerals were subject to the state's intestate succession laws and must be distributed according to such laws.

In most states, his estate will need to be actually probated in court (will or no will) before the title will legally vest to the heirs.

Probate should take no more than a month or so.

Not sure whether you can realistically sell until estate has been settled and they are actually in your name because while they probably vested to you at his death, most buyers will want to see a probate before buying. However, a buyer may go ahead and agree to purchase them anyway, with the caveat that the estate is in the process of being probated.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub

Dewey County, Oklahoma lease prices? Top lease? Asked 10/18/2015
Q: My family owns 50nma in Dewey County, Oklahoma section 33, 17N16W. What are current leasing prices and drill activity for this area.\n\nWe have already leased for 6 years and been told there\'s no activity on property. How do we confirm that ?\n Now we\'ve been offered a lease by a different company ...yet their docs call it \"renewal\". And they only pay 10% of bonus 400/nma & 3/16, with balance due in 45days...if their interested.\nThis doesn\'t sound like solid offer and quite different then past leases.\n2 family members rushed to complete & returned leases. Can I hold out for better offer ? Looks like Dewey County sec 33 17N 16W is closer to $1,000 nma ?
A: First of all, if you're already leased for six years then you're done. No other lease can actually take effect until your current lease expires.

Since I haven't actually seen the offer you refer to this is only an educated guess, but it sounds like the 10% up front deal is a company wishing to "top lease" your current lease, which apparently hasn't expired yet. They will pay you 10% now to lock you into leasing with them when the time comes, then pay the other 90% IF they decide to go ahead and lease once your current lease actually expires. Probably not a gi ven though, as they probably gave themselves an "out" in case they decide to change their mind, (though you could likely keep the 10% down.

If that's what's going on, I wouldn't go for that if it were me. Better in most cases to wait until closer to the time that your current lease expires before agreeing to lease to anyone else. Prices could be a lot higher by then, and there could then be others besides this company wanting to lease you, thus creating competition among them. I'm not a fan of top leasing in most cases.

Could also be, assuming you are not currently leased, that they just want to "lock you in" by paying 10% now and then they ask for another 45 to verify your title and/or change their mind about the whole thing.

Assuming (again) that you are not already currently leased, I think you can do somewhat better than $400/acre based on recent pooling bonus amounts in this township. If you have 50 acres, that's a good chunk, and thus gives you some bargaining power as well. Use it, while being nice. $1000/acre? Probably too much, and am wondering where you got that figure? Coffee shop?

As for activity in the area, the Oklahoma Corporation Commission is the oil and gas regulatory body for the state of Oklahoma, and on their website you can find a wealth of information about what's going on in the area where your mineral rights are located. You can search for production, completion reports, pooling orders and applications, and other things that the Commission regulates. You can search their oil and gas database from THIS page.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Mineral Lease prices in West VA? Asked 10/17/2015
Q: My family currently owns numerous mineral leases in W. Virginia.\nRecently we were offered a $2700 signing bonus on our 0.556%\n of 242 acres of mineral rights. What is the going price per acre?\nAnd is this a fair offer or should we ask for more? This would be a\nfive year lease with renewal in five years. \n\n\n
A: Not familiar with lease prices in WV unfortunately. You might contact The National Association of Royalty Owners in Tulsa, OK and ask them to put you in touch with the Appalachia Chapter of the organization. Someone in that chapter should be able to at least give you a ballpark price. You might also consider joining NARO in order to become a better informed mineral owner.

I would stay away from any "5+5" leases if it were me. Five years is plenty already. No need to give the option for another five at the same price. Lease prices could be higher by then for one thing.

The Mineral Hub
Well in one section holding adjacent section too? Asked 10/16/2015
Q: In the 1970\'s (prior to statutory pugh clause) my grandfather leased mineral in 2 sections. In section 1 a small well was drilled. After my grandfather passed away, my father inherited. However, he never received royalties on this particular well. The well was shut down a few years ago, but prior to this another company drilled a well in section 2. My father passed away a few years ago and I inherited all of his estate. I don\'t believe my father knew about the mineral interest in question; however, a deed was found on record, and, therefore, I now own said mineral interest. The oil and gas company contacted me a few months ago through a landman asking me to sign a statement saying that my father had knowledge of the lease from the 1970\'s and wanting to hold me to that lease with a 3/16 royalty. I went through my father\'s paperwork and could find no documentation showing he received royality from section 1. The oil and gas company told me through the landman that the lease was done in \"good faith\" and I would be held to it. I started contacting the operators that had the well in section one, so that I could prove my father never received royalty. It was quite a list and many companies have changed hands numerous times. However, I did manage to get in contact with a couple and they confirmed my father never received royalities from the well in section 1. During this research process, I found that one company (in the 1990\'s) had sold to the very oil and gas company I was having the dispute with. So I called the division order department of company Z, the one I am having the dispute with, and this person confirmed that my father did not receive royalities from the well in section 1. So I called my landman contact and explained that company Z actually had documentation proving my father never received the royality from the well in section 1. Therefore, I wanted to sign a new lease for the mineral I own in section 2. That was about a month ago and I haven\'t received a reply. My question is \" isn\'t the original lease that my grandfather signed in the 70\'s now void?\" How do I proceed from here? Thank you for any input that you might have.
A: Your father probably never received royalties because no one notified the company that your grandfather had passed away. Likely the money was placed in a suspense account at the oil company, and later turned over to the state so heirs could claim it at some point. Check out www.missingmoney.com and run the names to see if anything shows up.

The 1970s lease is only voided if production ceases from the leased premises. If there has been continuous production since the 1970s from ANY part of the leased premises, then the lease has not expired, and the current owner is bound by it. No need to sign anything if that's the case I would imagine so would wonder why they are asking you to.

I wouldn't sign anything without seeking the advice of a competent oil and gas attorney. Could be they are wanting you to ratify a lease that is no longer valid, thus making it valid again. Be careful.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Property Tax sale. Did we get mineral rights too? Asked 10/15/2015
Q: We recently acquired some property which was up for tax sales, No where in the deed can we find out where the oil and gas reserved or removed from this property. This property was in heirs as the woman who owned it back in 1896 said anyone with her last name could live there free, just pay taxes. Well one of the heirs signed a lease agreement and received compensation, We do not know if anyone else sign with the gas company. My question is as the new owners of the property are we not intitled to the royalties?
A: You'd have to run the title back to see who owns the mineral rights currently. or hire someone to run it for you (i.e. abstract company, landman, attorney etc.) Just because the deed doesn't mention or exclude mineral rights doesn't mean you own (or don't own) them. You need to trace the ownership back a ways and see when or if they were ever split off from the land and sold or otherwise severed. If they were never split from the land, then you own them

If you do own the minerals then the company doing the leasing should have seen your deed when they were getting ready to lease, but you may want to contact them and see who they think owns the mineral rights. They would have "run title" on the tract prior to leasing it from the heir I would imagine. Could be they were not aware the property (and perhaps the minerals along with) had been sold to you at a tax sale.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Own minerals under unleased land containing producing wells. Asked 10/13/2015
Q: 8 wells on 4\nMy father transferred his mineral rights to me. I have been mapping out the tracts (13 different) and discovered 8 currently producing wells on 4 of the tracts that we are not being paid on. \nOne of the tracts has 2 old wells that we collect a share of $50/yr. well head gas rights and has one of the wells on it. One tract has never been leased and has 3 wells on it. One tract had about 85% of it leased and one of the wells rests on the 15% that has never been leased. And the 4th has 3 wells on it and has never been leased.\nMy family has owned a share of the mineral rights for well over 100 years and pays property taxes on that ownership.\nHow could this have happened and what can I do about it?\nThe oldest well was drilled in 1981 and the newest in 1995.
A: Possible the interest was force-pooled because they couldn't locate you. If so, they would have put any bonus money into a suspense account and eventually would have turned it over to the OK Secretary of State's office, where you could claim it as an heir.

Same for any royalty payments that have accrued since the wells were completed. You'll need to prove to the operator and/or the SOS office that you are entitled to the payments.

If in Texas or some other state without forced pooling laws, it's possible that your minerals were not actually included in the drilling and spacing unit created, and thus you wouldn't be entitled to any payments. You should check with the operators of these wells to determine why you weren't paid.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Website search for our mineral ownership? Asked 10/13/2015
Q: Is there a website that will allow me to search for properties that I or my family members own? I have found Mineralholders.com for Texas is there any websites to help me search in other states?
A: The county clerk's office in the county where the mineral rights are located is your best bet. They have several methods to search, one of which are index books where you can search by name to see what, if anything, is owned by you or your family members in that county. Many county clerk's have at least some of their information available online these days so searches for at least fairly recent activity can often be done online. okcountyrecords.com is one I use for Oklahoma. texasfile.com is one I use for Texas.

If you don't know the county or state where your mineral rights are then it's going to be a lot tougher, and I don't have any suggestions for that. Most people who own anything worth owning are at least aware of the state, if not the county and state.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
www.mineralhub.com
Net Mineral Acres? Asked 10/12/2015
Q: Thank you for explaining what Net Mineral Acres means, it clarifies a few things. I have another question: Is Net Mineral Acres, the only amount of land that is being utilized? or is any of the gross acres being leased available for mining? \n\nThank you for taking the time to respond, ignorant questions I\'m sure, but I\'m new to all this. You guys are a big help to this greenhorn..
A: To follow up, the oil company lease will show the amount of gross acres they are leasing in a certain tract. That tract will often then become part of a (sometimes larger) drilling and spacing unit. In fact, the oil company could have several lease forms, one for each tract they are leasing. Each owner within each of those tracts will receive the same lease form as I mentioned in my previous answer to you.

Most drilling and spacing units consist of 640 acres (for gas) and often 160 (for oil) and anyone who owns beneath those drilling and spacing units (size determined by the oil and gas regulatory body for each state) will share in the proceeds from any well drilled thereon.

Hope this helps clarify.
The Mineral Hub
Net Mineral Acres? Asked 10/09/2015
Q: I have just recently discoverd that i am an heir to Mineral Rights in Texas. I and 2 other family members each have a share. We have a lease offer terms as follows: Bonus $800/net mineral acre; 22.5% royalty, 3 year prime term, 2 year option to extend. 99.56 acres. How do you figure \"net mineral acreage? not real sure of how to do this. Very new to all this.. Thank You
A: "Net Mineral Acres" in this case simply means the number of acres you own within the tract that they are leasing. "Net" is what you own within the "gross" number of acres they are leasing.

For example, the lease document might say 160 acres. The lease will have the same acreage figure for everyone's lease who owns within that 160 acres. You might own 20 acres under that 160, meaning you own 20 net acres under the 160-acre tract they are actually leasing. Other mineral owners would own the other 140 etc.

Likely they will also provide a "cover letter" stating the amount of net acres they are paying you on, though the lease itself will only state the gross acres they are leasing from everyone total.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Value of mineral rights in Williams County, ND Asked 10/07/2015
Q: Trying to find value of a mineral rights lease in Williams County, ND\nTownship 154 North - Range 96 W\nGross Acres under lease 160.0 Net Acres need value for 62.65 net acres
A: I would use three times the bonus amount per acre you received as an approximate value of what they are worth now per acre.

If there is already a well you are being paid royalty on, I'd instead estimate their value at between 36 and 48 times the average monthly income received over the past few (production) months.

If you need a more in-depth appraisal of value, I can put you in touch with a geologist who could probably do a much more detailed analysis of value for you and likely provide a more accurate valuation. He would need to charge you for that of course, while my estimate above, while not "in depth", is without cost.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Intestacy laws in Oklahoma apply? Asked 10/02/2015
Q: Hi - I have a small portion of mineral rights in Oklahoma. \nRecently I was contacted by someone and discovered that\n my grandfather had many more acres of mineral rights that I\n was unaware of. We (my sisters and I) found out that he had \njoint tenancy on these rights with his second wife. So upon\n his death she inherited all his rights. Then she passed away \nand all her rights went to her son, who passed away \nand had no heirs. We were told we have no legal options, \nand no claim to those mineral rights, even though they \ncurrently have no owner, or at least no alive owner. This \nwas from a reputable legal firm in Oklahoma. \nWe have been encouraged by someone one else to seek a \nsecond opinion (this person had been successful in getting\nmineral rights via a will dispute). \nIs there any legal recourse? In our case, there was no will. \nShould we bother with trying to get the mineral rights or is \nOklahoma law regarding mineral rights fairly \nstraightforward and we shouldn\'t even try? The joint tenancy\nwas filed just a few months before my grandfathers death. \nAlthough his second wife did get the mineral rights, she never\nfiled a survivorship. There are several acres, and a large\namount of money that are now existing, but no heirs. \nThe law firm that we worked with did get all copies of legal\ndocuments/joint tenancy/death certs/etc. \nAny information you can provide is much appreciated. \nThank you!\n
A: If the minerals were owned jointly by his second wife, then yes, when he passed away, they would have gone to her automatically. No probate needed. She should probably have filed an affidavit of surviving joint tenant of record, but even if she didn't that wouldn't change her ownership.

Since she has since died, and her son has since died, her son's estate now owns them. Oklahoma's laws of intestacy will determine who gets his rights. It might be you, it might not be. An attorney should be able to see if you are in line for these since the son apparently had no close hers. Usually intestacy dictates property goes first to immediate family, then cousins, step-children, shirt-tail relatives etc,. down the line until they find someone still living.

That's my opinion. Feel free to check with an attorney on this matter as well. They may know more than I about these things.

Hope this helps.
Frederick M. "Mick" Scott CMM. RPL
The Mineral Hub
Medicaid/Mineral Rights valuation? Asked 10/02/2015
Q: State of Ia Department of Human Services wants to know the value of my mothers mineral rights that she owns on land in the Bakersfield, Ca area. In order for her to continue to be eligible to receive benefits they want a HerAny from a knowledgeable source indicating the current market value of her mineral rights. Do you have any suggestions in how we can document a value. The present company that holds a lease with her paid her $25 per net acre (118.05 gross acres) in Dec. 2014 for a five year rental. Lease goes until 1/14/2020. \n i inquired about this from the present company that she holds a lease from and a Land Assistant emailed me back stating, \"finding someone in California that would appraise a mineral interest is about zero\". I live in Minnesota and have no family in Bakersfield to inquire about this mineral lease. We also have no deed of property only records from the leasing company that states the county(Kern) and parcel,sections describing the land. Thanks for hearing me out . Any suggestions you have would be appreciated. \n\n\n
A: Off the top of my head I'd say they would probably be worth between $100/acre and $125/acre to most buyers, and so that could be used as "market value" as far as Medicaid is concerned I would think. You can read our article on valuing mineral rights as well. Should give you a rough idea of where I came up with that valuation.

If you need something "formal" I agree with the land assistant that you'll have a hard time finding someone qualified to do proper mineral rights appraisals. I do them occasionally for a government agency here in Oklahoma but don't like to make a habit of it. The estimate above is a "freebie" and is just a rough estimate. Probably not too far off though unless a fantastic well has come in nearby recently (in which case their value would be greater).

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Can I sell leased mineral rights? Asked 10/01/2015
Q: My parents own property in West Virginia and are leasing it for five years. They have been approached by another oil and gas company to sell their acreage. If they are leasing to one company, can they sell it to another company while under the lease?
A: Of course. No problem selling mineral rights that are currently leased.

The Mineral Hub
Leasing/Transferring Mineral rights from Probated Estate Asked 09/29/2015
Q: I need information on transferring mineral rights from an estate that is currently in probate. The deceased owns OK mineral rights which are now part of an estate. That estate is currently in probate. Lease offers have been extended for the mineral rights. \n\nCan anyone help me with information on how to transfer mineral rights from an estate or how to go about leasing those rights or selling them while the estate is in probate.
A: The executor of the estate should be able to transfer the mineral rights to the heirs once the estate is probated, using an executor's deed. Likely he/she could sign a lease on behalf of the estate as executor while the estate is in probate as well, but to actually transfer ownership would require the probate be completed first.

The Mineral Hub
Oil rights Asked 09/28/2015
Q: Um chevron has a lease or had now hes deceased but we sold property what happens\n
A: I am not sure what happens now, except that perhaps you decide to take the time to properly phrase your question and include some semblance of proper punctuation so I don't waste my time trying to decipher what you meant.

Wow!
Change of address needed by county clerk if I move? Asked 09/27/2015
Q: I own mineral rights in Oklahoma. When I change my address, so i need to inform the respective county clerk\'s office?
A: You are not required to, but filing a simple "notice of address" with the county clerk would enable people to contact you in the event someone wished to lease the mineral rights from you in the future etc.

You'd want to include in the notice the legal descriptions of all the mineral rights you own in Oklahoma, and file the notice with the county clerk of each county you own mineral rights in. The same form could be used in all counties.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Oil company won't pay royalty without probate. Asked 09/23/2015
Q: My brother received the ownership of several mineral deeds IL. The titles were handled by an attorney. The leasing company will not release his royalties without an heirship document and proof of probated will. Isn\'t this redundant? Shouldn\'t the recorded deed be enough?\nThanks for answering.
A: While many companies will lease an heir without requiring proof of "marketable" title, those same companies will often withhold royalty payments that result from those leases until the owner/heir "proves" they have marketable title.

Sounds like (correct me if I'm wrong) the mineral rights your brother is claiming were inherited from someone, but a probate of the decedent was not ever completed and filed of record. This is the "proof" they likely seek in order to release the royalty payments, and in most states it is a valid request.

You initially stated that your brother received "ownership" of several deeds. If in fact those deeds showed him as a "grantee" of the leased mineral rights, and the grantor actually owned them at the time of the conveyance, then that should suffice as "proof" and thus no probate would be needed as they were conveyed by deed from a living owner. However it sounds as if they were actually inherited rather than transferred to your brother by deed, and thus a probate of the decedent's estate is needed in order to show that a judge "signed off" on your brother inheriting these rights.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
Potential lessee told me my rights were unitized? Asked 09/23/2015
Q: I signed a lease which had a bonus consideration. They had 120 to pay the bonus. I receIved a letter today saying they were not going to pay it because they say my minerals are held in unitization... What does this mean?
A: Means your mineral rights were at some point in the past included as part of the unitization of an old oil field. A "unit" in this case is basically the expansion of several already producing leases into one big "unit", and anything under the unit will share in production occurring anywhere within the unitized premises. This is often done with older oil fields in the hopes of increasing production from the field.

They probably didn't realize your mineral rights were part of this unitization (and thus already producing, and thus technically "leased") until they starting doing their research. 120 days? Research shouldn't take that long...ever. I usually will agree to (at most) 30 business days. No more.

Note that if your minerals are, as they claim, included in a unitized field, you should be getting paid your share of the production that is occurring there, whether actually from your minerals or not. Perhaps they will be kind enough to tell you who is operating the wells in that field so you can contact them yourself.

Hope this helps you out!
Mick at the Mineral Hub
Title question Asked 09/18/2015
Q: What County agency do I need contact to see if I have title to the mineral rights in that county\nwhich I inherited in 2004.\nI am in possession of three pages from the County Court of Reeves County no.3156\" Order Admitting Will To Probate As Muniment of Title\" but my name does not show on there?\nThe Application was ordered by Erin Williams of Clayton Williams the oil exploration company.\nAny thoughts on that would be appreciated
A: You'll need to search the records of the county clerk's office, or hire a landman or attorney to search for you to see who currently is the record owner of the mineral rights. The county clerk's office may help in getting you started, but it is their job to file documents, not to do title searches unfortunately (though they often will help out anyway, time permitting, assuming you ask nicely).

Hopefully the Order you mentioned resulted in an actual probate of the decedent's estate being done. Assuming you are an heir, you would be listed as such on the probate. Note that probates might be filed with the COURT clerk, rather than the county clerk. Usually in the same building (i.e. the courthouse) but in different rooms. I think you could probably just call the court clerk and provide the year of death and the decedent's name to them. They would probably be able to tell you if the probate was completed and provide you a copy of it if it was.

To determine if the decedent actually owned what was claimed in the probate (assuming it included a list of what was owned) you'd still want to confirm by searching for where he/she obtained them. This would likely bring you back to the county clerk's office.

Note that we have published an article on determining who owns mineral rights. You can read it on the Mineral Hub Articles page of this website.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Selling minerals in Love County Asked 09/17/2015
Q: My husband inherited mineral rights in Love County, Ok from his father in 2013. We are interested in selling these and were talking to a potential buyer, but that is now \"on hold\" due to a geologist\'s report that there is a \"problem\" with the Woodford formation in the section. This is 26/6S/1E Love County. We have no idea what the problem is or why the buyer is no longer interested. How can we go about getting info? Or can you help?
A: Does your husband have good (i.e. "marketable") title to them? Does he know how many acres he inherited? List them for sale on the Mineral Hub (this site). We will see if we can't find you a suitable buyer. Go to the "Sell Mineral Rights" page and just fill in the form to list them!

Sincerely,
Mineral Hub
Oil company wants to buy our mineral rights Asked 09/16/2015
Q: hi my name is jami, recently my mother had received a phone call from someone who said that my dads mother had land in Oklahoma with royalties. the company trying to drill wants us to sell the royalties back to them or something to that line. my mother forgot the name and did not take there number down. so where are we with this I have no idea. the land belonged to my grandmother wich has three kids, she has passed, and my father has passed. so obviously some of this I am entitled to some of this also. my mother said that they guy even said that part. but why did my mom get the call and not my dads sister or brother which don\'t live in Oklahoma they live in Washington. and how can I find out who this was and how to talk to them to see if my mom is really not being frauded in some sort of way.
A: Well, it's likely they wanted to LEASE the minerals, rather than buy them, but in either case I would just wait for them to contact you again and go from there. You might want to check out our leasing tips article (can be found on the Mineral Hub Articles page) before agreeing to lease to anyone.

If they really want to BUY them, then you can contact US and we can help you check them out to make sure they are legitimate. Usually an oil company who wants to drill will offer to lease rather than buy so I'd be a little surprised if the offer was to buy but you could be correct. You can clarify that once they contact you again. If they don't, then I'd take some time to learn about what you have. There are numerous articles on this site and others that will help you learn how to manage your mineral rights.

The Mineral Hub
Royalty payment on potential rights under house? Asked 09/16/2015
Q: How can I find out if money is being paid out now for mineral rights on a residential property I\'m hoping to purchase?
A: Ask the current owner for copies of any recent royalty check stubs, or ask the current owner if they even own the mineral rights under the property.

The Mineral Hub
Lease offer in Blaine County, OK Asked 09/15/2015
Q: What are recent offers in Blaine Co, OK? Received lease offer for township 14N Range 13W in Blaine Co, OK of 3/16 and $1$1,0002 per net mineral acre. Since then, discussed increasing to 20% and $500, and finally offered 1/4 and $0/acre. Proposed term is 3 years. What are your thoughts about the latest offer?
A: I have seen lease offers of $650/acre, 3 years, 3/16 earlier this year in that township. This was in section 4. You didn't mention which section you are in but hope this helps you out. Not much leasing going on there right now, but Continental Resources is who you might check with if some other company is the one that contacted you.

You might want to check out our leasing tips article (see "Mineral Hub Articles" page) before leasing. Lots of good tips.

The Mineral Hub
Mineral rights owner liability Asked 09/11/2015
Q: If I lease my mineral rights and damage is done to the property affecting the surface rights owner, can I be held liable for damages if the lessee or drilling company has no money (bankrupt)?
A: Possibly, but very unlikely. Technically though you could be if CERCLA (the "superfund" clean up people... see http://www.epa.gov/superfund/policy/cercla.htm) decides YOU are the only one with any money in the end.

The Mineral Hub
ALL Lease Changes Denied. Better not to lease? Asked 09/11/2015
Q: I requested lease changes based on the recommendations I found on this site and others. I wasn\'t overreaching, but was told that the client hadn\'t accepted any changes to the other leases offered and would not start now. I find this incredibly unreasonable, but I would like to know what the best course of action to take is... sign the lease as is or refuse to sign? I would appreciate someone running through the pros/cons/cost of doing nothing. Many thanks in advance!
A: If they won't at least let you add a depth clause and a no-deductions clause, then I would not lease to them. I'd rather risk being force-pooled (not always bad) rather than sign with someone who won't even agree to the above common clauses.

If they "need" your lease bad enough they will eventually agree to those two clauses at LEAST (depends on how badly they need YOUR lease). If not, not a big loss in my opinion to just not lease at all to them.

The Mineral Hub
Surface Only Value in Reeves County, TX Asked 09/09/2015
Q: My daughter-in-law has been approached by a major oil \ncompany to purchase \"surface only\" in Reeves County, TX. \nWhat is the best approach to find the market value for \n326 \"surface only\" acres in Reeves County, TX?\n
A: Talk to a real estate agent would be my advice. That's what they do. You could also research it yourself I suppose, by researching the sale prices of comparable lands in the area to estimate what hers is worth.

The Mineral Hub

Heirs of Life Estate Ownership Asked 09/09/2015
Q: My dad just passed away and had a life estate in my stepmothers fathers estae who died 15 years ago. Some of the oil and mineral rights were is Mississippi and Alabama and he was told he had to get her will probated in those states but he had to get signatures from my step brothers and sisters (6) before he could probate. They refused to sign and he believed he had been accumulating royalties all these years. Now that he has passed away, does any accumulation of royalties from the past 15 years go to her heirs or his. The ownership of all oil and mineral rights will transfer to her 6 children. Thank you for your response!
A: Your dad's life estate ended when he died, so at his death he would no longer have owned the property. After his death the property reverted to someone else. Perhaps to heirs of your step-grandfather.

You really need to talk to an attorney about this. The answer could get complicated and I am not able to answer it in detail in this forum as I don't know enough about the family history.

The Mineral Hub
Value of mineral rights in Jack County, TX? Asked 09/09/2015
Q: I was contacted by an oil/gas independent Land man who said that my great aunt inherited 63 128th mineral rights on 80 acres in Jack County, TX. He is working for a company out of CO. They have offered to buy it all for $10,000 but are trying to push us to move quickly. We didn\'t even know she owned it. Does this sound fair priced? He said he would provide me comparisons in the area and a copy of the mineral rights deed listing my aunt as owner, but I haven\'t seen anything yet. Never researched this before.
A: If neither you nor your aunt knew she owned anything, and now someone has offered out-of-the-blue to buy them for $10,000 and is pushing her to "move quickly"; I would of COURSE view that as a "red flag" and do further research before agreeing to sell to anyone.

I WOULD ask this guy for a copy of the mineral deed he claims to have however, though I doubt he'll give it to you unless she agrees to sell to him. If he won't, no worries, you can obtain a copy of it from the same place he did...at the county courthouse in the county where the mineral rights are located. You'd just need to search for her name, or perhaps the name of any people she thinks she may have inherited these from. The "Mineral Hub Articles" page will get you started on that process if you have to go that route because he won't provide the deed or legal description to you.

Armed with the mineral deed, you will at least know WHERE they are within the county, and thus could market them on your own or do some research on oil and gas activity in that area to help determine whether a well currently exists on the property.

If he hadn't been "rushing" you I'd have felt a little better about this, but frankly, it sounds like you and your aunt have NO clue what these are worth and so I wouldn't sell to some guy who is "rushing" you to sell to him for $10,000. There could be a producing well on the property that is making that much in royalty each MONTH. You think this guy, who is rushing her to sell, would tell her about any current wells on the property? Perhaps the oil company just couldn't locate your aunt. Don't risk this guy taking her money until you find out if there is any.

There could also be leasing activity in the area and your aunt could perhaps LEASE this interest (while still retaining ownership) for much more than the $10,000 this "hurry up" guy is offering. These types of people are NOT your friends. Beware.

Get a copy of the document he says he has (the mineral rights deed) and find out what she's actually got there. Then if she decides to sell them, list them for sale on The Mineral Hub (Sell Mineral Rights Page), where they will be seen by MANY buyers rather than just one "hurry up" guy. That's the best way to determine what these are REALLY worth, and The Mineral Hub can help with valuation as well once we know where they are exactly. The best way to determine value is to get them in front of multiple buyers at once, which of course is what we do here. If she decides to keep them that's fine too of course. Pushing people into selling is one thing we DON'T do here, but if she decides to, we're here to help.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Garfield County, OK value of mineral rights? Asked 09/04/2015
Q: We have 140 acres in Garfield county, OK. It currently being farmed for wheat. I know it would be an extremely rough estimate, but is there an average value of mineral rights available for that area?\nThank you!
A: Garfield County encompasses a wide area. We'd need a legal description, or at least a township, in order to provide any helpful info.

The Mineral Hub
Lease Offer in Ellis County, OK fair? Asked 09/02/2015
Q: Do these lease terms appear to be fair to me (mineral owner) according to current markets? Ellis Co, OK, Sec.14, T20N, R23W, 3 yrs. with 2 yr option at same terms, $150./A, 3/16s, or $175./A, 1/8. ? Thank you.
A: Probably not too far off. I'd say it's fair currently. I would refuse the two-year option though, unless they are willing to pay double the original bonus if exercised. Tell them you'll be happy to consider leasing to them again in three years once the current lease expires, at whatever the current rate is THEN. Likely it will be higher than what they are offering you in advance now.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Lease "Payment Order"? Asked 09/02/2015
Q: Landman is offering a \"consideration\" payment of $100. upon signing lease. Payment Orders within lease states Leasee has 6o days to pay bonus plus 60 days upon request by Leasor. Is this an indication that Leasee plans to only pay lease bonus IF they can successfully flip the lease? Minerals are located in Woodward Co., Sec 32, T21N, R19W. Offer is 3yrs. with 2yrs option, 3/16s, $250, or 3 yrs, 2yrs option, 1/8, $350/A. Would appreciate your answer. Thank you.
A: It's an indication that they would like up to 60 days to verify your ownership before paying the bonus. In most cases you will be paid within that time unless they find a title issue with your ownership.

I don't like payment orders or drafts, because there is no guarantee they will pay even if they don't find anything wrong with your title, even though you've likely already mailed your signed lease to them by then. I've had companies just "change their mind" on me before with these things. This is why I prefer a check rather than a bank draft or "payment order". Best to have them come over in person and exchange check for signed lease as well.

Tapstone Energy has filed some leases recently in adjacent sections. I'd contact them to see what they're offering if you haven't already. I rarely give permission for 60-day drafts myself. In most cases I'll require payment within 45 days (not "banking days") or no deal. And as mentioned above, I really prefer checks whenever possible, and closing the deal in person, at least with companies I haven't had dealings with before.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Do we hire an attorney so we can buy our son's minerals? Asked 08/31/2015
Q: Our adult adopted son (lives in CA) owns mineral rights in TX (inherited thru biological father) & wants to sell them to us (we live in CA) & we want to buy them/keep them in the family instead of an oil co. buying them. (1) Does the law require we use an attorney & title co. to facilitate the purchase? (2) How do we learn who owns the surface land or is our son both landowner & mineral rights owner? (3) What is the name of the Deed to transfer ownership so we can file/record it in the proper TX county? (4) Can gas/oil-produced land be sold for housing or shopping plazas in the future? Thank you very much.
A: 1. No attorney or title company needed/required if you (or your son) have the knowledge and know-how to properly prepare a conveyance from him to you. I would have an attorney do it for you if you're not sure how to properly draft one however, as he/she could ensure it is properly drafted and contains an accurate legal description.

2. Hopefully the document (probate, final decree etc. assuming there is one) stating your son inherited his biological father's interest would specify exactly what was inherited, but if not you'd want to check the land records in the county clerk/recorder office in the county where the property is located to determine exactly what was owned at his death, and thus what was conveyed.

You could also hire a local abstract company or landman to check for you. You'd want to trace back far enough to determine what his biological father owned at his death, and thus exactly what was transferred to your son (i.e. just minerals, or both land and minerals). You may have to trace back to where the biological father acquired the interest to determine exactly what he owned at his death. See our "Mineral Hub Articles" page for an article dealing with finding out who owns the mineral rights.

3. Sounds like you may need an attorney (see number one), though I would use a simple Mineral Deed if conveying only mineral rights, and perhaps a Warranty Deed if conveying both land and mineral rights.

4. Technically yes, but unlikely anyone would want to put a shopping center on a plot of land that also contained a well nearby. Additionally the surface and the land are really two separate estates, so the land could be sold separately from the mineral rights underneath.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Lease offer received for $700/acre etc. Asked 08/27/2015
Q: I have been offered $700 an acre, 3 yr @ 3/16 or I could choose $500 an acre, 3 yr @ 20% and I\'m not sure which one would be best. If you have any advice I would sure appreciate it!\n\nThank you,\n\nVictoria
A: Since you didn't specify where these are located, it's kinda hard for me to tell you if EITHER offer is fair or not. Though assuming they are representative of what's being offered in the area, I would take $700/acre and 3/16. 20% is not that much more royalty than 3/16, and they're subtracting $200/acre of bonus if you go that route.

The Mineral Hub
Dad bought mineal rights not sure what he has? Asked 08/27/2015
Q: My dad went to a number of tax auctions and bought several mineral rights. I am trying to figure out what he has.\n\nHe gets tax statements and pays taxes on the mineral rights. He has several. \nOn the statements I see:\n\n1) nwnw mineral only\n2) SE; mineal only\n3) w1/2sw-mineral only\n4) w1/2se - mineral only\n\n\nThey are in Madison county Missouri.\n\nThanks.\n\nI do not expect much real value, at this point I am curious about what he has. \n\n\nWhen he talked to me about it once, he thought that the land owner might be interested in buying them back. \n\n\n
A: He has mineral rights, just as you said, looks like. I was able to make out that the "nwnw" etc. are part of the legal descriptions of what he bought. To find out "what he has" you'd want to locate the property using the legal descriptions, and then find out whether there is any oil or gas activity around.

Many oil and gas states have websites where you can punch in legal descriptions to check for oil and gas activity.

The Mineral Hub

Lease offer received, but no payment? Asked 08/27/2015
Q: My question a jennie getz has contacted my family about leasing our land and she needs title searches and all sorts of things,she said she was selling to someone in Texas it was suppose to be final 250,000 by july 31st 2015 well that came and went it\'s almost September now that my family has sign god knows what she says oil prices are going down and look like things are going to fall through has my family been scamed and has anyone heard of jennie getz pr natural resources llc by the way I went to the secetart of stats website of businesses and it\'s listed but the a dress of the company is her home address and she is organizer of the buisness she told us she was an agent from exterra resources
A: Likely Jennie was leasing on behalf of some oil company, or perhaps she was buying leases herself and then hoping to resell them to an oil company later.

Did you sign and return a lease to her? As for being "scammed" I'm not sure what you mean by that as you didn't provide a lot of details. If you signed and returned a lease to her, and the paperwork (i.e. bank draft, payment order etc.) states that she MUST pay you, then you'd want to contact her and find out why you were not paid. If they don't plan to pay for the lease they bought, then of course you should ask them to return it to you (assuming you already sent it).

It's not that uncommon for an oil company (or someone leasing for them) to change their mind about a lease, especially if the market changes in a short time. In cases where "bank drafts" or "payment orders" are given to mineral owners in exchange for a lease it's not uncommon for them to change their mind on those either, and if you read the payment order/bank draft carefully it will usually state that they can "change their mind" for whatever reason, including title issues.

Bottom line: If you sent a lease in, you'd want to get it back if they haven't paid you anything, but promised to, or at least you'd want to find out what the holdup is. Perhaps they are just behind schedule (not that uncommon). Have you tried to contact this Jennie Getz? If not, that would be my first stop. Good news is they could just be behind in paying everyone (assuming you sent them a lease). Call her and find out what's up.

The Mineral Hub
Transfer of Limestone Mineral Rights Asked 08/26/2015
Q: My parents were divorced and my mother received mineral rights from my father (that he inherited from two generations back) in the divorce settlement....judge said the funds were co-mingled. Since then, another attorney indicated those funds were a stream of revenue from his heirs and not considered co-mingled. Recently, we found a right of first refusal contract from the mining company. Would that have made the transfer of those mineral rights to my mother\'s name invalid? The right of first refusal states \"shall not sell, transfer, exchange or convey the real property, etc.\" Mineral rights are considered real property. Mother died 3/22/15 and Dad died 11/17/08. Now the mineral rights are being passed on a relative on my mother\'s side of the family. When actually, my sister and I are the only heirs to my father\'s mineral rights.\n
A: To receive the mineral rights now, you'll probably need to contest the judge's holding in court since he/she has already ruled on the matter as part of the divorce settlement.

I would think that inherited rights cannot be considered "marital" property, and thus not considered part of a divorce settlement automatically, but state laws differ on that so check with an attorney on that would be my advice.

The Mineral Hub
Landowner liable for toxic oil spills? Asked 08/25/2015
Q: I\'ve recently sold my mineral rights. The buyer is willing to take the surface. I\'m hesitant to give up the surface. My question is, As only the surface owner am I at risk regarding liability? Since the surface is nearly worthless and the potential for any profit from it is slim, is it worth keeping or is it a liability risk. The land is 15 acres in Reeves county Texas, north of Pecos.
A: They usually sue the people who "have the money" in cases of toxic spills etc. caused by oil companies. In most cases it's the one who caused the damage to be sued, not the landowner (if they didn't cause it). If they can't find anyone with money (i.e. the company goes bankrupt) then they could technically come after the landowner, though in most cases small landowners who aren't rich don't get sued just because an oil company does something.

The Mineral Hub
Can I cancel a lease just because I didn't fully understand Asked 08/14/2015
Q: My mom\'s current lease expired Aug 12 and she received several offers before then. She signed and mailed an offer on Aug 11 she didn\'t fully understand. Can she cancel the agreement? She has not received any compensation.
A: This probably goes without saying, but she shouldn't have signed the agreement and sent it off in the mail if she, an adult, didn't understand what she was signing. She's probably stuck with it unless she can show they are not abiding (either now or in the future) by the terms of the agreement, or you can show that she is "incompetent" or was "not of sound mind" or something at the time she signed it.

If they don't pay her the lease bonus (assuming there was one specified) in a timely manner she might have a case for cancellation due to non-payment but you'd probably have to get an attorney involved at that point.

They will probably pay her within 30 days or so, or once they've verified her ownership. You can always contact them and ask what the holdup is if it gets to be more than 30 days, though I would give them at least that much time before assuming they're "late". 30 days is very common unless you bargain for something less in advance, and even 45 days is not unheard of. If it gets to be more than that then you might want to get on them about it.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Can we lease to another company if current company dragging Asked 08/13/2015
Q: My girlfriend and I bought a house in which the owner gave us the rights to the minerals. We contacted the lease company, which is XTO Energy, to let them know that we were now the owners of the property and minerals and needed to know what they needed to make the change so we could start receiving the checks. We asked them to stop payments to the previous owner and they said the payments would be suspended until processed showing us at the new owners, and they would send us the money due to us from our purchase date.. \nWe were told to send them a copy of the \"Warranty Deed\" we recieved from the realtor, which we did, and they told us it would take about 90 days to process and complete.\nAs we were getting near the 90 days we hadn\'t heard ANYTHING from them so we decided to contact them... They proceeded to tell us that we sent the \"wrong\" deed to them, that we needed to send the \"County\" recorded deed (which is not what we were told in the beginning) and that it would take another 90 days to process and complete.. At this point we\'ve become aggravated and asked if they could expedite the process since we wouldn\'t have even know this had we not contacted them, which I feel they should\'ve contacted us to inform us of the mistake... \nWe contacted them again today and were told the transfer was completed and now needed to be approved, and that we\'re looking at another 30 days or so before receiving our 1st check..\nWe bought the house March 2015, so we should have checks coming from then to current date, or at least that\'s what we hope...\n\nWith all this being said, can we change lease companies or not? We\'ve had other companies wanting to make us an offer
A: Cannot change lease companies if there is currently a producing well. However, you may be due statutory interest on some of the payments that are attributable to production more than 30 days old once you receive it. Check with an oil and gas attorney on that.

Unfortunate they didn't tell you to send the "filed" copy of the deed in the first place, which is in fact what they need. Otherwise, it's not an "official" deed in their eyes. Sounds like it's moving forward at least, and it's a good thing they suspended payments to everyone during this process so you won't have to worry about the previous owner cashing what are supposed to be your checks!

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Lessee rescinded offer after lease was signed due to "non-ow Asked 08/12/2015
Q: My father starting get letters in sept 2014 for mineral rights he inherited from his stepfather. His will has been probated in Oklahoma where his stepfather died and he (my father) is the sole heir. \nAfter about eight months an oil company in the Pecos, TX region called Rosetta contacted him and said he owned an 1/4 interest in 5,162 acres in Reeves county near Pecos. they said his stepfather sold a portion of his mineral rights in like 1962 but he retained the 1/4 interest. the mineral rights in question where actually in the process of being filed for receivership and his stepfathers name was actually on the petition for receivership. Their lawyers promptly withdrew the petition from court after finding my father, and so they offered him a $64,500 bonus and sent him a lease. \nHe signed and mailed it to them. after a week they asked for a copy of the probate and again he obliged and they said that they were going to have a check issued. a week or so goes by and he never receives his bonus check and my father finally calls Rosetta and they inform him he isn\'t entitled to royalties and that he doesn\'t actually own the mineral rights because his step father sold all of his rights. \n\nThis seemed suspicious to me and my father that they would not only send him send him the court filings for the receivership with his stepfathers name on them, send him a lease, offer a bonus, and inform him of what all he actually inherited just to withdraw so quickly and change their tune after getting a signed lease...\n\nIs this common? \n\nand stranger still a landman associated with them(rosetta) sent my father more paperwork outlining that his stepfather sold his interests but in the same letters he was asking him to sign another lease..?\n\nany help or info will much appreciated.\n~confused Okies in Muskogee
A: It's likely he did sell all the mineral rights, as they leasing company likely did a "title search" to determine who currently owns the rights after they took the lease. You could ask them for "evidence" that your father sold "all" the rights. They are not obligated to provide you with such proof, but they often will if you ask nicely. In lieu of that, you could always do a search of the records yourself in the county where the mineral rights are located. If your father sold them all, there would be a record of it at the county clerk's office.

I would also ask them to return the original of the lease your father signed, if in fact they are not going forward with it.

P.S. I have a cousin that lives in Muskogee. Small world!

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Purchasing property with gas rights. What do I need to do? Asked 08/09/2015
Q: I\'m purchasing property in Northeast Pennsylvania (Bradford County) that includes gas rights. The owner currently has a lease on the property. What do I need to know? What do I need to do?
A: If you also acquire the mineral rights, you will then be subject to the lease the previous owner signed, assuming it hasn't expired by the time you complete the purchase. You would want to obtain a copy of it. If it is already producing royalty income (i.e. there is already a well there) then you would need to notify the operator of the well that you are the new owner in order to begin receiving royalty payments.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Value of mineral rights in Pennsylvania? Asked 08/06/2015
Q: I have inherited MR to 45 acres in PA. I have a copy of the expired O&G lease and there was no drilling on the property. Currently there is a huge amount of Fracking going on in the area and we would like to know what theses MR are worth and who to contact to either lease or sell the MR.
A: We don't have the resources to do free appraisals at the Mineral Hub unfortunately, but if you want to sell them you could list them for sale with us and we'd be able to determine their value based on the offers we received from potential buyers. Usually this is the best way to determine value, as it is, after all, the buyers and sellers who "make the market", rather than someone who claims to be able to "appraise" mineral rights.

A landman, guy at the coffee shop, attorney etc. can do an appraisal of course, but their qualifications may be lacking, and if they are not actual buyers themselves they may not have a realistic grasp of what mineral rights are actually being sold for in your area. A legitimate buyer, and better yet, SEVERAL legitimate buyers (a-la The Mineral Hub listing) could probably do a better job.

If you want to lease them again, rather than sell them, you could check with the county clerk's office to see what companies may be leasing in your area currently and contact them to see what they might pay for another lease. If there is current leasing in the area, it's likely you could find someone to lease them again.

Calling potential lessees, rather than waiting for them to call you, may put you at a disadvantage however, because it's better to lease to someone who actually "wants" to lease, rather than asking someone to lease.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Sell Mineral Rights or Hold? Asked 08/05/2015
Q: My husband , along with his 2 siblings, inherited mineral rights in 2 sections in Love County, OK in 2013. They were already leased by his father and since that time there have been 2 wells drilled on the leased sections. 1 well is supposedly producing but the royalty checks have incredibly small and last month no check at all. The other well is completed and we are waiting on a division order. We are interested in perhaps selling, but have had little interest from companies we have contacted . Is there little interest in minerals in Love County? Do you have any suggestions? Should we hold and hope gas and oil prices go up?
A: If you have a new well, then you might want to wait and see how it "comes in" before selling. However, if you do wish to sell, I can help find you a buyer if you wish, and would make sure you received a fair price. Just list them for sale on the Mineral Hub's "Sell Mineral Rights" page. If you have any questions you can also call us prior to posting your listing.

Hard to put a value on them without knowing where they are located exactly. Most of the current oil and gas activity in Love County is concentrated in just two or three of the townships in the county. You didn't specify where your rights are so not sure if yours are in "the zone" or not.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Landman acreage discrepancy? Asked 08/05/2015
Q: My grandfather\'s will listed that he owned 12.42 mineral acres, but an oil company landman says the chain of title shows that he owned only 12 acres. Would it be worth while to hire another landman, or would they likely find the same thing? In other words is it possible that one might dig deeper than another one? Would hiring an attorney be better? I would appreciate your recommendation. Thank you!
A: If this is just a lease, I wouldn't worry about the .42 acre difference unless the bonus-per-acre is over $500/acre or so. Not worth the hassle otherwise, but yes, you could hire a landman, or go check the title yourself in order to "double check" their 12-acre figure. We even have an article in our "Mineral Hub News" section of the website explaining how to determine on your own what mineral rights you own.

If this is simply in the leasing process currently, then rest assured that if a well is ever drilled someone more experienced than the landman leasing you will do what's called a "drill site title opinion" to determine what everyone owns (again). This would be more thorough than the one they do when they are buying leases.

In the event the well is a producer (as opposed to a dry hole) then a THIRD, and even more intensive title opinion will be done, by an attorney, and more than likely THAT one will be correct even if the others are not.

This is because they want to make damn sure they are paying everyone correctly once a well comes in, and so they usually hire an attorney after the well is completed in order to "double check" the previous landman and others work. This title opinion is the one that results in the division order you will be asked to sign several months after the well comes in.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Determining Net Acres Asked 07/31/2015
Q: I am the Trustee of mineral rights in Oklahoma. How do I determine how many net acres the Trust owns based on the legal description given to me by Bryan County Court. I have been told a different amount of net acres by several landmen. I would like to sell the mineral rights but have no idea how many acres I would be selling. Do I need to hire a landman to represent the Trust? Is there an orderly process to selling minerals rights?
A: "Running the title" is the most accurate way to determine net acres owned.

To run the title, you can hire a landman or attorney to run the title for you and find out what the trust currently owns. Shouldn't take more than a couple of days unless there are a lot of different properties involved. Sounds like several landmen have already been working on this for you?

Once you know what you own and are ready to sell, I can help you get them sold in the "orderly" fashion you seek. We help people find buyers for their mineral rights here on the Mineral Hub as you likely know already from visiting our site.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
www.mineralhub.com
The Mineral Hub
Old quit-claim deed worth anything? Asked 07/30/2015
Q: FoundIndenture signed in 1965 by grandmother as heir of great grandfather that for $1.oo to quit claim a bunch of property in Bartow County, GA for mining purposes with commitment to a pro rata share of the mineral royalties. Just found this document and have confirmed the filing. Has too much time passed? How do I pursue?
A: Probably worth nothing as there is likely no production, but you could check the property to see if there's any producing on it currently, and if so, how long it's been producing. I'm assuming the mineral royalties you refer to are oil and gas (i.e. subsurface) minerals rather than surface minerals.

If you find production, you'd want to run that deed by an attorney and have him/her figure it out for you because without seeing it I can't provide more than a general answer.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
www.mineralhub.com
The Mineral Hub
Does deed describe what I own, or just what tract I own in? Asked 07/29/2015
Q: If I have a mineral deed stating that I own the E1/2 of the SE1/4 of the SE1/4 of Section 10, Township1 North, Range 11East, do I actually own that 20 acres of mineral or could it be possible that I only own a protion of the 20 acres?
A: Either could be true. You'd have to trace it back to previous owners to determine for sure. You could do this using the records of the county clerk in the county where the mineral rights are located.

Often, if a deed expressly grants "E2 SE SE" etc. then that's what is actually being conveyed, as in all 20 acres described. Be careful though, because if the deed precedes that with language to the effect of "all my interest in" etc. then that could change things obviously, because if the grantor owned only 4 acres under the E2 SE SE then he could only grant 4 acres to you of course.

In well-drafted deeds it should be clear which is the case, though unfortunately not all deeds are drafted well and so questions like yours do come up. Again, someone would need to "run the title" back to see what previous owners owned (and were thus able to later convey) before you can know for sure what you own.

If you ever lease them, the leasing company will pay you based on what THEY determine you own after running the title. They are usually correct in their figures so you could just go by what they say in the event you are leased, as they will usually check title before paying a lease bonus.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
www.mineralhub.com
The Mineral Hub
Clarification about Who Owns Mineral Rights in VA Asked 07/27/2015
Q: I am one heir to property in VA . Is it correct that the heirs automatically own the mineral rights to the property or does this have to be written as part of the deeds? There are 3 parcels.
A: It may be "automatic" in some cases (as in intestate succession), but you may also need to probate the decedent's estate in the state in which the minerals are located before you will have "marketable" title to them. Something that would be important if you later decided to sell them, or if a well were ever drilled on them.

If the inherited property has a producing oil or gas well on it currently, you'd want to notify the operator that you have inherited the interest so they could begin paying you. They will not be aware of this unless you notify them, and will likely ask for "proof" of what you inherited, and by what means (will, intestate succession etc).

If the property is not producing or leased currently, you might want to make sure the "final decree" or probate papers of the deceased are filed of record in the county where the mineral rights are located so as to put future people on notice that you have inherited them. If no probate was done, you could file an "affidavit of heirship" instead, which would at least put people on notice that you are claiming an inheritance. You could deal with a probate later if needed.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
www.mineralhub.com
The Mineral Hub
Lease monies received during 3 year lease period? Asked 07/25/2015
Q: When you lease your land, example $500 an acre, for 3years, (only owning one acre) what would be monies paid during the 3 years.? Lease only. My royalty is 3/16th, and I know how that works; just not the lease; how much and how often .. Is it like leasing a car..? i.e., $500 a month for 3 years (per acre)..?
A: The $500/acre you referred to would be the "signing bonus" and it's a one-time payment they make to you after you sign the lease. If they drill a producing well within the three years you will also be paid a 3/16 royalty (usually each month) on your proportionate share of the oil and gas produced from the well, for as long as it, or any wells later drilled, continued to produce.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
www.mineralhub.com
The Mineral Hub
3-year lease with 2-year option? Asked 07/22/2015
Q: If you have an OGL, that has a 3 year term with 2 year option, and an operating well does the oil company have to resign and pay bonus or are you considered hbP?
A: If they commenced a producing well within the first three years, then no, they do not have to re-sign and pay you another bonus. Keep in mind also that it was their "option" to extend anyway, not a requirement. If they had not drilled a producing well in the first three years they could have walked away if they wanted to, or they could have exercised their option to renew for another two years, in which case they would have needed to pay you the agreed-upon extension bonus, if any.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
www.mineralhub.com
The Mineral Hub
Option to buy mineral rights received... Asked 07/21/2015
Q: i have received an option to purchase mineral rights on my 77 acres in kentucky the option is $ 1.00 for exclusive option to purchase all oil and gas rights to property for 90 days . my question isnt this a very low option price and too long an option period . ?
A: I'd have to see the option contract to be sure, but in many (most) cases these option contracts are not in your favor and will simply tie up your minerals for 90 days so you can't sell them to anyone else during the period. Yes, $1.00 is a low price to procure an option. The guy is asking to tie up your mineral rights for 90 days while he searches for a buyer or decides whether he's going to buy them himself. That's worth more than $1.00 in my opinion.

90 days is a long time, but if you want to sell them, and the guy can get it done at a price you want within the option period then it might be something to consider, but not for just $1.00. If you don't know what they're worth however, I'd sure be careful about selling them for just any old price unless you know for a fact the buyer is reputable and will not take advantage of your lack of expertise.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
www.mineralhub.com

Explain terms of lease offer? Asked 07/21/2015
Q: I have received a letter for a lease agreement for property that I know nothing about. How can I first verify they are contacting the correct person? They have given 5 options which I totally don\'t understand. 1)$2000 per net acre delivering at 81.25%NRI 2)1900 per acre delivering at 80% NRI 3)1700 per net acre delivering at 78%NRI 4)1300 per net acre delivering at 75% NRI 5)committed to one of the above options based on title verification.They are proposing a 3 year lease based on existing production to be determined its interest pursuant to one of the before mentioned 5 options. I have no idea what any of this means. Can you help? they state the offer is good for 14 days.
A: They probably did a cursory check of the county records and determined that you or a relative owns some mineral rights in the area they are wanting to lease. That's why they contacted you.

The five options involve the signing bonus (i.e. $2000/acre etc.) and the royalty share of the production they are offering you (81.25% NRI etc.)

The royalty would only be paid in the event a producing well were drilled. The royalty could have been more clearly written as "3/16" (instead of 81.25%), or "1/5" instead of 80% NRI etc. but basically the more signing bonus (a one-time payment for signing the lease) they offer you, the less they are willing to pay in royalty later should a producing well be drilled during the term of your lease. (100%-81.25% = 18.75%, which is the same as the fraction 3/16 etc.)

3/16 royalty means if a producing well is commenced during your lease term, they will pay you (usually each month) your proportionate share of 3/16 of the money they receive for the oil and/or gas produced from the well. This would continue for as long as there is continuing production from the leased premises (from that well, or any later wells that are drilled). 1/8 royalty (not one of the options they gave you apparently, but very common) is simply a smaller piece of the production revenue "pie" than 3/16. 1/4 royalty would be a bigger piece.

In this case I would suggest taking the "middle" ground" $1900/acre and 1/5 royalty. If you instead chose the slightly larger signing bonus and smaller royalty ($2000/acre and 3/16) you'd do better up front, but if a good well were drilled during the lease you'd get slightly smaller checks each month for that. Taking the $1300/acre bonus and 25% (100%-75% NRI = 25%) royalty would pay off only in the event a really good well were drilled, as you'd receive more royalty income over the long run than you would lose by accepting less bonus up front.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
OGL expired without drilling. Why did they even lease then? Asked 07/20/2015
Q: My royalty lease expired and BHP chose not to extend. I found out that no wells were in my sector therefore no production. BHP chose not to put in wells for whatever reason. As far as i can tell the area is still pumping natural gas but has slowed a bit due to economy. I guess one of my questions would be why the gas company chose to buy the lease in the first place if they didn\'t plan to drill? Next, how can i predict the future? the land is in Cleburne County Arkansas.
A: It's not uncommon for a company to lease your minerals and then not drill the lease before it expires. Happens all the time, and some mineral owners don't mind at all, as they are able to lease again and again over the years and collect lease bonus.

Perhaps they reduced their drilling budget after buying your lease and thus had to "drop" some areas they had planned to drill. Lots of things could have gone into their decision.

As to how to predict the future. I would suggest your name would need to be G-O-D in order to make that happen as many "mere mortals" have tried and failed to correctly predict the future of oil prices, drilling activity etc. over the years.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Lease offers. Which to take? Asked 07/20/2015
Q: Just received a lease agreement for mineral rights on property owned by my dad\'s family. My sister and I are the heirs.\nTwo options given: $75 per acre at 3/16 or $125 per acre at 1/8.\nWhat does it mean and which one should we take?
A: If the area is fairly active (i.e. producing wells within several miles of your property etc.), I'd take the $75/acre and 3/16. If not, I'd go for the higher bonus and smaller royalty of 1/8 since in an inactive area the bonus is all you might receive for signing the lease unless a well is drilled (less likely in areas already pretty devoid of wells).

3/16 royalty means if a producing well is commenced during your lease term, they will pay you (usually each month) your proportionate share of 3/16 of the money they receive for the oil and/or gas produced from the well. This would continue for as long as there is continuing production from the leased premises (from that well, or any later wells that are drilled). 1/8 royalty is simply a smaller piece of the production revenue "pie" than 3/16.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Confused aunt needs more information to sell or lease. Asked 07/16/2015
Q: Would greatly appreciate a good estimate for mineral rights sale value for section 24 Township 16n Range 6E in Lincoln County, Oklahoma . My 87 year old aunt has been sent a letter to request her selling it, but she would rather get lease payments like her cousin. My aunt has only received one payment last year, and is confused on many levels: why is her cousin getting payments and not herself; how much does she owns since it was originally her grandparents and it went to her mother and 4 additional siblings , which also have kids. I am struggling to find out how much she owns and if it is a good deal for her to sell. She has one heir if she she pass away at her age. How can I help make an educated choice? What would make a company want to buy this land if it has no active production. I tried to look for active permits to drill.
A: If you want to help her make sure she sells them for a fair price then have her list them on this site (The Mineral Hub) and we will help her find a reputable buyer. She would need to find out how much she owns first though, because buyers will also want to know whether it's enough to consider buying. Apparently the company who sent her the offer may have already done that research. If not, they will probably ask her to do it.

There is no current well on the section that I can see, so I would expect her cousin owns minerals in another section. Likely if she is unaware of how much she owns it probably isn't much. Just because there is no well doesn't mean they aren't worth something to a buyer.

The Mineral Hub
Lease expired but now receiving royalty? Asked 07/14/2015
Q: My contract expired in 2011 with Chesapeake , but somehow Beacon Power got a hold of the contract and is now sending me royalties. However I never signed a contract with them, nor did anyone in our neighborhood.
A: Likely a well was drilled under the lease, and Beacon Power is purchasing oil and/or gas from the well and is thus paying you royalties on your share. There should be a number on the check you can call to ask them if this is the case or not.

The Mineral Hub
Leased property but want to sell mineral rights Asked 07/10/2015
Q: I have approximately 10 acres of a section and have leased my part. I have a different company wanting to buy my mineral rights. Do I have to get anyone else\'s signature to do this, and will I be in violation of my lease if I do decide to sell.\nThank you
A: You can sell, even if they are leased, or even if they are leased and also producing oil or gas. You can sign the deed if you own the mineral rights, and apparently you do since you signed the lease.

Hope this helps.
The Mineral Hub
Should final decree be indexed against all sections listed? Asked 07/10/2015
Q: Recently I have been overlooked for lease offers. I own mineral interests in several Oklahoma counties and sections. My attorney filed a Probate Order listing all sections I inherited in all counties. Recently a landman called and I realized that Lincoln County, OK County Clerk only files in one section with \"OL\" following the section number, meaning \"other land.\" Anyone searching for mineral owners, if they don\'t know my name, would only find me in the one section where this was filed. The landman suggested I file an Affidavit in each section. Do you know where I could find an Affidavit of this type?
A: You could file an "affidavit of ownership" yourself if it turns out to be necessary, in order that people may discover your ownership/inheritance when searching by section, rather than just by your name or by the one section they did file the probate in.

You could include on the affidavit the "Exhibit A" from the final decree that lists all of your mineral rights in Lincoln County, or could simply reference the book and page where the probate (final decree actually) is filed on the affidavit. The county clerk would (or should) then index the affidavit (i.e. "reference" it) in the index book for each of the sections involved so that anyone searching by section rather than by name would be able to find the probate and the complete list of minerals in Lincoln County.

I took a look under your name in Lincoln County, and found a Final Decree ("Order Allowing Final Report and Determining Heirship and Final Decree of Distribution") listing (in its Exhibit A) mineral rights in several counties in Oklahoma (as you mentioned), including Lincoln.

Since you filed the final decree of record with the the Lincoln County Clerk, the minerals in Lincoln County therein listed should have been "indexed" in all the sections involved, not just the one. This was apparently not done, as you suspected, and thus anyone searching by section rather than by your name would not be aware of most of your ownership unless perhaps you have leased some of them since inheriting them.

I would check with the county clerk in Lincoln County to make sure they plan to "index" the Exhibit A from that final decree against all the sections involved at some point, as I think they should do. If they don't, then you could file an affidavit of ownership as mentioned above, and have them index it against all the sections listed so that those searching ownership in those sections would be aware of your inheritance.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Activity in Pittsburg County, OK Asked 07/09/2015
Q: My father died in 2010. How can I find out what activity has occurred with his mineral rights? He listed his mineral rights in his Will as the following\n\nPittsburg county sections 8,9,10,11,14 and 15\nHaskell county section 6\n\nI would appreciate any help you could give me.
A: The Oklahoma Corporation Commission is the State regulatory body for oil and gas in Oklahoma. On the OCC website (www.occeweb.com) you can search for drilling permits, completion reports, as well as current or past production figures for wells near where your mineral rights are located. You'd need to have the legal description handy (Section, Township, Range) in order to narrow your search down to the correct area. You could also visit the county clerk's office in the county where your mineral rights are located and search for recently-filed oil and gas leases in your immediate area since leases are also a good indicator of the activity in a given area.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Value of mineral rights in Utica Shale? Considering Selling. Asked 06/30/2015
Q: I\'m considering selling my mineral rights. I was hoping that you might be able to help me put a value on them? I\'m hesitant to list them without having an idea of their value first. Located in SW Mahoning County, Ellsworth OH, 44416, Utica shale play. This is a non producing, non drilled property.
A: Thanks for the question. Since we are only vaguely familiar with pricing in this area of Ohio, we would likewise be hesitant to list them for sale on the Mineral Hub unless you have an idea of what price you will accept, or are willing to accept our buyer's judgement on what they are worth once we get some offers for you.

We have reputable buyers we've worked with before in the Utica Shale area who would likely be willing to put together an offer as long as they felt the mineral owner would be reasonable in their expectations. It does take some effort on the buyer's part to put together an offer, and so they will be hesitant to make an offer unless they feel the mineral owner will be reasonable in their expectations.

There is some trust on the seller's part involved in the latter of course, but our goal has always been to get as much as we can for the mineral owners who choose to list with us, as we are paid a percentage of the purchase price (which the buyer pays us). The higher the price, the more we make as well. We accept and pass on to sellers only offers from buyers we feel are reputable, which tends to weed out "lowball" offers.

I can tell you that if they are not currently producing or leased they will not be worth as much as you might imagine, or have heard at the local "coffee shop". If they are already producing, buyers would tend to offer a multiple of between 36 and 60 times the average income produced over the past six months. Just a rule-of-thumb, but one that is commonly used by buyers to value producing mineral rights. The multiple could be higher in cases where there is more than one well involved, or a permit for a new well has just been issued.

In cases of recently leased, but not producing minerals, buyers will often offer 2-3 times the lease bonus received unless a well has already been permitted, in which case they might offer more.

In areas with which we are not familiar, we feel it's best to let the buyers who are familiar with the area determine the market value, and of course we "vet" them to help ensure they are legitimate offers in the first place. We don't like buyers who lowball our sellers any more than our sellers do. We also need our sellers to be reasonable in their expectations though of course, as it takes some time and efforts for a buyer to properly evaluate a property, and "time is money" as they say. Buyer's don't want to waste their time (or yours, mine) either.

If you'd like to go this route (i.e. be willing to accept the highest offer we receive, from a buyer we feel is reputable) we'd be happy to list them for you. If you'd like to wait until you have determined what they might be worth on your own that's fine too. We unfortunately do not do appraisals in areas we are not familiar with.

You could hire a local landman to help you value them if you wish, but I'd be cautious and assure his interests are aligned with yours before doing that. Some landmen also work closely with buyers in a given area, and you'd want to be sure any valuation you receive is objective, rather than geared to getting you to sell to one of his "buddy" buyers.

If I were going to hire a landman, I'd look for one that is an active member of the American Association of Professional Landmen, in addition to being either an RPL or a CPL (AAPL certification). Landmen who have achieved those certifications have agreed to abide by the organizations ethics standards. You can do a landman search for your state on www.landmen.net. When contacting a landman, ask if they are a AAPL member or a CPL, RPL etc. If they say yes, you can then contact AAPL to confirm before hiring them, and I would suggest doing so as some have been known to claim they are currently certified when in fact they aren't (or are no longer are).

That said, there are plenty of good landmen who are not members of AAPL and who are not CPL, RPL etc. but if you are not used to dealing with landmen it might be best to do as I suggest and stick with AAPL members who are certified. RPL's and CPL's each have taken tests with APPL to ensure they "know what they are doing" and have also agreed to abide by the ethics standards of the AAPL.

Hope this helps you out.
Frederick M. "Mick" Scott
The Mineral Hub
Activity in Caddo County Oklahoma? Asked 06/27/2015
Q: Wondering if there is any known activity in the Ft. Cobb area of Caddo County, OK. \nAny answer is appreciated. Thanks.
A: The Oklahoma Corporation Commission is the State regulatory body for oil and gas in Oklahoma. On the OCC website (www.occeweb.com) you can search for drilling permits, completion reports, as well as current or past production figures for wells near where your mineral rights are located. You'd need to have the legal description handy (Section, Township, Range) in order to narrow your search down to the correct area. You could also visit the county clerk's office in the county where your mineral rights are located and search for recently-filed oil and gas leases in your immediate area since leases are also a good indicator of the activity in a given area.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Bonus paid on entire unit or just what I own within? Asked 06/26/2015
Q: My brothers and I have a 12 acre royalty that has been \'pooled\' into a 640 acre unit. My question is if the bonus is based on our 12 acre portion or based on the 640 acre pool unit?
A: The bonus will be paid according to your proportionate interest within the pooled unit. If you own 12 acres within the unit, your bonus will be paid on your 12 acres, not the entire 640. If you were paid on the entire 640 then those who owned the other 628 acres would not get paid would they?

The Mineral Hub
Oil and gas lease royalty not paid? Asked 06/23/2015
Q: I was recently contacted by a landman regarding heirship to mineral interests. It appears my grandmother (died 1994) owned some mineral rights in Rusk Co., TX., and according to her will, her estate was divided equally between 4 surviving children. One of these children, being my mother died in 1998. According to the landman, the oil and gas company obtained signed leases from all of the children (or surviving children for those deceased) in or about 2008, except for my mother\'s heirs. They JUST discovered she had been omitted in signing a lease on her portion because a different landman just found her in court records in a neighboring county, Landman now has sent standard Oil, Gas and Mineral leases to be signed by myself and my three siblings (her heirs). My cousins have been receiving royalty checks since 2008, so my question is... do my siblings and I have any recourse in collecting retroactive payments? Thanks for any responses in advance....this is all new to me.
A: I'd get with an attorney on this one if the income since 2008 justifies it. If your minerals are within the current drilling and spacing unit you should be paid for the production since 2008 assuming the statute of limitations has not expired. If the company has been paying the interest of your mother's heirs to others since 2008 they might ask you to "reclaim" it from those people unless you can show the oil company should not have paid them. This is where the attorney will come in handy. I wouldn't sign the leases until the issue of potential past royalty payments has been addressed.

Frederick M. "Mick" Scott
The Mineral Hub
When was the Duhig Rule written? Asked 06/22/2015
Q: what year and dated did the duhig rule take effect?
A: See this link for your answer:
http://lmgtfy.com/?q=When+was+the+duhig+rule+created%3F+
Can a landman prepare a deed for me? Asked 06/21/2015
Q: My deceased father had mineral interests in WV, now under control of his widow/executrix, who would like to now transfer these interests to me. Can a WV landman prepare the appropriate deed for this transfer or do I need a WV lawyer for the process? Thx.
A: You could have a landman draft the deed, though technically you (perhaps with "help" from the landman) or an attorney should do it as a landman cannot legally prepare a deed for anyone other than himself, unless he is also an attorney. A deed is a "contract" and thus if a landman actually drafts the deed, rather than using a template etc., he would be practicing law without a license in many states.
Do I have mineral rights or not? Asked 06/18/2015
Q: My deed does not say I do not have mineral rights but I got a letter saying that the big landowner sold the property reserving the rights forever I guess. At least one person owned the property before I bought it. It may have been purchased and sold by the Feds?
A: If the "big landowner" reserved all the mineral rights, then you do not own them. If the mineral rights had not been reserved and the "big landowner" sold the land to you, you would have received the mineral rights he/she owned at the time of the sale. If there had been no mention of minerals then when the "big landowner" sold the land any minerals he/she owned would have gone with it.

Hope this helps you out.
The Mineral Hub
How to find out how much money is in a POOL accounts Asked 06/15/2015
Q: My Mother has some mineral rights in Weld County CO and in 2012 the landman was unable to find her to sign a lease so we understand she has some back pay in a pool account. They want her to sign a new 3 year lease going forward and once that is signed, they can release the back pay in the pool. How can we find out how much she is due without signing a new lease?
A: She should be able to get paid for the FIRST lease without having to sign a second lease in my opinion. She will need to prove to them that she is the owner of the mineral rights that were leased of course, but sounds like the company already knows that.

Once she gets paid for the first lease then she can consider signing the second lease. It shouldn't be a prerequisite in my opinion, and I'd ask them to explain why they are insisting it is. The fact that they won't even tell her how much she's due also troubles me.

Tell the landman you will need to ask your attorney whether he/she thinks it's necessary for your mother to sign a second lease before she is paid on the first one. I'd ask the landman exactly why she "needs" to sign the second lease before being paid on the first one as well. If the explanation doesn't make sense, it's probably not valid.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Oil Company Buying Lots of OK Mineral Interests Asked 06/09/2015
Q: An oil company has been buying up every available mineral interest in concentrated areas of two Oklahoma counties over the past couple months. They are paying high bonus amounts, and all royalties are set at 3/16. They are happy to negotiate other terms in order to get the interests. What does this mean?
A: It means it's time for you to buy a new car ha ha! Well that, and it means they are very interested in acquiring leases in the area, for whatever reason. Perhaps a big oil or gas discovery was made nearby recently, or a nice well came in.

Keep in mind that no matter what terms the lessee (oil company) agrees to in order to get your lease, you may have to take them to court to enforce them. Happens all the time, and the class action lawyers love it!

Not a big fan of royalty class action lawsuits myself, as most of the time it seems only the lawyers, a few "select" plaintiffs, and the (yes) defendant come out ahead in these things. Better to just get as much money and royalty as you can up front and hope for the best on the clauses.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Change Ownership Oil and Gas Leases Asked 06/08/2015
Q: Uncle died testate in 2002. Left 5 oil and gas properties to nephew. Nephew has since died intestate. How do we find out the names of managing companies of these leases (info I have dates back to 2002) so we can begin process of transferring ownership to nephew\'s heiars?
A: It is not the job of the oil companies to transfer these rights to the heirs, it is the heirs job, and they will need to probate the decedent's estate in Oklahoma in order to transfer the rights and have marketable title to them. This is true even though the decedent died "intestate".

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Corrected affidavit of heirship Asked 06/04/2015
Q: While going through some old documents, I found an undated check stub in the amount of $19.67 from Helmrich & Payne to my grandmother. Since the amount is so small, I am assuming this is a royalty payment and not a lease bonus, but since the stub is undated and I have not been able to research a complete history of production records, I am really unsure. I DO know that my grandmother owned mineral acreage in Section 27 of T8N-R3E of Pottawatomie, OK (specifically in the S/2 SW/4) and I was able to find, online, an Affidavit of Heirship filed in 1985 pertaining to my grandmother and her death, wherein, I believe, the affiant is a daughter of my great uncle. The Affidavit correctly states that my grandmother was predeceased by her husband and that they had 2 sons, both of whom also predeceased her , one of them being my father. The Affidavit further correctly shows no heirs for my father\'s brother, as he never married and had no children and list one child, myself (albeit I am incorrectly identified as a Jr.), as being the sole and only heir of my father, BUT the problem is that it indicates that I ALSO predeceased my grandmother (with date of death unknown) which \"left\" , as her next closest living heirs, her nieces and nephews (her brother\'s 4 children---one of them being the affiant). I have subsequently found, online, that, from 1980s until present, several leases have been taken in the names of her nieces and nephews (even their heirs/assigns) covering my grandmother\'s interest. I live in Mississippi so I am at a disadvantage in that I can\'t physically visit the records room and run title, etc. but I prepared a Corrected Affidavit of Heirship and it has been filed of record in Pottawatomie County, but what should I do and where do I begin to correct this? Any guidance is deeply appreciated.
A: There is currently one well producing in 27-8N-3E, though it includes only the NW/4 of the section so doubt you'd be a part of that one anyway, since you stated S/2 SW/4. It is not operated by H&P. I agree the check was probably a lease bonus. It may include the well name on it as well so at least you'd know the well it came from. Might be in another location than Section 27.

I noticed that there has been some leasing activity in this section previously, with the most recent being in 2013. The corrected affidavit you filed should put future landman on notice that you are in fact still alive and well. Hopefully you included your contact info on the affidavit as well so they'll be able to reach you in the event someone wants to lease the minerals again.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub

Missing Lease Document in Texas Asked 06/02/2015
Q: I inherited mineral interest from my parents, when they acquired their mineral interest a lease was already in effect and they did not receive a copy of the lease.\n\nHow do I obtain a copy of a lease when I don\'t know the names of the parties involved.\n\nDoes the current operator have to legally provide me with a copy upon request?
A: Current operator is not obligated to provide you with a copy of the current lease, though they might do so if you ask them nicely and give them some time to dig it up. Try their owner relations department number first, usually found on the royalty check stubs (assuming there is a producing well currently). Get an email, or give them yours. This will often produce better results when asking for copies of documents.

Alternatively you can visit (online or in person) the county clerk's office in the county where the mineral rights are located. The deed where your parent's acquired the interest would be on file there, and you could find the other people's name that way. The lease would also be on file there under the company name and the grantor's name. If you can't find the grantor's name you'd look under the company name in the grantee/grantor index book to pull a copy of the actual lease.

Another method, which is also much easier, but not free like the county clerk's office, would be to contact a local abstract office in the county and ask them to send you a copy of the lease. They'd need the legal description of where the mineral rights are located, and probably your parent's names as well. They would of course charge you for their time in finding it.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Deed question...reserving mineral rights? Asked 06/01/2015
Q: I live in California, I am a executor to a trust which contain 55 acres, the property is currently in escrow which will close in three weeks. the question is how do I input into the new deed that The trust will retain 50% of the mineral rights and the person buying the land will receive 50%. I thought the title company would add it to the new deed of trust, but they informed me they do not. want is your suggestion on how and what forms I need to complete this transaction and to have it recorded.
A: "Less and except 50% of the mineral rights owned by Grantor"; or perhaps "Grantor reserves from this conveyance an undivided 50% of the mineral rights owned by Grantor under said lands".

Basically you just want to include a mineral reservation of some kind stating the trust is keeping (reserving) 50% of the mineral rights owned by it under the land being sold.

I'd get an attorney to draft the deed for you as it really needs to be worded correctly for your particular situation. "50% of the mineral rights under said land" vs. "50% of the mineral rights owned by Grantor under said land" could describe two different acreage numbers for one thing.

You can legally draft a deed yourself of course, but would risk not being clear etc.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Keep or sell mineral rights? Asked 05/30/2015
Q: Hello. I just came across this website. We live in PA and my mother-in law wants to sell her property and keep MR. Currently the rights are in her name and her deceased husbands name. People are approaching her about the property and of course want the rights transferred during the same. They haven\'t even begun to go under her property yet which is 7 acres. So my questions are: 1.) Do most people keep the rights when selling the property? Should we obtain a separate attorney from our realtor and add myself and my husband as owner of the rights, or put them in our name and our children\'s names? I just want to make sure that whatever happens in the sale of the property that we keep the rights! thank you. \n\nJennifer Bowman
A: If your mother-in-law wants to keep the mineral rights when selling the land she can simply "reserve" them (i.e. "less and except all mineral rights" etc.) in the deed, or state on the deed that she is conveying surface rights only etc.

An attorney or her realtor could draw up the deed if she is not sure of the exact wording to use, or she could likely find an example online somewhere (to use at her own risk).

Do most people keep mineral rights when selling their land? Not always, but many do. In less active areas it's common to sell them with the land. In active areas not so much, or at least value is added for them in the sale price if they are sold along with the land.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Mineral rights scam? Asked 05/21/2015
Q: We were cold called by someone claiming to have found mineral rights owned by our deceased father. He is trying get us to sign an oil and gas lease. He sent papers for us to sign that on first appearance looks legitimate but he put in a W-9 form that asks for my SSN and also has never proven to us that my father actually owned this said land that my sold but not the mineral rights. He said there is a deed included but all he gives is the indexing instructions. I just don\'t know enough about all this to know whether or not this is just to get my identity. My mother never heard of this land purchase or of it being sold. He wasn\'t even out of college when this purchase was said to have been made. I\'ve looked up his company but it only says it\'s been open for a year.
A: If they are just leasing you they don't need your SS# at this point, though some companies ask for it up front before they pay the bonus. Doesn't mean you have to give it. At worst, they would just have to withhold taxes from what they pay you for the lease bonus, but would still pay you something. Most lessees will pay the full bonus once they verify your ownership (usually 30 days) and then send you a 1099 tax form the following January for tax purposes.

You might want to read our "leasing tips" article in the Mineral Hub News section of this website prior to agreeing to lease to them.

The Mineral Hub
Operator changed without new lease Asked 05/21/2015
Q: Company X released their rights to the lease in April 2015. Company Y expressed an interest in leasing in May 2015. A check of the Oklahoma Corporation Commission\'s Well Data System lists Company Y as the operator of the wells. If there is no lease in effect with Company Y, how can they be the operator? Are they required to do remediation work if we don\'t reach a lease agreement with them? \n
A: Company "Y" (so mysterious!) can still be the operator even if they didn't actually buy a lease from you. Likely some other company has your lease and assigned their rights to Company Y. Perhaps Company Y was chosen as the operator by the other working interest owners in the well because they felt they would do a better job. It's also possible that you were "force-pooled" (i.e. leased without a lease being signed) by Company Y and then they drilled a well off of the pooling order. The forced-pooling order would be on file with the OCC if that's the case.

The Mineral Hub
Mineral owner number changed? Asked 05/19/2015
Q: My owner number changed why
A: Is that a question, or a statement? Not much to go on there I'm afraid.
Dewey County, OK Offer to Buy My Mineral Rights Asked 05/15/2015
Q: I own 20 acres of mineral rights in Dewey County, OK. I received an unsolicited off to purchase all or part of my mineral rights for $3000/acre. I have not responded yet. What is the best way to handle this offer? How can I find other companies that might offer more? The rights are in section 11, 19N, 16WIM.
A: Post your minerals for sale on the Mineral Hub if you are looking to sell them. We will help get you some offers if anyone is interested, and then you can decide whether to accept any of the offers we receive or not.

The Mineral Hub
Leasing activity in Wagoner County, OK? Asked 05/14/2015
Q: Is there Leasing Activity in Wagoner County Oklahoma?
A: Hardly any currently.
How does son of former operator release O&G leases? Asked 05/13/2015
Q: We invested in an oil well. Several years ago, the operator stopped working the well. He has now passed away and left his son as executor of his estate. Without going into the long story, he needs to grant a release of the leases on the well so that they can be purchased by another party. He has no idea how to grant the release. Please tell me how to grant release of the leases so I can pass the information on to him.
A: If the well is currently producing in paying quantities, then the leases are still active, if not, then the leases have already expired and thus really don't need to be released.

If the leases are active, then there's no need to "release" them in order to sell them to another party. He can just sell them and the new owner would take them over. That said, filing a "release of lease" is often just a one-page document stating that the current lessee (usually the operator) is relinquishing all its right to the leases in question.

Releases are only necessary for "active" leases of course. If there's been no production for a long time then the leases have likely expired by their own terms, and thus there's no need to "release" them.

He really should consult an attorney on this however, since I don't really have much info here and so can't provide a very accurate answer I'm afraid.

The Mineral Hub
What should trustee do after trustor passes away? Asked 05/12/2015
Q: My mother had numerous O&G rights in OK and TX that she placed in a trust. She has passed and I am the trustee. How do I go about changing the mineral rights into my name? Some of the properties are producing and some are inactive and not leased.
A: The trust document usually dictates what happens once the trustor is deceased, and how the trustee should proceed. Normally the trustee would prepare a "trustee's deed" to convey the trust assets to the "remaindermen" of the trust and then the trust would be dissolved.

I would suggest running your question by a family law attorney as he/she could take a look at the trust itself to see what it says, who the beneficiaries are/were etc., and proceed accordingly.

The Mineral Hub
How do I get mineral rights under my land? Asked 05/10/2015
Q: My grand father brought land and the owner keep the meneral rights for himself and his heirs well he died leaving no heirs how do I go about getting the meneral right to my land
A: If there is leasing going on in the area then likely the current owner is leased and you could locate them that way. Trust me, someone owns them even if the guy had no heirs.

If the guy your grandfather bought from died without any heirs, then it's anyone's guess who owns the mineral rights now, and if he had no will, then they were passed down by the laws of "intestate succession" for that state. You can "Google" that term to find out more.

At any rate, unless the minerals are in North Dakota, they are not going to automatically revert to the current landowner just because the guy had no heirs. Someone owns them, and you'd need to buy them from the current owner if they're agreeable.

The Mineral Hub
Landowner rights without mineral rights? Asked 05/07/2015
Q: We are looking at purchasing property in northern Colorado. We are finding that mineral rights are not transferring with most parcels. If we purchase land and the seller retains the mineral rights, do we have any say at all in what goes on if they sign an oil and gas lease with someone?
A: Any say? Not really, unless the drilling rig is actually going to be located on your land, in which case you'll likely be able to come to a "surface use" agreement with the oil company, and perhaps receive compensation of some kind for the "inconvenience" of having a rig on your land while they drill. $5000, $10,000 etc. One-time payment usually.

Not really much the landowner can do to stop drilling, since the mineral estate (subsurface) is actually the dominant estate. You can't keep a mineral owner from their oil and gas in other words. Mineral rights would be worthless if no one could get to the oil and gas.

Even if you were able to buy the minerals with the land, if they end up being included as part of a larger drilling and spacing unit a well may be drilled without your consent anyway, since the other mineral owners in the unit would likely want the minerals to be produced. The drilling rig may be on another part of the unit than your land, but your minerals would still be involved whether you leased or not. You'd still be paid for your share of production from the unit of course though (whether you chose to lease or were force-pooled).

Best thing is to own the mineral rights under your land when you can, as most of the complaints I hear about drilling in general are coming from people who don't own mineral rights. Most people who do own mineral rights are happy to have a producing well that involves their mineral rights (whether the rig is actually on their land or not) as it means money for them.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Blank lease form sent to me? Asked 05/03/2015
Q: a landman called and offered X amount for our mineral rights, at I believe 3/16,he never sent a lease stating acreage, royalties, bonus, just a email stating he wanted to lease . I ask him on several different occasions to send a lease offer , what he finally sent was a blank form I could easily copy off the internet. He then wanted us to fill in everything. We had literally nothing to go by far as what was being offered , and we feel the oil company/landman should have given us a written offer. Then we found out that there was a major disagreement on the amount of acreage being discussed. We finally stated that if he wasn\'t going to send a lease filled by the oil company what they wanted then we should just move on. That is when he threatened to force pool. So we really don\'t know what is going on because no written information was ever conveyed to us, no offer, other than a complete blank fill in the lines form. Now what?
A: Many lease offers do come in over the phone. If you agree to the terms offered, they will usually send you a lease all filled out with the terms you agreed to.

If he sent you a blank lease to "fill in" that could work really, if you knew what you were doing. Most of the time they'll send "their" form once a verbal agreement on terms is reached. Perhaps the "blank" lease was just for your review and he would have eventually sent one all filled in with your name, their name, the royalty, expiration etc.

As to acreage, it's quite possible they won't know how much you own prior to leasing you anyway. Much of the time a company will have to check the records to determine exactly what you own, and before paying you of course they'll want to make sure of what you own. This is why they like to use "bank drafts" to pay you. The common "30-day" drafts give them time to verify your ownership before paying off the draft.

If he "threatened" to force-pool you, that's unfortunate, but is a possibility if you can't come to terms on a lease. Sounds like you all had communication issues, and perhaps he should have explained the leasing process more clearly to you from the start.

Forced pooling is not always bad however, it just depends on the terms offered in the pooling. Often they are about what was offered for a lease, though the pooling is for a shorter period of time. I prefer to lease when possible though as I have more control over clauses, additional provisions etc.

The Mineral Hub

Force pooling without planned well? Asked 05/03/2015
Q: can a company force pool that does not have a oil well planned for a couple of years?
A: A company can apply to force-pool anytime really, though most will not bother unless they plan to drill prior to the expiration of the pooling order.

The Mineral Hub
Land Owner has lease question... Asked 05/03/2015
Q: We bought our ranch very recently. We don\'t have any MI in the land and we understood the wells left on the property were abandoned. Especially since there was no lease on record with the county clerk office and the property had been vacant for 10+ years. . After doing A LOT research, we learned the MI were left to two family members. My questions are;\n1. As the land owner, do we have rights regarding leases on our property?\n2. Is it common/legal for leases to be drawn, signed and filed without any notice to the land owners?\n2. Three leases have been filed this week (after I contacted the Operator of the wells to let him know we purchased the property and ask to have a leak cleaned up.)\n3. The parties listed on the leases, are not the last people the MI was deeded to. Doesn\'t ownership have to be transferred?\n\nAny information is greatly appreciated. :-)\nThank you,\nJeannett
A: The landowner is not usually notified when an oil and gas lease is signed, and the landowner (unless also the mineral owner) really has nothing to say about whether the minerals under the land are leased or not since the subsurface minerals are actually the dominant "estate" as well as being totally separate from the surface estate.

Ownership can be transferred of course, but if no record of the transfer exists in the county records that would put people on notice of who they were transferred too, then perhaps the oil company though the people who signed the leases were still the owners of the mineral rights.

The Mineral Hub
Quit Claim Deed (Minerals) transfer to LLC? Asked 04/30/2015
Q: I want to trasfer my small % interest in Tuscaloosa, AL minerals (gas) from my name to my Limited Liability Company (\"LLC\"). I obtained this interest from an estate that was disbursed and then inactivated more than 20 years ago. I get monthly production checks from Saga Petroleum LLC of Colorado, who is producing gas under its lease. The only legal discription I know of is the Township, Range and Section number indicated on my monthly check statments.\n How can I handle this transfer in order to avoid the probate of my estate just to get this small mineral interest transferred to my LLC.
A: The title of your question is the answer. Quit-Claim Deed. Would help if you knew the "tract" within the section (i.e. which PART of the section...NW/4, SW/4 etc.) but you can draft a deed with just the section number that would be valid, though the county clerk may have an issue with you not "narrowing it down" to a specific part of the section the mineral rights are actually under.

You could probably contact the operator of the well, or the company paying you to get the "tract" information. You could also find it on the oil and gas lease, which would be filed of record at the county clerk's office if you don't have a copy.

The Mineral Hub

The Mineral Hub
Existing royalty- selling surface and a portion of minerals Asked 04/29/2015
Q: How is existing royalty handled on a property when selling surface and 40% minerals/executive rights.\n\nCan an owner retain royalty that is currently in place?,\n Then divide any \"new\" royalty with the new surface and mineral owner.\n\nThanks\n\n
A: You can retain (reserve) all or some of the "royalty-in-place) when selling if you wish. Up to you.

The Mineral Hub
How do we get a company to lease and pay royalty? Asked 04/28/2015
Q: We recently purchased 4 acres with the mineral rights. The previous owner did not lease the mineral right even though there are many wells around. We want to lease and we contacted the current well companies and none are interested. What does it take for us to get a lease and receive royalties for the gas under our property?\n\nThanks
A: Well, frankly, it "takes" someone being interested in leasing to get a lease, and it then takes the lessee drilling a producing well to get royalties. No one is "obligated" to lease your mineral rights of course. If you want to drill your own well you could of course from a unit and then lease everyone else in the unit yourself, but most people don't have the $$ to drill their own well and would rather lease their right to drill to an oil company.

Likely there will eventually be interest in drilling your minerals so I'd just sit tight and wait to be contacted rather than "cold calling" potential lessees. Doing that only puts you at a negotiating disadvantage. You'll do better if they actually want to lease you.

The Mineral Hub
Taxable value of mineral rights in 1984? Asked 04/24/2015
Q: For tax purposes...how do we determine what the value was when our Father deeded them to us in 1984?\nThank you for any suggestions you can give us..
A: Good question. If they were producing in 1984, and still are today, they were probably worth more than than they are now since production has probably declined. You could subtract the average income per month back then over a six-month period from the same today and the difference would be the increase/decrease in their value since 1984, albeit an approximate one.

Not easy to determine 1984 value really, that's the sad truth, especially if they were not producing income then, or now. Best way would be to try and find "comparable sales" that occurred on similar mineral rights in the area back then. Probably not an easy thing to find though, but perhaps a landman who was familiar with the area back then could venture an "educated guess". An attorney could help you find someone to do this if not himself/herself, but it wouldn't be "free" most likely.

Sorry I can't be of more specific help, but I think in most cases going back that far people just make the best "guess" they can.

Hope this helps you out (a little)!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
"Inherited" minerals actual sold previously? Asked 04/23/2015
Q: My wife inherited minerals from her father. A company wanted to lease her 20 acre share. We signed the lease and the company later withdrew their offer saying her mineral deed from 1991 was not valid because the guy had already signed or sold the minerals in 1968 to someone else. essentially, he sold the same minerals twice. Do we have any legal recourse or any rights to minerals, and how does this happen? Thanks in advance.\n\n\n
A: Likely the 1968 sale was not discovered until they "ran title" on your wife's minerals. This is why most companies to pay by "draft"; as the period until the draft is due gives them time to verify what is owned.

If you wanted to "double check" their title work you could of course visit the county clerk's office they went to and pull the same documents they did. If they were really sold in 1968 then there's not much you can do really short of showing the sale was not legitimate.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Parent's death and mineral rights not transfered? Asked 04/22/2015
Q: My father died in 2000 and then our mother died in 2014. \nWe just found out about the mineral right and wondered\n how should this be taken care of to put this in our name?\n\n
A: In order to get them properly into your names you will likely need to probate both your parent's estates in the state where the mineral rights are located, assuming it has not been done already, in which case the probate documents (i.e. the "final decree") would state who now owns them.

If you're not sure what they owned exactly, would be best to research their ownership and then include that information in the probate. If you can't find out exactly what they own, then the probate should include a "residual" clause, which basically would cover everything not specifically mentioned.

An attorney could probably do a simple probate for between $2000 and $3000 and would take a month or two to produce the "final decree" from the judge stating who gets what.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Fee for managing parent's mineral and royalty interests Asked 04/21/2015
Q: I have been managing my mother\'s royalty interests for many years. Most are located in the Eagleford Shale area. It is starting to really pay off for her and she has offered to start paying me to do this. What is a fair amount. Her annual income from these interests is approx. 100k per year. Do I charge by hour? By month? By percentage of her payments. At present I hold POA for her and am depositing her checks and signing division orders. Some time as many as 8 in a month and sometimes none. She does not hold any interests where she would be in a position to negotiate a lease. Can you please advise me as to what might be fair. Thank you in advance.
A: If you are just doing her "busy work" occasionally by signing leases, depositing checks, signing DO's etc. then charging by the hour for whatever you think your time is worth would probably be simplest. If you've actually learned how to properly NEGOTIATE leases (i.e. effectively bargain for better terms than those offered by default), then you might charge a small percentage (i.e. 2-5%) of her lease bonus for your services instead of hourly, assuming any leases etc. are actually negotiated.

Professional "trustees" often charge a small percentage of income (if any) for "managing" the trust assets.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Proving ownership of Mineral Rights Asked 04/15/2015
Q: Our client\'s father owned oil & gas leases in several counties in Oklahoma. He passed on and his interests went to his wife, who subsequently passed on and their interests went to the daughter, whom we represent. There was a probate done in Oklahoma. However, State of Oklahoma won\'t process claim b/c , we need proof that our client owned these mineral interests in the counties in question. Their claim shows our client\'s name as the owner and we\'ve submitted everything we have relevant to the connection of ownership, including contact with the holders of the properties in question. Now hitting a dead end. What do we do next?
A: I assume your client is attempting to "claim" funds held by the state that were payable to the father or something? Otherwise why would the state be involved at all? It appears the state is asking for "proof" that your client's father at one time owned these leases, rather than asking for proof that your client inherited them (since it appears the probate would verify that, at least via a "residual clause" if not specifically mentioning the leases in question).

If there's any real money involved it would probably just be easiest to ask the state exactly what they need in the way of "proof", and then hire a landman or attorney to go search the county clerk's records for the relevant "proof" they seek.

The Mineral Hub
Entitlement to free gas go with house when sold? Asked 04/15/2015
Q: My daughter is selling her house that was inherited to her. There is free gas to this house. The well is on my brothers property which is across the road from my daughters house. A line was dug across the road from my brothers house to install in my daughters house. Is my brother entitled to this gas since my daughter is selling the house to her ex husband? My daughter agreed to allow this free gas to her ex husband after she left. Can she now in return allow my brother to have free gas? The land that he (my daughters ex husband) has been handed down from my great aunt to my dad to me then I handed it to my daughter. There is nothing in writing that says she \"gave\" her ex the free gas. I am sorry that this seems so confusing and I probably didn\'t explain it very well. Will be anxious to hear from you, and if you can\'t help me could you give me some ideas where or who I need to talk to about this matter?
A: If the free gas goes with the house then whoever owns the house gets it. If it was only free as long as your daughter lived there, then when she leaves, so does the free gas I would assume. Does your daughter have a legal document stating that the house gets "free gas"? If not, then I'm not sure it's really hers to use, or anyone's.

Above is just my $.02. Without knowing all the particulars of exactly how this gas ended up being "free" to your daughter I really can't do more than give an opinion off the top of my head.

Frederick M. Scott
The Mineral Hub
QCD vs. BLM claim? Asked 04/12/2015
Q: My grandparent have the. Deed that was from early 1800s and it was a quitclaim, on the deed it states all they bought including the land and it states is theirs forever and their heirs, does blm have the right to not only make them lease their own land, but take it away for their heirs three years after they passed away?
A: The "quitclaim deed" your grandparents had did not necessarily convey anything to them, since a quitclaim deed only grants what the previous owner had, IF anything. It does not guarantee the Grantor owned anything, which is quite different from a mineral or other deed that actually contains a warranty of title.

If the Grantor on the quitclaim deed did own the stated acreage, then it was transferred to your grandparents by the quitclaim deed. If he/she owned nothing in the described lands, then nothing was transferred.

If the lands were transferred to your grandparents, then no, the BLM could not "force" them (or their heirs) to LEASE their lands, but could potentially "take it away" (by paying market price for it) by using "eminent domain" laws if the land was needed for a highway or something. Usually this doesn't happen though, and you didn't provide much detail on why the BLM was attempting to "force" you to do anything.

My advice would be to consult an attorney and provide him/her with more details as I really can't provide much help here without knowing "the rest of the story".

Frederick M. "Mick" Scott
The Mineral Hub
OGL prices in Divide County, ND? Asked 04/11/2015
Q: Our family has mineral rights in Divide County, ND, that Continental Resources traded/sold and we are now being approached by SM Energy to lease with them. Our current lease is expiring in June 2015. The offer is much lower than 3 years ago and it is difficult to find out exactly what the going sing up bonus should be and the amount to be paid as royalty. Can you assist us in this decision with any current information? We are now being offered $350 per acre, and 18.75% per barrel for 160 acres. Thank you, Sharron Schieble.
A: Lease prices are going to be a lot less than they were just a year ago due to much lower oil and gas prices. You should read the "Oil and Gas Leasing Tips" article in the "Mineral Hub News" section of this website prior to negotiating with them for a new lease. You'll find lots of good lease negotiation tips there.

As for finding the "going rate" there are some tips in the article on that as well, but if you know others in the area who own mineral rights, asking them what they've been offered (if anything) is one good way to determine if what they are offering you is at least in line with what they are offering others.

The fact that you apparently have 160 acres to lease should give you some "extra" bargaining power. See "tips" article for more info about how to use that power.

Hope this helps you out!
The Mineral Hub
Mineral Deed price different than Purchase Sales Agreement Asked 04/08/2015
Q: I received a mineral deed which shows the price to be $10 although the Purchase Sales Agreement show a price of substantially more. I am told this is common practice and the Purchase Sales Agreement is the legally binding document. Is this true?
A: It is in fact common to just put "$10" etc. on mineral deeds. The PSA should contain the actual price though, and you can use that as "evidence" of the amount you're supposed to receive. Hopefully the buyer signed it, and it's not just an "option" to purchase, but an actual obligation to purchase (assuming your title is good.)

A PSA can be a legally binding document, depending on how it's worded. Have your attorney check it out if you want to demystify it.

In the future you might also consider using The Mineral Hub to sell your mineral rights, as we are familiar with all of these types of documents that buyers use, and can ferret out the good ones from the bad ones before any problems arise.

Sincerely,

Frederick M. "Mick" Scott
The Mineral Hub
Inherited oil and gas leases. What to do? Asked 04/08/2015
Q: My mother inherited oil and gas leases from my grandfather, which were dated in the 1950s . My mother died several years ago and we have closed her estate. However, I\'m wondering what to do about these interests--they are recorded in various counties in TX and IL. Should I just throw away the paperwork? contact the county govt. Is there any value to these? There certainly haven\'t been any checks coming. Thanks
A: If they are oil and gas LEASES from the 1950's, then they've probably expired by now (usually back then only good for at most 10 years unless production prior to expiration extended their life).

You might want to check to be SURE none of the leases starting producing prior to their expiration. If you find there is production coming from the leased premises that began before the lease expiration dates, you might want to check with the operator to determine if perhaps they have some money in a "suspense" account.

I'd suggest looking on www.missingmoney.com to see if anyone turned over any funds in your grandfather's name. If so, your mother could claim them assuming she was an heir.

A lease will usually say "oil and gas lease" or similar right on the document. If that's the case here, they'd be filed of record in the county clerk's office as well so you could throw them away if you like as other copies would be available from the clerk if needed.

The Mineral Hub
Mineral rights safe or not? Asked 04/07/2015
Q: In 1999, when I bought my property in NH, I was given a deed with \"full warranty covenants\". Unfortunately, I didn\'t know what I was doing and may have signed another paper allowing the seller to retain mineral rights to the property. However, nothing was placed in the county Registry of Deeds. (Except of course my property deed) I was never given a copy of this paper. (The real estate agent who I thought was representing me, was actually an associate of the seller and kept certain articles regarding the closing from me.)\nDo I still have no mineral rights even though there is nothing in the public records to state such?
A: If the seller retained the mineral rights, there would be mention of it either on your property deed or on the other document you signed. Both should be of record in the county clerk's office. You can obtain copies there if you wish.

Note that a deed is valid even if NOT filed of record, so you should have kept a copy of the "other" document you signed. No way to determine what it was if you didn't keep a copy and they didn't file it of record after you signed it. Most people DO file things of record to put others on notice that they own something, but you said this one was not "placed in the county registry of deeds" so I'm not sure why.

The Mineral Hub
Locate deceased parent's mineral rights? Asked 04/01/2015
Q: My mother passed away and she had multiple mineral rights in NM and TX. She prepared no will and we can not find the paper work. I know what counties they are located in. \n\nHow do I identify the properties so I may present them to the court? \n\nMore specifically, can I request this information via email or do I need make a physical appearance?
A: You could visit the county clerk's office in the counties where the mineral rights are located and then search the records there to determine what your mother owned. You could also hire the local abstract office (the county clerk's office might be able to recommend a good one locally) to do the work for you, for a fee of course. You wouldn't need to show up in person that way.

Certain county clerk's now have at least some of their more recent records online these days on their website, so you might be able to search back 20 years or so that way. If she leased any of the rights you'd probably be able to find her lease by searching online using her name. The lease would also have the legal description of the tract leased, and so if you found one of her leases, you'd also know that she owned some or all of the mineral rights within that tract.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Letter to Plug and Abandon a Well Asked 03/30/2015
Q: If a company intends to plug and abandon a well on my property in Texas, do they need to inform me of their intentions, and what information should be included in their letter?
A: They need to notify the State for sure as it's required, and could alert the landowner as well, but usually will not alert either the landowner or the mineral owner (if different) since it's really not up to them what they do with their well.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Changing ownership of inherited mineral rights? Asked 03/30/2015
Q: Mother passed away with oil & minerals rights. How can we change ownership to another family member or a new LLC? The rights are in Colorado & New Mexico.\nWill we have to go to probate court to do this?\nYours,
A: Probably best to have her estate probated in both states in order to ensure you have "marketable title" to the mineral rights she owned. If there is little activity near them then this is not something you need to do right away, but if you ever decide to sell them most buyers will want to see a probate before closing. This can all be done through the mail, using an attorney, so unlikely you'd actually have to show up in court in person.

In a lot of cases an oil company will agree to LEASE inherited mineral rights without a probate being done. They will ask you to sign an affidavit of heirship or something, but probably won't require a probate. However, if a producing well is ever drilled as a result of the lease, the company will likely require a probate before they will begin paying you royalty.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Response to lease offers? Asked 03/30/2015
Q: Recently I have started to receive lease offer letters from oil and gas companies which offer 3 separate lease options. For example:\n\n1. $200 per net acre, 3 year lease, 3/16 royalty +2 year option @ 125% of original bonus or $250.\n\n2. $250 per net acre, 3 year lease, 3/16 royalty +3 year option @ 125% of original bonus or $312.50.\n\n3. $350 per net acre, 5 year lease, 3/16 royalty\n\nIf I ignore the letter (because I don\'t like any of the options), do I run the risk of being pooled into option 3? What advice, if any, would you have for me in this situation?\n
A: Don't lease for less than 3/16 royalty. Don't agree to a two-year option unless they offer to double the original lease bonus. If they don't want to do that, then just tell them you'll be happy to lease for three years now, and they can call you again in three years to negotiate another two years then if they want to. Prices may go up more than 125% in three years and you don't want to be stuck at only 125% of the original bonus for another two years if that happens.

I would stick with no more than three years initially as well, and so wouldn't agree to five years. Three years is plenty of time to drill a well and if they want more than that initially they are just speculating with your minerals. Same argument here really; prices could go up substantially over the next three years and you don't want to be locked in at today's rates for five years.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com

Should I sign a quick-claim deed for $500? Asked 03/27/2015
Q: I have had someone contact me and ask me to sign a quick claim deed for mineral rights under my property. He claims he would be willing to pay $500 for this. He also says that I have no claim to the minerals, which as far as I know is true, but his attorney suggested he get us to sign. How do I go forward?
A: Actually it's "Quit-Claim" not "Quick". A lot of people get the terms confused though.

HIS attorney? I would certainly recommend you talk to YOUR attorney before agreeing to anything. HIS attorney is working for him, not you.

You need to find out what the $500 is for, what interests the deed covers, and then YOU need to determine if you own it or not. Don't take their word for it. You could be signing away your rights to something you DO own, and it could be worth more than $500. I'd do some research before signing anything, or just tell them "no thanks."

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Valuation of non-producing mineral interests Asked 03/25/2015
Q: How can I obtain a \"fair market value\" for some mineral interests in TX where there is no production. My father inherited the rights, and has received lease payments. The most recent is a 2-year lease for which he received payment in 2014. That company referred me to this website.
A: If the lease was fairly recent, you could estimate their value by using a multiple of 2-3 times the lease bonus per acre that was received. For example, if they were leased fairly recently for $300/acre then they'd be worth between $600-$900/acre to most buyers.

If the well were producing, then a multiple of 36-48 times the average monthly income (per production month) over the past six months could be used instead.

Both are just "rules of thumb" but seem to be used by buyers to at least estimate value of mineral rights. You can read more about how mineral rights are valued by visiting the Mineral Hub News link on our website. Several helpful articles on various topics there actually, one of which is "What are my Mineral Rights Worth?"

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Finding unclaimed mineral rights Asked 03/22/2015
Q: I found my deceased fathers name on a document for gas lease of township 8n section 3 9w in white county arkansas. He is listed with other deceased relatives as an heir to mineral rights on that area. It is producing gas for XTO inc. How do I find out if we have any money to claim from the mineral rights on this plot of land?
A: Check with the operator of the well (XTO) and see if they have your father's name in their "pay deck". You'd probably want to contact their division order department.

You could also check www.missingmoney.com and see if any royalty payments have been turned over to the state because they couldn't find out who the current owner is.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Finding out if there are mineral rights with our property? Asked 03/20/2015
Q: How do we find out if there are mineral rights to property we are buying and who they belong to if there are?
A: Current mineral rights ownership records are kept on file with the county clerk in the county where the mineral rights are located. You can do the search yourself in person (or perhaps online if they post their records online), or have a local abstract company do it for you for a fee.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Lease extension option question Asked 03/20/2015
Q: I had signed a 5 years/ primary term/lease that\'s expiring on 3/29/15. No work has started as of now/ not even permit pulled/. Gas company/Cabot/ contacted me and wants to extend the lease for two years with $ 1.5 K per acre and otherwise same terms as primary lease. My lease says : \" \"Lessor hereby further grants,leases,lets and demises exclusively to Lessee the lands then covered by the lease under the provisions of the first right and option to extend the primary term of the lease for an additional five/5/ years from the expiration of the original primary term by paying or tendering the sum of five thousand seven hundred fifty dollars per acre (for the acreage estimated to be comprised by the lease) to the parties entitled to payments for leasing rights according to Lessee\'s records.\"\" Question is : are they allowed to lower payment per acre and shorten the extension to 2 years ? Thank you. V.Laurencik
A: They are allowed to ask, but that doesn't mean you have to accept. You could point out to them that their option states five years and more money and see what they say, or just say no to their lesser offer and confirm with them that your lease will then expire in March. Looks like unless they pay you that full amount then your lease will be soon expiring unless you accept their alternative offer.

With prices down as they are, something may be better than nothing. You could also of course check around with other companies who may be leasing in the area and see what they would offer before working with your current Lessee.

Hope this helps you out.
The Mineral Hub
Mexican Land Grant Asked 03/18/2015
Q: My great (6times) grandfather was given a land grant back in the 1800\'s and he had his land patented in 1880 to his heirs. Is it possible for that land\'s mineral rights to have been sold?
A: Yes, if possible. You'd have to check the records of the county clerk's office in the county where the mineral rights are located in order to determine if the mineral rights were ever separated from the land and sold.

The Mineral Hub.
Transfer of name for oil and gas in different state? Asked 03/15/2015
Q: My dad had various oil and gas leases in Arkansas and Louisiana but passed away in Texas. Most of the oil companies said they would take an affadavit of heirship to transfer our names to leases but we were going to going ahead and probate his will in Texas for other reasons. Does this mean we will then have to do ancillary probate also in Arkansas and Louisiana? We are not sure if probating or affadavit of heirship is best ?
A: Most companies will lease based on an affidavit of airship, but if you ever want to sell them then doing an ancillary probate in each of the states where he owned minerals would be advisable as most buyers would want to see a court signing off on your ownership/inheritance officially before purchase.

Additionally, if any of the mineral rights begin producing oil or gas it's quite possible the operator of the well or wells will also prefer that you probate the estate.

Frederick M. Scott
The Mineral Hub
Value of Mineral Rights in Tarrant County Texas Asked 03/13/2015
Q: First I am not the landowner. I attend the church that owns the land with a mineral rights lease with one of the O&G companies. The company has 3 wells that extract on the lease and are preparing to drill a 4th well. Over the years the royalties have been up and down. Currently running about $500 per month. The company has recently made an impressive offer to purchase the mineral rights. The landowner does not have the means to have an engineer assess the value of the rights but does not want to give away the rights either. \n\nI was asked to do some research and found your site on my first attempt. I have read the FAQs and related answers. None of the questions pertained to this geographical area.\nDo you have any suggestions? Please.\n
A: In general, producing oil and gas properties are worth between 36 and 60 times the average of their income over the past six months. For instance, at $500 a month you could estimate of the value of those minerals by multiplying that amount by between 36 and 60, assuming the average income has been around $500 per month for the past six months.

The Mineral Hub
Lease filed at county clerk's office? Asked 03/12/2015
Q: Is there always a public notice of an oil and/or gas lease?\nShould I be able to look up a lease by its date in a county deed book? Thanks very much for your help.\n
A: Yes, you can find a copy of the lease filed in the county clerk's office once it is filed. You can look it up using the county clerk's index books, or in some cases you can find their records online.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
How can the existence of a lease be verified? Asked 03/11/2015
Q: Is it required to record all leases in the county courts at the time they are made? I ask because the person who is managing a family oil & gas trust I have a beneficial ownership in (made up of very many very small parcels throughout Oklahoma) charges us for more leases than I can find registered within Oklahoma. I just learned about the data base where I can look up our trust and see what leases were made and where. We are billed for more leases than I have found on that site (OKCourts). Thank you. None of us have any experience in these matters.
A: All leases will eventually be filed of record with the County Clerk of the county in which the mineral rights are located. Many of the County Clerk's offices make at least some of the records available online. If you can't find it there you will need to visit in person or hire someone to do the research for you.

Hope this helps you out!
Frederick M. Scott
Can I keep mineral rights when selling land? Asked 03/10/2015
Q: Is there a law requiring the sale of mineral rights to the buyer when selling your land in Texas? Is the seller required to sell the mineral rights or is there a percentage they have to sell?
A: You can sell the land and keep some, or all, of the mineral rights if you like. No law says you have to sell the mineral rights along with the land. You can keep them all if you want to. They are technically two separate "estates" (the mineral estate and the surface estate). If you want to keep any of the mineral rights, you'd want to make sure to "reserve" (hold back) whatever percentage of the mineral rights you wanted to keep in the conveyance of the land (the deed).

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Executive (leasing) rights question... Asked 03/05/2015
Q: My husband and I are going through a divorce and are agreeing to split the OG rights to our property (approx 300 acres). He wants to retain 100% ownership of the executive rights as he is keeping the property. Is there language that protects the \"non-participating\" party and is there language for 50/50 ownership of the executive rights that protect both parties? Thank you
A: If you trust him to negotiate a good lease for you both then there's no problem currently with him owning 100% of the executive rights. He may have wanted to keep the executive rights (the right to negotiate leases, receive bonus etc.) to be sure "the land" is taken care of in the lease terms, since he is keeping the land.

You might want to make sure the document severing the executive rights from the mineral rights includes you getting half of any bonus he receives, since he will be leasing your half as well.

Note also that once he is deceased, his heirs would then likely inherit his executive rights, and a lessee would then have to obtain a lease from each of them in order to have a valid lease.

He could, I suppose, include language in the severing document that you and he share the executive rights equally, thus both of you would need to sign the lease, though that would really be what you have/had prior to the divorce so I don't see much point in that, though it could be done I suppose. As your attorney.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Transferring inherited mineral rights to heirs? Asked 03/04/2015
Q: My Mom fully inherited the family mineral rights located in Texas after my Dads passing years ago. They are in her name. After my Mom passed away a few years ago I was appointed the executor of her estate by her will. Her will was probated and my brothers and I are the three heirs to her estate divided into thirds. She told us never to sell the mineral rights but her mineral rights are not in our names, does not show us as beneficiaries. I am not sure how to proceed to put the family mineral rights in our names to be divided three ways. I receive her royalty checks periodically and just divide the money with my brothers. Any suggestions on where to begin the process?
A: If her will was probated, then that process should have produced a "final decree" or a "determination of heirship" signed by the judge in the county where the estate was probated. If the decree contained a "residuary clause" (you can Google that), then that would "prove" you inherited her mineral rights, even if not specifically mentioned in her will, and would be sufficient evidence for you to go ahead and prepare an "executor's deed" to officially transfer the rights to yourself and your siblings. This assumes the probate was done in the state where the mineral rights are located.

If the minerals are in a state other than the state her will was probated in, you will likely need to have an "ancillary probate" done in the state where the mineral rights are actually located. An attorney in the state where the minerals are located could help you with that, and any attorney could prepare an executor's deed.

Since the minerals are currently producing sounds like, you'll also need to notify the company paying your mother's estate that you three are now the owners. If you provide them with a copy of the final decree they may go ahead and just start paying each of you directly. You could call and ask them if that would suffice. You'd still eventually want to do an executor's deed in order to make it "official" though.

Hope this helps you out.

The Mineral Hub
What constitutes an intent to drill which prevents re-leasin Asked 03/04/2015
Q: What does a company have to do to prevent an owner from re-leasing minerals or signing a bonus extension? If they say they have filed an intent to drill, must they also have certain equipment set up on the property which would indicate that drilling is imminent? If not all owners are signed on yet, can one go ahead and sign with another company, or can we re-negotiate after the expiration of the lease or sign with another company?
A: Once leased, the minerals will remain leased as long as the lease is within its primary or secondary (production) term. If the primary term (i.e. three years etc.) expires without a producing well being commenced, then the lease will never enter its secondary term and will expire at the end of the primary term.

You cannot sign with another company if you have a current and still valid lease with someone else (whether in primary or secondary term), even if they have not leased everyone yet.

If your lease has expired, then of course you can attempt to re-negotiate the expired lease if they want to lease again, or you can lease to someone else if someone else is interested in leasing.

The Mineral Hub
Mineral Rights in southeastern Morton County,ND Asked 03/03/2015
Q: Is there any recent or anticipated mineral extraction for the southeastern part of ND; the area of the towns of St. Anthony and Solen, ND? I own mineral rights in this area willed by my grandfather to my father and now to me.
A: I'm not aware of any production in that area. You could check with the state's oil and gas regulatory body to see if there is any activity in the area, but most of the activity in ND is in the western half of the state currently.

The Mineral Hub
Mineral rights for sale with "active pump" on them? Asked 02/28/2015
Q: i came across mineral rights for sale with active pumps on them. How does the royalties work with that? Or is it a whole new contract? Is it even worth buying?
A: The "royalties" will be paid to whomever owns the mineral rights assuming the "active pump" is still working, and thus producing oil or gas. If there is no current operator or production then you'd want to contact the owner of the equipment to get it all cleaned up or removed prior to buying the property or else you could be responsible for doing so. Something you probably wouldn't want to get in to.

The Mineral Hub.
How do I get the papers showing my ownership? Asked 02/27/2015
Q: I don\'t have the address if where I own the mineral rights. But they are in my name. How do I get the papers?
A: The records you seek will be on file at the county clerk's office in the county where the mineral rights are located. If the records are not available online you will need to visit them in person to get copies of your ownship papers.

The Mineral Hub
Does royalty interest terminate due to no production? Asked 02/26/2015
Q: I sold 1/2 of the royalties I owned in Orange County, Texas and the \"Royalty Deed\" has no term limitations. If there is cessation of production, does this royalty deed become null and void? The deed appears to say that it is forever. \nI am a trial lawyer, but not an Oil & Gas lawyer.\nIn addition, who pays the property taxes on this mineral interest in such a case? I get no royalties, but have to pay taxes?
A: If it's a "perpetual" royalty deed, and it sounds like it is, then the owner of the royalty interest you sold will have the stated royalty rights in perpetuity, no matter if you later sell the mineral rights from which the royalty was granted. No matter if there is cessation of current production.

If a new lease is signed, the holder of the "executive rights" (usually the mineral owner; i.e. you at present) will continue to receive any lease bonus that is offered. The royalty owner will only receive his/her stated share of any royalty payments.

As for taxes, as you may know, Texas does tax mineral rights, whether producing or not, so you will continue to be responsible for taxes I believe. You might check with your accountant on that one however as I am not positive.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Dewey County, OK lease rates? Asked 02/26/2015
Q: Is there a resource where I might find what a fair rate for a 3-year mineral rights lease in Dewey County, OK? It turns out I own the rights on a small piece of land in Section 22. Evidently, they are about to drill! Their initial offer for lease is $550 per acre with a 3/16 royalty payout. I would just like to know if that is a \"going rate\" or, should I ask for more? Thanks!
A: You should read our Leasing Tips article. Lease values vary widely within a county and you didn't provide much of a legal description so I can't look it up for you, but the article should help you negotiate the best lease possible, and will suggest questions to ask the landman.

You might also consider following us on Twitter (https://twitter.com/mineralhub) as we often post recent lease offers we've received for minerals in Oklahoma there.

The Mineral Hub
Value of mineral rights at time of inheritance for tax purpo Asked 02/24/2015
Q: Inherited mineral rights in Williams and Mountrail counties in ND 12/2004 and sold 5/2014. How do I find their value at 2004 so I can determine capital gains for tax purposes. Must have written 2004 value for my CPA. I live in CA. thanks.
A: Best way to estimate value in 2004 would be to find "comparable sales" of similar minerals nearby at the time, and use those amounts as your valuation. If the county clerk uses "documentary stamps" to state the value of minerals purchased in the county, then you could use the stamp values from nearby mineral deeds from 2004 to arrive at a valuation for yours.

Absent tax stamps or comparable sales you could check with a "landman" in the area who was around back then and ask him/her for an opinion. An OIL AND GAS attorney might also be able to help, but of course would charge "lawyer rates" for the advice. The local banker (whose clients may have mineral rights the bank manages) might be another option.

If they were by chance PRODUCING, or even just LEASED in 2004, then you could use a multiple of 48 times the average monthly royalty income over a six month period from 2004 as your valuation, or use a multiple of 2-3 times the lease bonus received in or near 2004.

I believe the IRS may also have "formulas" they use for producing minerals, so if they were producing in 2004 you might have your accountant check on that as well.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Verification of lease expiration due to non-production? Asked 02/17/2015
Q: When I bought my piece of land there was a Oil, Gas and Mineral Lease on the property with the previous owner that was dated 7/29/1974. The Primary Term was 10 years and was to remain in force if anything was produced or drilling was in operation. I have owned this property since 1982 and there has been no drilling or anything pertaining to this lease done on it ever that I can tell. Now I have to prove that this Lease as expired. How can I do that?
A: An oil and gas lease will expire of its own terms unless it continues to produce past its initial primary term (the ten years) and then would be good for only as long as the production continues in paying quantities (i.e. the revenue is sufficient to recover the costs of operating the well and producing the oil and/or gas). Once it stops for any length of time, the lease would automatically expire.

I don't think you need to "prove" anything. Whoever is asking for the proof needs to instead tell you why they think the lease is still valid. It's on them. I'd say it's expired and you are therefore free to lease the property to another oil company.

If you really need to verify a lack of production, you could check with the regulatory body for oil and gas in your state. They likely have a website where you can look up whether a well is still producing or not, though from your question it seems like you are right there and can therefore see it hasn't had any activity.

The Mineral Hub
Has my lease expired in Roger Mills County ? Prefer yes. Asked 02/15/2015
Q: I leased the mineral rights to 20 acres section 6, T16N, R25W in September 2009 and granted a right of way for a gas pipeline from a nearby well in section 7 called Trail Ridge Maroon Peak #1-6H. I did receive a very small royalty payments with the 3 year primary term. Late in 2011 these mineral rights were sold to another party and they continued to pay the small royalties. Their December 2014 royalty check indicated a range of sales months from 05/12 to 01/14. I called the operatoer to ask status and was told it was a low producer, shut down, but not plugged not abandoned. Another company has made an attractive offer to the lease this property but I do not know if the 2009 lease agreement has terminated. That lease has language that seems contradictory. One phase reads if gas from any well is not sold for a period of one year or more with no other production from the leased premise then lessee shall pay $1.00 per acre within 90 days of such annual period. This provision has not been acted on if valid but the 2014 royalty payment was only $13.67. The other lease phrase reads if after the primary term there is a cessation of all production the lease shall not terminate if lessee commences activity within 90 days. I was unable to identify the shut in date for this well at the OCC web site. Please advise . Thanks\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
A: The well in 6-16N-25W has not produced for at least 90 days. I'd say your lease has expired. The company who wanted to lease you would of course verify that before paying you for a lease but it appears you are no longer under a lease. They have not plugged the well yet.

The Oklahoma Corporation Commission is the State regulatory body for oil and gas in Oklahoma. On the OCC website (www.occeweb.com) you can search for drilling permits, completion reports, pluggings, as well as current or past production figures. You'd need to have the legal description handy (Section, Township, Range) in order to narrow your search down to the correct area.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Environmental impact of O&G drilling on crops? Asked 02/13/2015
Q: A land man has contacted my family about leasing acreage in Ohio County, Kentucky. Can you provide general information about the impact of oil drilling on the environment? The land is currently cultivated yearly with either soy beans or corn. A sizable creek borders the property. Any information you can provide is appreciated. Thank you.
A: You should be able to find the answer to your question HERE
Right of first refusal response? Asked 02/12/2015
Q: I am selling my 75% of mineral rights I own on acreage in\nPaso Robles, CA. The people I sold the acreage to in 1985\nown the other 25%. When I decided to sell my 75% I sent\ntwo letters to the land owners offering them first choice to\npurchase. I never heard from them. Can they cause any \nproblems with my sale?
A: It seems they were not interested in purchasing after you notified them you were planning on selling. To avoid any future problems you might send them another letter stating the price offered by your current buyer and tell them that if they want to match it they have 30 days, 2 weeks etc. to respond. If they don't respond to that then I'd say they have no claim since you did alert them to the sale prior to selling.

The Mineral Hub
Inherited Mineral Rights Asked 02/10/2015
Q: Where is the best source for locating my fathers mineral rights and or a plat map of where they exist in Kingfisher County?
A: Visit the county clerk's office in Kingfisher County. All conveyances affecting your father's mineral rights would be filed there.

The Mineral Hub
Mineral rights for lease or sale in Dewey County Asked 02/03/2015
Q: I have an offer for purchase of mineral rights in Dewey County and would like to know if it is a good offer or not. Can you tell me the going rate for Section 13 16N 16W (SW quadrant) and for Section 14 16N 16W (SE quadrant). I was offered $3100 per acre.
A: Sounds like a good offer to me. I'd take it if you were in the market to sell.

The Mineral Hub
How do I find out what exactly I inherited and what it is wo Asked 02/03/2015
Q: Back in 2007 I received a check along with a lot of papers attached to it. It has a well name and number on it and states it is in Garfield County, OK. All I really know is that I inherited it from my grandfather and the check was only for $10 and some change. I never cashed it or any check I received. I moved in early 2010 and never changed my address and really just forgot about it until I moved again and stumbled upon the 2007 and 2009 checks. The check in 2009 was for $16 & change. How do I know if I own land, mineral rights, well or what? Sorry, I know nothing about this stuff. A friend told me to call Continental Resources, who sent me the checks and talk to Division Orders. I did that today and all they told me was submit a change of address in writing and that I was the sole owner. Any help is appreciated.
A: Your friend was correct. You need to contact them about this. You will need to "prove" to them that you inherited the mineral rights if no probate for your grandfather was filed. They will tell you whether you need to probate your grandfather's estate or not. Since they told you that you are the "sole heir" it's likely they already have the "proof" they need but you might confirm with them and then ask whether there is any production there and if so when they plan to pay you for it.

If you are going to claim these mineral rights, it would also be a good idea to give them your new address as well as filing a "notice of address" with the county clerk's office in Garfield County in case someone is trying to reach you about these mineral rights.

The Mineral Hub
Mineral Rights value in Lincoln County, OK Asked 02/02/2015
Q: Would greatly appreciate a good estimate for mineral rights \nsale value for 35 acres. Location is:\nSection 29-17N-05E;\nLincoln County, Oklahoma \n \nThe Southeast Quarter (SE/4) of Section Twenty-Nine (29),\nTownship Seventeen (17) North, Range Five (5) East, or the \nIndian Meridian. (Containing 160 acres).\n\nThanks in advance,
A: There is a pending application for a drilling permit in this section currently, though it looks like they might have changed their mind about drilling because the pooling order they'd applied first was recently dismissed at the applicant's request. Could be they just determined they didn't need to pool, but in most cases a dismissal indicates they changed their mind about drilling.

Even so, I'd guess these are probably worth north of $2000/acre currently. If you're looking to sell them we can help you find a reputable buyer who is willing to pay a good price for them without stringing you along and playing games etc. You can list them directly on our Sell Mineral Rights page actually!

If you're not wishing to sell, but are instead looking to lease (assuming they are not leased already) then I'd suggest you check the county clerk's records to see who is currently leasing in the area and contact the company/companies directly. You really don't need our help for that, and in most cases they will find and contact YOU assuming they can locate you using the county clerk's records (which is where deeds and other land/mineral records are kept on file) so if you haven't been contacted it may be that no one is interested, though I did see that a couple of fairly recent leases have been taken in this section. Only a couple, but perhaps there is still leasing going on.

Hope this helps you out.

The Mineral Hub
Drilling in Murray County, OK Asked 01/28/2015
Q: My sister and I own a small percentage in property at the below location. Wonder if any drilling is on the charts for the area of our property? Murray County, OK Section 20-T1S-R2E and 19-T1S-R2E. Thank you.
A: Bays Exploration may be planning a well in both these sections. I say this because they applied for spacing orders in both last year. Usually this indicates a well is planned within a year or two. You could check the Oklahoma Corporation Commission's website (oil and gas division) to keep up-to-date on this. If and when a drilling permit is issued (which would be one step closer to a well) it will be uploaded to that website.

There were a couple of permits to drill issued in 2013 but not sure if they were ever actually drilled prior to expiration (a drilling permit is usually good for one year in Oklahoma.)

Hope this helps you out.
The Mineral Hub
Value of mineral rights in Weld County, CO? Asked 01/27/2015
Q: If I sell, IF, can someone please advise me what the oil, gas and mineral rights are worth, right now? I own aprox. 50 acres. Rough estimate would be great. Somewhere in the ballpark. ....
A: Weld County is a big area. Values vary from $100/acre to over $1000/acre. The closer you are to current oil and gas activity the more value these will have. If they are in "goat pasture" where nothing is going on I doubt they'd be worth much more than $100/acre. If they are currently leased, but not producing, you could estimate their value at between 2-3 times the lease bonus you received. If producing their value would be approximately 36-60 times the average monthly income (per production month) received over the past six months.

Hope this helps you out.
The Mineral Hub
Value of Mineral Rights in Midland County Michigan Asked 01/25/2015
Q: My husband recently inherited mineral rights in two properties in Midland County, MI. How can we find out the value of these?
A: Are you planning to sell them? Assuming it's more than just a couple of acres, the best way to determine value is to get them in front of potential buyers in a real marketplace! Listing them for sale on the Mineral Hub would be a great way to do that of course, and once we receive some offers for them you'd have a good idea of what they're worth and you can sell to the highest bidder basically.

Mineral rights in areas with little or no oil and gas activity are probably going to be worth $50 or less per acre, while mineral rights in very active areas can be worth several thousand dollars or more per acre.

If you're not wishing to sell them and are just trying to find out what they are worth then you will have to do some research on your own. I would suggest reading our "valuation" article on the Mineral Hub, as it will give you lots of tips on how to determine value, and is the same method used by buyers! You can find that article HERE.

Hope this helps you out!
The Mineral Hub
Do mineral rights revert to landowner on unpaid taxes? Asked 01/22/2015
Q: If someone doesn\'t pay the tax bill on their (severed) minerals, do those minerals revert to the landowner or are the offered at auction? Does this vary from state to state?
A: In some states mineral rights can be sold at auction by the taxing authority in order to pay delinquent taxes. I don't think they would revert to the landowner because the taxes are not owed to the landowner, but to the taxing authority.

In most cases, the debtor will have a certain period after the sale in which to buy them back by paying the taxes owed. Yes, varies by state. I'm sure you could Google this for more info.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Purchasing Land. Owner reserving mineral rights. Asked 01/22/2015
Q: We are purchasing land (10 acres). We are owner financing for 5 years and they want to retain mineral rights. Can they still keep mineral rights after the property is paid for?\n\nCan they legally drill on our property once that is in our name?\n\nWe just want to know what our rights are and what we should do before we sign the contract.\nThank you for your time.\nMichelle\n
A: Short answer: Yes, and yes. If they state they are retaining/reserving them mineral rights to themselves on the conveyance of the land to you, then you will never own them, even after the loan is paid off (unless they later decide to sell them to you or something.)

The land and the minerals are really two separate estates, and thus can be split up and sold separately by someone who owns both. The "mineral estate" is the dominant estate, meaning that the landowner cannot keep the mineral owner from getting at their oil and gas, which obviously involves drilling. That doesn't mean they can drill outside your bedroom window, but it does mean that it's possible a company could decide that somewhere on your 10 acres would be the ideal place for them to drill a well someday, in which case you really couldn't stop them legally.

Keep in mind though, that even if you did own the mineral rights, the owners of other mineral rights nearby that might be included in a company's drilling unit would also have a right to get to their minerals underground, and thus again a portion of your 10 acres (or their land) might become a well site. The "good news" is that oil companies usually pay a "bonus" to the landowner whose land is drilled on in order to appease them for the "inconvenience" of having a well drilled on their property. The bonus could be $5000, or it could be $25,000. Depends on how "hot" the area is and how quickly the company wants to drill. They would rather have a happy landowner than an angry one if possible.

The "reason" that the mineral estate is the dominant estate is because if a landowner could legally refuse to let a mineral owner (or their lessee) produce the minerals under the land, the mineral rights would be worthless since no minerals could be recovered.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Withdrawn lease offer... Asked 01/21/2015
Q: Leasee has withdrawn o/g offer after signed agreement was received. \nCan we request the original signed lease agreements be returned?\n
A: If they received your signed lease (or even if you mailed it to them the day before they rescinded their offer) they really should go ahead and pay you, because in my opinion once they receive your signed lease they are no longer able to withdraw their offer without incurring liability (assuming your title is good of course.)

At the very least though, you'd want them to mail the originals you signed back to you. I'd also make sure they hadn't already filed the lease of record before they rescinded their offer. If they did, you'd certainly want them to file a "release of lease" with the county clerk so others wouldn't think you were leased already.

If they really filed it of record and then rescinded their offer, I'd say you have a good legal case for getting paid assuming there are no issues with your title. A company should NEVER (in my opinion) file a lease of record prior to the lessor actually receiving payment (i.e. receiving a check, bank draft paid and payment from same actually IN owner's account etc.)

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Can I be forced to accept an oil & gas lease in OK? Asked 01/15/2015
Q: I own approx 18 acres of mineral rights in in an undivided 160 acre area in Cleveland county OK & have a proposed oil & gas lease for 5 year term with 1/8 production. If I do not sighn this lease, can I be forced to lease if a company decides to drill on this 160 acre area that my 18 acres are within?????\nWhat are my advantages & diaadvantages to this situation???
A: Short answer is "no" you cannot be forced to accept a lease you don't want to sign. If you don't agree to lease to them however, and they decide to drill a well, they may apply for a "forced-pooling order" at the Oklahoma Corporation Commission to force you, and any other "recalcitrant" or unlocatable owners into their unit. If their pooling request is approved, and you don't sign a lease with someone before the order takes effect, you will be force-pooled into their proposed drilling and spacing unit at the terms dictated on the pooling order and arrived at during the forced-pooling hearing. You will actually be given at least two choices in the Order, similar to those you were offered in the lease probably as that's what its terms are based on. The terms in a forced-pooling order are usually based on the "average" terms the company was offering those who did lease.

A forced-pooling is not a lease, though some of its terms are similar. For one thing, a forced-pooling order usually is good for only one year and if they don't actually commence drilling a well by then the order will expire and you'd be free to lease again. If a well is drilled that comes in as a producer then your interest would be subject to the royalty you elected in the pooling order for as long as production continued. If you didn't select a royalty/bonus option in the Order, then you would be pooled at the "default" value (usually a 1/8 royalty and cash bonus.)

Better to lease if you can, but if not a pooling is not the end of the world. Just make sure you get a copy of it in time to make an election in order to avoid being pooled at the "default" royalty, which is usually only 1/8. Also remember that you can actually show up at the forced-pooling hearing if you like, and even "protest" their application if you think it's unreasonable or if you think they didn't negotiate fairly with you when trying to get you to sign their lease. It will be up to the administrative law judge who presides at the hearing as to how much weight your protest might have on his/her decision of whether to approve or deny the company's request to "force" you into their unit.

Also, if they do decide to try to force-pool the tract, and you haven't leased by the time the Order comes out (if approved) then you might be able to lease to another company for better terms than you have been offered by this company as long as it's done within the (usually two-week) window allowed after the pooling order is issued but prior to you being bound by it. There are actually companies who wait for these orders to come out and then they contact unleased mineral owners subject to the pooling and try to get them to lease to them so they can get a "free peek" at the well without actually having to pay to drill it.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Landman who negotiated lease filed forged lease with county. Asked 01/14/2015
Q: My sister and I share mineral rights in grady county ok.\nafter several months of discussion we signed lease at 3/16 along with other provisions. received letter from oil company of dispersement on a reassigned lease. The numbers didn\'t add up. The county forwarded copy of filed lease. Signature page was what we had signed, but the conditions and rate page was changed. The filed document is a forgery. Contacted oil company. They forwarded a copy of \"Disclaimer of Interest\" for the reassignment and the Leases. What do I do?
A: Wow, that's pretty ballsy (and definitely dishonest) of them if they really filed a lease with different terms than the one you signed. Did they leave you a copy of the original lease you signed? If so, I'd send that to the company he assigned your lease to and ask what's up and why the documents don't match. If that doesn't work and you still think the filed lease is a "forgery" I'd contact an oil and gas attorney and go from there.

Frederick M. "Mick" Scott
The Mineral Hub
Lease language on new 3-year lease? Asked 01/14/2015
Q: I have a 3 year lease (With Pugh, Depth clauses)\nand now the primary lease is up and Oil company wants\nto lease again.\nI am concerned about these statement under Section description:\nCapital letters!\n(IT IS THE INTENT OF THIS LEASE TO COVER ALL RIGHTS NOT COVERED BY AN EXISTING OIL AND GAS LEASE)\nThis lease shall cover alll rights in all formations in \n(Section description) 100\' below the stratigraphic equivalent of the base of the deepest formation penetrated in the OIL COMPANY NAME AND WELL NAME well located on tgese lands or land pooled therwith.\n\nthis company leassed to others in same sectiom but this is NOT ON THEIR LEASES \n\ndoes any one know what these paragraphs mean?\n\n\nLauren
A: It just means that if any of your mineral rights at any depth under the tract they are leasing are currently covered by another oil and gas lease, then their lease won't infringe on that acreage or those depths. Or to put it another way, they want to lease all minerals in the tract listed on the face of the lease that are not currently leased by them or anyone else.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Sibling sells as executor. Do I lose my interest? Asked 01/08/2015
Q: My sister sold my fathers properties and reserves 1/2 of what he owned. Does that mean I lose my mineral interest in those tracts? The land is in Colorado and I live in Texas I dont know enough about this to know what I own.
A: If your sister sold anything, it could only be what she had the authority to sell. She could not sell your inherited share unless she had authority to do so as executor of your father's estate etc. If she "reserved" 1/2 of what he owned that means she only sold half. Perhaps she only sold her half and the remaining half is yours. You'd need to check with her on that.

The Mineral Hub
Basis value of inherited mineral rights in Grady County, OK? Asked 01/07/2015
Q: How do I find out the stepped up value (basis) of inherited mineral rights in Grady County Oklahoma? Is there a data base or source somewhere of mineral rights values when they were inherited in 2003?. Does the county or state keep a public registry of minerals rights sales/values?
A: No database or "source" that I know of that would help you. If they were producing in 2003, then a "rough" way to value them would be to multiply the average monthly income back then by anywhere from 36 to 60, as this is how many buyers would "ballpark" value for a producing property. If they were leased at the time, then a multiple of 2-3 times the lease bonus received would be another way to "ballpark" value. Non producing, non leased would be harder to value that far back, but "comparable sales/leases/production" nearby could be used if the area nearby was active at the time.

To find "comparable sales" of mineral rights in the area back in 2003 you could visit the county clerk's office in Grady County and check the "tax stamps" on mineral deeds from the area to estimate what was being paid for mineral rights in the area circa 2003.

The same methods listed above could be used to estimate their current value.

Hope this helps you out!
The Mineral Hub
Oklahoma Mineral Owner Registry legit? Asked 01/04/2015
Q: My family has some mineral rights in Stephens County. A company called Oklahoma mineral Owner Registry has been sending a letter to my aunt and her siblings asking for a $35 Annual Records Fee. From what I can read about Oklahoma law, this sounds like a scam. Is it?
A: The company you mentioned is a private company, and while it's certainly not a "scam" it's also not a government agency, though the "notices" they have sent to me in the past do tend to look more like an official "bill" than a membership solicitation.

They claim their "registry" makes it easier for oil and gas companies to find you in the event they want to lease or drill a well. In most cases though, a company wanting to lease or drill will find you whether or not your are listed in the Mineral Owner Registry, however, if you are not sure where all the mineral rights you may own are located, then it might be useful for you to submit your information to this registry because landmen working for oil companies who can't find you in the county clerk's records will sometimes search this private registry to see if they can locate your contact info there.

On the Mineral Owner Registry website one of their FAQ is "Don't state agencies keep this information up-to-date?"

Their response is "County offices only record deeds, mortgages and other legal documents. Under state law, they are not required to update contact information for mineral owners in county land records. Therefore, if a mineral deed for a tract of land you own in has an address from 1981 on it, that's the address oil companies will get today when doing ownership research."

While I agree that their response is correct, it's also a fairly simple process to file a "notice of address" with the county clerk's office as needed to keep your contact info up-to-date there so that when searches are done the landmen working for oil companies will be able to find you. You'd want to of course file the notice in the county or counties where you owned mineral rights, not just in "any" county.

Again though, if you're not sure where your mineral rights are located, you wouldn't know which county to file such a notice in so in that case the Mineral Owner Registry might be something you'd want to consider. Some oil companies send their people to the registry to look if they can't find your contact info in the county clerk's office. $35 well-spent in that case I'd say.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub



Conveying inactive mineral rights with sale of land Asked 01/02/2015
Q: My 95 year old mother owns 150 acres in Rains County, Texas. (Approximatley 65 miles east of Dallas). The property has been in the family snce the Civil War. She lives out-of-state and is selling the property. She owns all the below-the-surface rights. There isn\'t any active oil or gas exploration in the area. She was verally given a full price offer for the property on the condition of conveying all of her below-the-surface rights. Should she convey the mineral rights or try to keep them? It could be a deal breaker. She isn\'t sure if she\'s being nostalgic or realistic in wanting to keep the mineral rights to a property in an area that historically hasn\'t produced gas or oil? Thanks!
A: If the area where the mineral rights are located has not been an active area for oil and gas over the years, the mineral rights are probably not worth much anyway. If the buyer of the land insists on including the mineral rights in the sale I don't see the harm in including them assuming their value is accounted for in the total sale price. They are worth "something" even if no production is occurring nearby, and therefore some value for them should be added to the market price of the land if they are to be included in the sale.

The Mineral Hub
If lease is assigned to another, does term start over? Asked 01/01/2015
Q: If a company signs me for a five year lease and three years into the lease assigns the lease to another company does the lease start( five more years) over or is there still only two years left? This has happened to myself in Pa.
A: There is still only two years left. Your lessee can assign the lease to someone else at any time unless prohibited by the lease. In addition, any party they assign it to can assign it again to someone else if they choose. Neither scenario affects how long your lease will be in force. The primary term you agreed to will still be intact even if the lease is assigned.

The Mineral Hub
Leasing rights only? Asked 12/30/2014
Q: My family owns a rather large mineral estate. In all but 5 sections of land, it is clear in the estate inventory what our net mineral acres are for each section. In the 5 sections of land in which the net mineral acres are not clarified the inventory simply says, \"Leasing Rights Only.\" What does this mean? No one I speak to seems to know. I am currently trying to trace down the original deed.
A: It likely means you don't own the mineral rights in those five sections, but only own the right to lease the minerals on behalf of whoever does own them. To verify this you could search the records of the county clerk's office and look for the deed that transferred the mineral rights themselves to some other party, with the grantor retaining the right to lease.

Hope this helps you out.
The Mineral Hub
Did grandmother retain WY mineral rights? Asked 12/17/2014
Q: My grandmother past away in 2007 and she had retained her mineral rights to land that our family homesteaded in Wyoming. In 1975 the land was sold, but not her mineral rights. We asked her lawyer and the executer of the will if she still retained her mineral rights because we new she did, but we had no proof. nobody contacted any of us concerning the inherited mineral rights and we have tried to find out what we needed to do to maintain them, but we have been unsuccessful.
A: If your grandmother reserved the mineral rights (i.e. kept them) when selling the land, then the reservation would be referenced on the deed where the land was sold. If no mention of the minerals was made on 1975 deed, then the minerals were conveyed along with the land.

The 1975 deed would be filed of record with the county clerk in the county where the land is located. You should be able to obtain a copy of it from them.

If she did retain them, then likely a probate of her estate (sounds like you may have done that since you had an attorney as executor) would need to be done in Wyoming in order for her heirs to have legal title to them according to the terms of her will.

Hope this helps you out.
The Mineral Hub
Hughes County, OK going rate for OGL? Asked 12/16/2014
Q: What would be the going price per acre for mineral rights to be leased in Hughes county 8-7N-11E?
A: Many things influence lease prices, including current oil and and gas prices, which I'm sure you are aware, are pretty low right now. If it were me I'd read our "Oil and Gas Leasing Tips" article (see "Mineral Hub News" link on our home page) prior to signing any lease.

As to current value, the article will give you the tools to help you determine that, as well as many good tips to consider prior to signing a lease.

Hope this helps you out! Merry Christmas!

The Mineral Hub
Expiring ND lease covers multiple sections. What to do? Asked 12/16/2014
Q: I signed a lease agreement 3 years ago. It will now expire. I own the mineral interest in 3 different section in North Dakota (Bakken). In one of this section thye produce oil, in the others there are no activities.The 2 section where there are no activities are not included in the spacing unit where there are activities. Can I negotiate new lease agreements for the two sections where there are no activities, or is the lease agreement still valid for the 2 sections where their are no activities because their are activities in the first section
A: Unfortunately, in ND, which has no statutory Pugh Clause, if the lease you signed included all three sections, then all three will be considered "held by production" from the one that is producing, and thus you will currently not be able to negotiate a new lease for the two sections without current wells.

Advice for future leases that you only include one section per lease.

The Mineral Hub
Value of Mineral Rights Inherited Asked 12/12/2014
Q: I inherited Mineral rights in Sec34-8N-7W Grady County, Oklahoma in December 1972. \nWhat would be the value of them in 1972 compared to current value?????\n
A: In 1972 they were probably worth next-to-nothing. In the past few years though, drilling activity has increased in the county so they are likely worth at least a few hundred $ per acre currently, and depending on the surrounding activity in the immediate area they could be worth over $1000/acre. They are probably too far north to be in the "hot" part of Grady County where minerals have sold for as much as $20,000/acre recently, but if you decide to sell them on the MINERAL HUB we can look into that a bit more. (See our Sell Mineral Rights page for more info.)

I did notice there has been some recent leasing activity in the section. This would indicate at least some activity in the immediate area. There are a couple of decent wells in adjacent sections as well that were drilled within the past few years. This would indicate ongoing activity as well.

Definitely worth substantially more than in 1972 would be my educated opinion.

The Mineral Hub
Value of Mineral Rights Asked 12/09/2014
Q: I and my siblings own several sets of mineral rights on various properties in northwest Colorado. I have received an offer from a surface land owner to buy the mineral rights attached to his ranch. These minerals are not currently under lease and according to the ranch owner the \"area\" is not being actively explored, though I know there is a lot of activity in general in NW Colorado. (Note: the rancher stated he is also in the oil and gas business himself.) I have been exploring the COGCC website to see if there are drilling permits etc being approved in that location and don\'t see anything that argues with his observation. This is the first time we have considered selling some of our minerals, and frankly are considering it because the interest comes from the land owner. How do we determine if his is a fair offer for the mineral rights - or what a fair value would be?
A: The absolute best way to determine the true market value of your mineral rights is to get them in front of more than one or two buyers. Of course that's what we do here at the Mineral Hub, so if you are planning to sell these perhaps one of our buyers would offer more than the ranch owner is offering you. It's fairly easy to determine the level of interest in a parcel once they are "out there" in the form of a listing on the Mineral Hub. Without exposing them to a true marketplace you are really just taking the word of the landowner as to what they're worth.

You can always list your minerals for free with us for three weeks by visiting our Sell Mineral Rights page (from the www.mineralhub.com homepage.) I know of several buyers that buy actively in Colorado.

The Mineral Hub
Found Dad's old mineral deed. What to do? Asked 12/07/2014
Q: my husband was going through his dads paperwork and found a Mineral Deed that his dad inherited from a family trust. How does this all work? Basically how would we start to get information on all of this. It does state it is an undivided 1/12 interest. The county is Pottawatomie. Any information for a starting point would be greatly appreciated. Reading some of the answers on this website I did download Basic Information for the Oklahoma Royalty Owner.
A: The 1/12 interest probably references a tract of land as well, meaning he would have owned 1/12 of the total acreage in that tract of land. To find out for sure you could visit the county clerk's office in Pottawatomie County and search for that deed in the records, and then go forward to make sure he didn't sell it prior to his death, and go backwards (in time) to verify the number of acres he actually owned.

If you are interested in selling this interest we can help with that of course, and may be able to help you determine the acreage as well as long as it's available online (some counties put their info online back to a certain point...and you can search by name for records pertaining to that person.)

Once you determine what he owned, you'd need to be able to show how your husband inherited it. This could be done by probating his father's estate (in Oklahoma.) If he had a will that would need to be included in the probate proceedings as well. Probates commonly costs between $1500 and $2500 to accomplish, assuming the estate is not complicated.

Hope this helps!

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Inherited Oklahoma mineral rights from Texas decedent. Asked 12/04/2014
Q: I inheireted a portion of mineral rights from my husband,in Cimarron County, Ok.I want to sell them to the current owner of the land.He wants to buy but there is issue of ownership since my husband and I resided in Texas. What do I do now?
A: If your husband passed away in Texas, but owned mineral rights in Oklahoma, then his estate will need to be probated in Oklahoma in order for you to have "marketable title" to the minerals you inherited from him (which most buyers would prefer in order to buy them.) If already probated in Texas, then an "ancillary probate" in Oklahoma should suffice (a bit cheaper.) You should contact an attorney who is licensed in Oklahoma, and preferably one in or near Cimarron County since that's where the property is.

Perhaps the landowner will help with the probate expenses.

Hope this helps you out.
The Mineral Hub
Received OGL offer. Any red flags? Asked 11/19/2014
Q: is there any red flag language i should look out for in the lease, are there any predatory companies you know of in Oklahoma i have a lease offer but don\'t want to give away the farm so to speak thank you
A: Please read my article entitled "Oil and Gas Leasing Tips"; which can be found on the Mineral Hub News page of the Mineral Hub website. It will tell you what to watch out for and other tips.

Frederick M. Scott
Mineral Rights "undivided vs. divided" interest? Asked 11/17/2014
Q: A Mother owns mineral rights on a section of land -\n\nThe Mother dies and in her will, leaves 50 % each to\n\ntwo surviving suns without specifying actual ground \n\ncoordinates - How would this be handled ? Any ideas \n\nThanks
A: Each heir would receive an undivided half of whatever she owned.

What is the difference between an “undivided” and a “divided” mineral interest?

An undivided mineral interest is a shared ownership in the mineral rights under a tract of land, where each party owns a certain share of each molecule of oil and gas under that tract of land; whereas in a divided interest the entirety of each specific molecule is owned by one party.

For example, if your mother owned all the mineral rights under a 40-acre tract of land and bequeathed 50% of her interest to each of her sons, each son would own 20 undivided acres of mineral rights under that tract . Each son would, in essence, own 50% of every molecule of oil or gas under the entire 40 acres. They didn't each inherit the mineral rights under a specific 20 acres of land, but rather a 50% interest in each molecule of oil and gas under the entire 40 acres.

Hope this clarifies things a little better.
Frederick M. "Mick" Scott CMM, RPL
Cemetery - surface and mineral rights Asked 11/17/2014
Q: We have a family cemetery of one acre created by recorded document in 1882. The document “set apart the following described plot of ground to be used as a place of Sepulcher for myself and family\n\nBeing one square acre out of my homestead tract of land near the North and West lines of said tract, and including the ground which has hereto been used as a place of burial for some deceased members of my family & being a part of the Joel W. Robinson original Survey. And I hereby express it as my Especial Will and desire that my children make a special reservation of the above plot of ground for the purposes above mentioned in any deed or transfer they may hereafter make to my aforesaid tract of land.”\n\nThe subsequent deed by the heir contains no reservation as to the one acre.\n\nWhat is the status of the surface and mineral rights of this one acre?\n
A: If the heir failed to reserve the acre when the tract was later sold, then it is likely now owned by whomever the whole tract was sold to, including any mineral rights under it that were owned. A "will and desire" from the 1882 document does not obligate in my opinion, but would be best to check with an attorney on that. The 1882 document could have been worded better.

I would think the new owner would be happy to sell it back to you if you wanted, since it's a burial location. The mineral rights? Not so sure about those, but since it's only an acre I would if it were me.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
Lease offer and lease language question? Asked 11/15/2014
Q: i have received a lease offer and it doesn\'t have the amount per acre on the lease just the offer letter.on the lease it has,That the said lessor,for and in consideration of 10.00 and more dollars (10.00) cash in hand.this is my first time handling lease for my family i need help
A: Neither the amount per acre paid nor the number of acres they are paying you on are usually stated on the lease itself, though both are likely included on other documentation that you receive (i.e. the "offer letter" you mentioned.) Just because it says "$10.00" on the lease doesn't mean that's all you'll be paid.

The lease itself will only mention the total acreage in the TRACT they are leasing, rather than what you actually own WITHIN that tract. All people who own within the tract they are leasing will receive identical legal descriptions on their leases.Thus, "80 acres" doesn't necessarily mean you own 80 acres. It simply means they are leasing an 80-acre (160-acre etc.) tract, which likely has multiple owners within it.

The "$10.00" is just to show there was "consideration" (i.e. money paid) for the lease. This is common on mineral deeds as well as leases. The actual consideration paid to you will not normally be listed on leases or mineral deeds, but should be listed on other documentation they send you so you'll have a record of it.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL\
Royalty payments from well in adjacent section? Asked 11/13/2014
Q: I live on some property where I currently receive royalties from a producing well. Am I entitled to any royalties from a well drilled in the section next to me if they drilled horizontally under the section I live in. It\'s on a 640 acre spacing. I couldn\'t lease my property due to the current producing vertical well.
A: What matters is which section they are PRODUCING from. If all the production perforations are in the adjacent section then you won't get anything royalty-wise even if the well was spud in your section. If the reverse is true, then you should be getting some of the production income. Check with the operator to see whether the well is actually producing from your section or not.

The Mineral Hub
Right to lease and distribute royalties under a will Asked 10/27/2014
Q: In West Virginia, can someone devise their right to lease oil/gas/minerals to an heir (through a will and/or codicil)? Can they also devise the right to distribute the proceeds stemming from any royalty payments?
A: Short answer to the first question is "yes." The right to lease is called the "Executive Right" and can be transferred from the holder of the right (usually the mineral owner) to whomever they choose, using a will, deed (while still living) or other methods. More common would be to simply transfer the "whole bundle of sticks" (all the rights that come with owning the minerals...which include the executive rights) to someone.

Not sure what you mean by your second question, but I assume you're asking if you can transfer your right to receive royalty to someone else while still retaining ownership of the actual mineral rights or giving the mineral rights themselves to someone else. The answer to that would be yes as well.

Some people even give mineral rights to their kids but reserve the right to receive royalty for their remaining life. This is referred to as retaining a "life interest."

Any oil and gas attorney should be able to help you transfer whatever rights you wish when the time comes.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Lessor access to daily drilling reports etc.? Asked 10/25/2014
Q: My lease states that the lessor has the right to obtain daily drilling reports etc. Is this a standard clause and should I request this information?
A: Not a standard clause, but if your lease already has it in there it's in your favor. Usually only the working interest owners (the people who contribute leases or cash to drill the well) are the only parties other than the operator who get to see the daily drilling reports; and frankly, unless you are able to decipher them yourself they're probably not worth seeing anyway since as a mineral owner you really have no say in how they drill the well anyway other than what is stated in your lease.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Minerals owned by LLC at risk in lawsuit? Asked 10/25/2014
Q: My family has a LLC that contains 110 acres of surface and minerals. If there were to be a surface liability, are the mineral acres at risk to be taken in a lawsuit? Is it a good idea to have the surface and minerals in the same LLC? Thank you
A: You'd probably want to consult an attorney on that one. My opinion (non-attorney) is that anything the LLC owns could be at risk in a lawsuit, since the plaintiff would tend to go after any and all assets owned in order to be made "whole" etc.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Atoka Oklahoma - Higher bonus offer from Independent Asked 10/19/2014
Q: We received a lease offer for a 25% royalty with no bonus from a large well known company drilling the proposed well. They recently also filed for a pooling. Now we have received an additional offer from an independent company for a 25% royalty and $1500/acre. I have been warned that there are potential issues when you lease to someone other than the company drilling the well. . Can anyone explain what these issues are and also if this is ever advisable?
A: I'd go with the $1500/acre and 25% royalty rather than just the 25% royalty alone. Any potential "issues" would be outweighed by the bonus in my opinion, and it's rare that it matters WHO you lease to as long as the lease itself is a good one (terms and bonus both.) Likely the person who offered the lease bonus is wanting to get a peek at the well and so is hoping to convince you to lease to them because they don't own any minerals there themselves. Leasing from you will allow them to become a working interest owner in the well and thus be able to participate in the drilling of it.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Husband listed on my lease entitled to royalty also? Asked 10/17/2014
Q: If my husband is listed as a Grantor on my oil and gas leases will he i titled to royalty funds?
A: The owner of the mineral rights will be the party entitled to receive royalty payments. If you are the sole owner of the mineral rights then they shouldn't have put his name on the lease along with yours. They should have listed you as the only Grantor, and stated you were "a married woman dealing in her sole and separate property" or similar.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
www.mineralhub.com
Latimer county lease offer... Asked 10/11/2014
Q: I have just received the following offer....\n \" 7.8125 net mineral acres in Section 8, 5N-21E. We are leasing for Unit Petroleum and they are paying $202.00/nma, 3 years, and 3/16 royalty. This would come up to a total bonus of $1,578.13. \"\nI appreciate it so much if you can tell me if this is a reasonable offer. Thank you. Ann\n\n
A: Probably is "the going rate", since there is little competition for leases in the immediate area. Whether that rate is "reasonable" or not only time will tell. If no one else is interested in this area (currently appears to be the case) then likely you won't do much better. I'd concentrate on terms other than the bonus in this case (depth clause, no-deductions clause etc.)

The Mineral Hub
Atoka County, OK Lease Offer Asked 10/10/2014
Q: My brother and I were recently offered $125 an acre and 3/16 royalties for two areas in Atoka County. They said if we didn\'t accept the lease on those terms they would force pool and that\'s all we\'d get either way. From what I\'ve read, force pooling is a real thing in Oklahoma. Is that amount and royalty decent for that area? How can I find that type of info? What questions should I ask? Should I just get a lawyers assistance? I\'m a little lost and the more I read, the more questions I have. Thanks in advance.
A: Atoka County is a big area. No way I can tell you whether that lease offer is fair or not without knowing where in the county it is (legal description.) You need to know what's going on around you before you can determine whether an offer is fair or not. Checking with other nearby mineral owners to see what they were offered is the best method to determine what the going rate is in my opinion.

Looking at recent nearby forced-pooling orders would be another, as the bonus amounts offered are often indicative of what was paid in the area just prior to the forced-pooling. Yes, forced pooling is certainly "real"; though most companies would rather lease from you than force pool you.

We answered a similar question for Seminole County, OK that was asked on 9/16/2014. You might check back through the FAQ page to find that one as I think the answer we gave would be helpful to you in determining whether the offer you received is fair or not.

The Mineral Hub
Does a spouse share ownership? Asked 10/09/2014
Q: Is a spouse a legal grantee with her husband on a mineral\ndeed willed to him by his father? Their were 3 brothers \ngiven equal shares of the mineral rights in 1967. One \nbrother has died and another is terminal. The remaining\nbrother formed a LLC, included the co-owned lease as an\nasset without the approval of the wife. It gets more \ncomplicated but I need to know if I have a legal claim to the\nmineral deed?
A: Not usually, unless perhaps the minerals were on the "homestead" (under the house.) If Dad gave the (non-homestead) minerals to the kids prior to his death, or (especially) via a will, then the wife gets nothing.

The Mineral Hub
Trip to lawyer eats bonus Asked 10/05/2014
Q: I took a lease on minerals only to an oil and gas attorney. The Landman sent it back and the large company rejected the majority of what the attorney added. Now I don\'t want to bring it back to attorney because his fee will eat my bonus. What are the MOST important things to worry about when you just own minerals?
A: Depth clause, no deductions clause, shut-in limitation clause. You should be able to find definitions/examples of these on the Internet. If the company won't accept at least a depth clause and a no-deductions clause then I would not lease to them.

Also would shoot for a straight 3-year (max) lease, rather than a 3+2(option) lease, unless perhaps they agree to pay double the original bonus if they extend it for an additional two years.

3/16 royalty would be the minimum royalty I'd accept, even if the bonus was higher for 1/8.

The Mineral Hub
Texas unclaimed property question... Asked 09/30/2014
Q: during the 50\'s someone came to san antonio looking for my grandfather from edinburg, an investigator named mr. canales, stating that my grandfathers grandfather had left him millions in land and oil, account in suspence until it was claimed, i found some royalty and production payments in texas unclaimed property .25 cents and a few others, my grandfather passed in the 60\'s during the 80\'s we found mr. canales, someone had burned his office down and all paperwork. I have filed a claim. what else to do?
A: You can also do a "name search" on www.missingmoney.com to see if your relative's name comes up. You'd have to prove you are a rightful heir to claim anything.

You can also try the site below. It looks to be the "official" Texas site for unclaimed property.

http://www.window.state.tx.us/up/

The Mineral Hub
Mineral Deed or Assignment of Mineral Interests Asked 09/30/2014
Q: Mineral Interests are held in a simple Trust. The sole Guarantor of the trust dies and passes all MI\'s to 2 beneficiaries to be divided 50/50. Does the trust file an executed mineral deed or simply file an assignment of mineral interest with the county? Is there a difference? It seems to me the Trust is just passing along the MI\'s not \"selling\" them to the beneficiaries. Any insight would be appreciated. Thanks.
A: The Trustee should execute a deed to the beneficiaries. The beneficiaries should then file it of record in the county where the mineral rights are located. An "assignment" would effect the transfer as well in my opinion, but a deed (quit-claim deed, mineral deed etc.) is a more common conveyance when dealing solely with mineral rights.

The Mineral Hub
Mineral vs. royalty deed? Asked 09/29/2014
Q: My families mineral interest from a 1908 deed reads \"all of the one sixty-fourth of the oil, being one-eighth of the oil royalty and one-eighth of the gas royalty or rental that may be paid for gas which may be produced (land tract details) the interest in the oil Herby conveyed is to be delivered by the operator who may produce thru pipeline free of cost and the interest in the gas rental or royalty conveyed shall be paid by the operator who may produce oil on said land. It is understood that the party of the second part shall pay all taxes that may be assessed on all oil and gas underlying said tract of land....... Having trouble deciding if this is a mineral or royalty conveyance
A: Looks like it's probably a royalty conveyance. Those old deeds are tricky sometimes. You have to look at the "intent" more closely, which can usually be found in the body of the deed rather than simply its heading.

A "royalty" deed will usually include words such as oil and gas "produced", "saved", and/or "marketed"; whereas a mineral deed will usually include a phrase to the effect of oil and gas "in, on, and under." Your example includes both the words "royalty" and "produced" which leads me to believe it is a royalty deed.

If the tract is not currently producing it's probably not worth pursuing, but if it is, then you might have an oil and gas attorney look at it as well for his/her opinion.

Hope this helps.
The Mineral Hub
Prooving Inheritance for Mineral Rights Asked 09/25/2014
Q: We have been getting royalty checks for the past 12 years from a family heir account for my uncles portion of mineral rights owned in 5 counties in West Virginia. (my uncle inherited them from my grandfather) My brother and I were the only surviving to my uncle and he passed away in Florida. We did do a Summary of Administration in Florida due to my unlces estate being small. The mineral rights were not listed as an asset when we did this. Now fast forward to current day and there has been in interest is the properties and the heirs attorney is asking for my brothers and mine proof via my uncles will that we did in fact inherit them. There is no will just the Summary of Administration we filed down here. Is this suitable for their request? And since there is no will can anyone argue that we aren\'t entitled to them? (We are the only surviving relatives to my uncle- he was my fathers brother, never married, no kids and my father passed before him.)
A: No will means the laws of intestate succession will apply. Since the mineral rights are in WV you'll need to check their intestacy laws.. You may also be required to get the estate probated in West Virgina (will or no will) before you are considered the legal heirs. This will depend on the company or buyer. Some will require it, some won't, but always best to get it done in my opinion in order to avoid ownership problems. Having a court 'sign off" on your heir-ship (by having a probate of the decadent's estate done in WV) will avoid problems in the future.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Payne Co, OK hot area? Asked 09/24/2014
Q: How can I find out if this is a hot area now and what\'s going on. Have an offer to buy mineral rights that seems too good to be true.
A: The Oklahoma Corporation Commission is the oil and gas regulatory body for the state of Oklahoma, and on their website you can find a wealth of information about what's going on in the area where your mineral rights are located. You can search for production, completion reports, pooling orders and applications, and other things that the Commission regulates. You can search their oil and gas database from THIS page.
Adverse Possession? Asked 09/24/2014
Q: After doing a chain of title and not finding any owners of the mineral rights (relatives or other), is it possible that the mineral rights could default ownership to the estate owner?
A: Someone owns the mineral rights, and it's very hard to "adversely posses" mineral rights even if the actual owner isn't paying attention. Much easier to adversely posses land than mineral rights.

The Mineral Hub
Probate still needed even if lessee accepts affidavit? Asked 09/23/2014
Q: The oil company is willing to except a affidavit of heirship in lue of a probate. Should I still go thru a probate before they drill?
A: I would suggest getting the probate done at some point because the operator will likely require you to probate the estate before they will distribute royalties to you. While it's common for a company to lease based just on an AOH it's less common for them to actually pay royalties on one once a producing well is completed. If you don't probate the estate the company may decide to place your royalty payments in a "suspense account" until heirship can be legally determined by a court (i.e. by doing a probate of the decedent's estate.)

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Lease offer in Stephens County, OK Asked 09/22/2014
Q: If possible, I was hoping to find some clarity on a few things related to being recently contacted by a landman for an Oil and Gas Lease in Stephens County, Oklahoma.\n\nTo start off, I was completely unaware that I had any mineral rights in my name, and at this time am unsure if the company has contacted the right person. I currently do not live in OK, but grew up in Texas and suspect that possibly my Grandfather was the one who put the rights in my name or named me to inherit them after he passed away a few years ago. My family was surprised that a landman called, and from their reaction I don\'t think they know or have any information that can help me (short of digging through probate records related to my Grandfather). I recently spoke with the County Clerk\'s Office in Stephens Co, and they searched their database for both his and my names, but nothing came up (their searchable records go back to about 1992). The woman I spoke with suggested that before I sign anything, I should contact the land company looking to lease the land and try to get some more information from them (what type of document they found my name on, book and page, or probate documentation), because there had to be something that triggered them to specifically contact me. If there is a certain date or time period from whatever document they are working from, then she\'d be able to search for me to help me find out what exactly I own rights to. She also gave me the names and numbers of a few gentlemen that could help me physically search the records in Stephens Co if it came down to that. \n\nDo you have any suggestions about the above, or know of any other resources that I may be able to utilize to gain a better understanding of what exactly is in my name? From reading several of the questions that you\'ve previously answered, it appears crucial to know exactly what you have so that you can negotiate effectively for the leasing.\n\nThe offer from the land company is as follows:\n\nA recent review of a Pooling Application Respondent List, suggests that you are the owner of an undivided mineral and/or leasehold interest in the above captioned lands.\n\nWe are offering the following terms for a three (3) year Oil and Gas Lease:\n\n$3,500.00 per acre bonus consideration calling for 3/16th royalty in the event of production.\n$2,900.00 per acre bonus consideration calling for 1/5th royalty in the event of production.\n$1,800.00 per acre bonus consideration calling for 1/4th royalty in the event of production. \n\nI\'m not sure what would be best out of these options, but it sure seems like there\'s something happening in that area.
A: Pooling Orders are notorious for including the names of owners who either no longer or never did own anything in the pooled section, but I would call the land company that made you the offer and ask them whether they have "run title" yet. If they have, then it's likely you do own minerals here. If not, then you might say you are interested, but you'd prefer they run the title first, then contact you again once they're "sure."

You might also want to read my leasing tips article on the Mineral Hub News page of this website BEFORE actually signing a lease with them. The offer sounds about right,and is probably better than average for this area. If it were me I'd consider all the bonus options, depending on how you are set for cash. They all sound fair to me for this area, which is fairly active as you suggested.

If they do push you to go ahead and lease anyway (before they check the title) then I'd suggest you NOT "warrant" your title (strike the warranty language in the lease.) I'd also get them to exchange a check (not "bank draft" or "payment order") for your signed lease IN PERSON (they can send someone to meet you.) If you don't warrant the title, and it turns out you don't own anything, then you'd have a good argument for keeping the bonus anyway, since you didn't "warrant" (i.e. promise) that you owned anything there.

If you decide to lease before they check title and confirm your ownership, and you let them "pay" you with a bank draft or payment order, then they will run your title prior to paying it off because the draft/payment order usually gives them at least 30 days to run title before paying. If they discover you do own, they will pay the draft, if they discover you don't, they will not pay it. That said, I prefer the "exchange lease for check" method in most cases, since some companies will take "forever" to pay you (assuming you own) once they have your signed lease in-hand, notwithstanding the payment date listed on the draft/payment order. They don't usually do this "on purpose" but in busy areas companies do get behind schedule and paying off drafts late is one thing that happens in such cases. If they don't have your signed lease in-hand though, then your minerals won't be tied up waiting on them to pay.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
www.mineralhub.com
The Mineral Hub
Lease offer in Seminole County, OK Asked 09/16/2014
Q: I received a lease offer in section 11-11N-7E of Seminole County, OK for $175 per net mineral acre at 3/16th. Is this the going rate for bonus in the area? The same lessee has 3 wells producing oil and gas in sections 14-11N-7E, 10-11N-7E, and 13-11N-7E (that I know of). Thanks.
A: It might be. I'm not familiar with that area. Lease bonus information is not generally public information, and therefore it is inherently difficult to verify whether an offer you’ve received to lease your mineral rights is “fair” or not. There are however, several methods you can use to at least estimate the going rate in a given area.
One of the best methods would be to check with other owners in your immediate area to see what they were offered. Many owners are more than happy to share at least the initial offer they received in an effort to help other mineral owners in the same area make an informed decision.

In general the more activity there is in a given area, the higher the lease bonus amounts will be. In areas with little activity, or sparse competition between companies you could initially be offered as little as $10/acre. In “hot” areas even the initial offers received may be well in excess of $1000/acre.

One way to gauge the level of leasing activity in your area would be to visit the county clerk’s office (either online or in person) and search for recently filed leases on or near your property. If there have been no leases filed recently in or adjacent to where you own, and you haven’t been contacted to lease, that would indicate there is likely not much current activity in your area. If recent leases are found, you could use the information on the lease to contact either party to the lease by mail.

Another way to determine where your initial lease offer is within the overall budget of the lessee would be to simply ask the landman a few questions. One of the first questions I ask a landman is how long they’ve been buying leases in my area this time around. If they’re just starting out it’s more likely that their first offer won’t be their best. On the other hand, if they’ve nearly finished leasing the landman may be under some pressure to “wrap it up” and thus may offer you more than they have offered others. This is especially true if they do not plan to “force pool” the section (which costs them money and causes them to have to “testify” at the pooling hearing as to how much they’ve been paying everyone.)

An oil and gas attorney familiar with your area would be another way to go as many keep track of local leasing trends and are familiar with what companies will, or will not, accept in a lease addendum. Local banks that manage mineral rights for their clients who own mineral rights in your area would be another possible information source. Often such banks have a trust department, and the trust officer might be a valuable source of information in that case.

Another fairly reliable indicator of the lease bonus amounts being paid in your immediate area would be those listed on recent nearby forced-pooling orders issued by the Oklahoma Corporation Commission. The bonus amounts listed in forced-pooling orders often are indicative of the average bonus paid by the applicant oil company prior to the forced-pooling order being issued. You can search for pooling orders that have been issued recently by the Oklahoma Corporation Commission on their website.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Value for purchasing cousin's mineral rights? Asked 09/16/2014
Q: Hello: My out of state cousin has offered to sell me her interest in mineral rights in Phillips County, Montana. She has an undivided interest(1/3), with the rest of the\nfamily(cousins). What is a fair formula to determine value on producing (Natural gas) land in Phillips County, Montana? Or for that matter, any place.\n Thank You
A: Rule of Thumb: Pay her between 36 and 72 times the monthly average of her royalty payments (by production month) over the past six months. For example if they've been paying her an average of $100 per production month over the past six months, then $3600 to $7200 would be your offer. In "hot" areas you should offer towards the higher end of this range. If a new well is about to be drilled and she owns more than a few acres you'd want to consider paying her for that potential "big first check "as well since she won't own them when it comes in.

The Mineral Hub
How to find mineral rights I own in North Dakota? Asked 09/15/2014
Q: I know i have mineral rights in north dakota. My sister did the legal work a few years ago. We dont talk anymore. I want to know how i can find out about my share of these rights. Is there a way to find out? I have my grandfathers name, mothers name, as well as my sisters name. What else is needed? Any help would be greatly appreciated. Thank you
A: The easiest way would be to ask your sister of course, but alternatively you could visit the county clerk's office in the county where the mineral rights are located (assuming you know) and then research the title either by name or by legal description. For more info on how to research title you can view an article I've written about the subject here.

If you don't know which county for sure you could visit the www.ndrin.com website and, for a fee, search by name in most ND counties until you determine the correct county, then continue your search either online or in person.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Texas NPRI: To pool, or not to pool? Asked 09/12/2014
Q: I have a fixed 1/16th NPRI on a unit and am being asked to ratify the pooling agreement. My acreage accounts for only .004% of the entire Unit. I already know of 2 horizontal wells where the part of the wellbore crosses my tract (&9 others) and need to know what amount is owed to me if I don\'t agree to pool? In all my research I cannot find an answer. For a vertical tract, I understand I\'d get 100% of my 1/16th but Horizontal appears to be a very gray area??? And the penetration and end point is not on my tract. I\'m about halfway point of the wellbore. What is my better course of action? By not pooling, can the drilling company just not pay me anything and tell me to fight them in court? Or, are they obligated to work with me and put some agreement in writing? Thanks.
A: You asked a great question! As you probably know, as a NPRI owner you are in this case not bound by the pooling clause contained in the OGL the mineral owner signed, thus the company has asked you to "ratify" (agree) to the pooling clause in the lease, thus effectively pooling your interest. Should you ratify?

If your interest is included within the drill site tract then I would not ratify the lease, because if you own within the drill site tract and ratify, your interest would be "diluted" with other tracts. If you refuse to ratify and own within the drill site tract, the WI owners must "make up" the difference since you'd be getting paid more than others who were pooled, and perhaps more than your mineral owner.

I realize you are likely not on the drill site tract, and also see your point as to vertical vs. horizontal and agree it's a bit (more than a bit actually) of a "grey area." I frankly don't know how companies are going to handle payment of royalties from horizontal wells to NPRI owners who refuse to ratify. I would think though that any tract penetrated by a horizontal well could arguably be considered part of the drill site tract (see Texas case Browning Oil Co. v. Luecke) and so if a well penetrated your tract horizontally it would potentially benefit you to remain unpooled. That's a question for a good O&G attorney who is up on the latest practices.

Assuming however that you are not within the drill site tract you should ratify and let them pool your interest. This way, you would receive your proportionate 1/16 share of royalty from the entire unit. Even a "diluted" interest is certainly better than nothing. I think they could leave you out of it entirely if you don't ratify.

Note that if you do decide to ratify it won't benefit you if they do eventually drill a well in "your" tract, since your interest will already be pooled for future wells. That said, I would still ratify if it were me, since the WI owners may try to avoid drilling your tract in the future if your interest is not pooled.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
"Mineral" vs. "Royalty" reservation. How to tell the differe Asked 09/11/2014
Q: In my deed, there is a reservation of 1/2 oil and gas royalty on my property from 1917. The oil and gas company I\'m working with told me that before (1920) royalty and mineral rights meant the same thing. In otherwords, I own only 1/2 my minerals. My attorney argues this point but is unable to provide any proof that those two words, royalty and mineral rights, meant two entirely different things. even in 1917. Where can I find the true meaning of the language used to determine ownership of minerals in Ohio from that era? Thanks!
A: It was common in the past for a "royalty deed" to in fact convey mineral rights, rather than just the right to receive income (royalty.) You need to look at the BODY of the conveyance in order to determine whether it's a mineral or royalty deed. The language is there usually, and can be used to "decide" which type of deed you actually have. The "heading" of a deed can be misleading, especially back then.

A true "mineral" conveyance will have words to that effect within the body of the deed. Same for a royalty conveyance. A good oil and gas attorney should be able to help you interpret what was conveyed, based on previous court decisions that have been used to interpret ambiguous conveyances.

The Mineral Hub

Spanish landgrants Asked 09/11/2014
Q: What info. can you give me about the spanish land grants in Texas? I am an heir , have all the documents to prove it, and also all the leases from the texas railroad commission but now i don\'t know what to do next. Do i have to contact the company operators? I hope you can help me please,i\'ll appreciated. Thank You
A: If the property is included in the drilling and spacing unit of a producing well then yes, you should contact the operator to see if they have you, or one of your predecessors-in-interest "in pay." Below are a couple of links you might find useful in your research of land grants in general:

http://www.glo.texas.gov/what-we-do/history-and-archives/the-collection/land-grants/

http://www.expressnews.com/news/local/article/Land-grant-heirs-see-gold-in-old-mineral-royalties-4815134.php

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Should we sign division order if minerals not owned? Asked 09/10/2014
Q: We purchased a home and land a couple of years ago and received a warranty deed stating that we were purchasing surface rights only. There was recently a new well drilled and we just received a division order from the production company. Should we sign this division order? I just can\'t figure out how they would have come to the conclusion that we were entitled to payment.
A: Once a producing well is completed, a "division order title opinion" is usually ordered by the operator. It is usually done by an attorney who charges a lot for the work and it's unusual for a mistake to be made such as you are describing, but it does happen occasionally. I'd either go ahead and sign it, send it back, and include a note saying you were not aware you owned any mineral rights, or contact the company prior to signing it and ask them to double check their title and then let you know what they find and whether they still think you own mineral rights in their well.

A division order is not required in order to receive payment in many states so you may end up getting a royalty check even if you don't send back the DO. If you do receive any royalty payments, I would put the funds into an interest-bearing bank account (if such a thing still exists ha ha!) somewhere and confirm your ownership prior to spending it.

If a company pays you by mistake for something you don't own, it's likely they, or the current mineral rights owner, will "ask for it back" at some point, though most states also have a statute of limitations for such claims, though same can be 'tolled" if you knew, or "should have known" you didn't own anything so do be careful.

You can always hire someone to "run your title" at the county clerk's office to verify what you do, or don't own in the way of mineral rights here, but the fact that your deed stated "surface only" would indicate to me that you weren't granted any mineral rights by the previous owner. You might send a copy of the deed to the company as well, or at least make them aware of it. If they still feel you own minerals here after that I'd ask them to explain themselves.

Hope this helps you out!
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub


Can I keep the mineral rights on land I sell? Asked 09/05/2014
Q: Mineral rights on land I sell?
A: If you own the mineral rights when you sell the land, then you can keep them if you wish by "reserving" them on the deed.

The Mineral Hub
Afraid to lose out on a lease... Asked 09/04/2014
Q: I am representing myself and my two brothers and another relative in lease negotiations with a company we already have leases with in Texas. I had my Dad review the lease (he\'s a retired lawyer) and he said I should ask for more bonus and a larger percentage. We each have individual lease documents in hand, with offers of $50 for 3 years with extension of $75 for two more years. They are offering 25% royalty on all depths except one (Caddo formation) because of \"water issues and cost.\" My share and my two brothers\' share are 4.86875 acres each. My other relative has a share equal to all of ours combined. I sent an email with my Dad\'s suggested counter proposal to the land services company negotiating for the lessee. I am nervous that I may lose out somehow. I asked for $500 per acre and 25% for all formations. I have not gotten as low as $50 in a number of years. Do you have any suggestions? I took about three weeks to respond, and they have not responded to me yet, but it has only been 11 days since I sent them the counter-proposal.\nHere is the description: That certain 246 acre tract of land, more or less, being that portion of the S.P.R.R. Blk 4, Section 27, Abstract 203, in Stephens County, Texas which is situated adjoining against and above the northern boundaries of each of the following three (e) tracts of land, those being: Tract One: 160 acres held by the Black 27, #4, Tract Two: 80 acres held by the Black 27, #3, and Tract Three: 80 acres held by the Black 27, #1, and containing 246 acres, more or less (herein called \"said land\").\nCould they sign everyone else and leave us out? I would prefer that the legal description not be published in you FAQ section. I know that there is no forced pooling in Texas yet, but I have been doing some reading and I am worried about being excluded from this lease by asking for too much. I read some info about well allocation and it worried me. \n
A: If they offer you a higher bonus they will also likely reduce the royalty. If it were me I'd have them "strike" the extension clause so that it becomes only a 3-year lease. If they want to lease again in 3 years they can simply renegotiate with you at that point rather than trying to get 5 years up front.

Most companies won't initially "lowball" you for ten times what they're really willing to pay, so I doubt they're really paying anyone $500/acre so countering with that will probably not do you any good. You might read my Oil and Gas Leasing Tips article before trying to strike a bargain with these guys. It includes some negotiating tips you will probably find helpful.

Hope this helps you out!
Frederick M. Scott CMM, RPL
The Mineral Hub
Can husband sign lease on behalf of deceased co-owner? Asked 09/02/2014
Q: In the state of Kentucky, if the property is deeded to a Mr. and Mrs. Smith, and Mrs. Smith passes prior to the property being leased to an O&G company, does this need to be dictated within the lease itself? ex: \"Mr. Smith, widow, of 123 ABC Street, Prestonsburg, KY 53216\"?
A: The lease can be made out to, and Mr. Smith can sign the lease for all of the interest HE owned at the time of her death, if any. If all was owned by her, then the personal representative of her estate would need to be listed as Lessor and sign the lease if heirs have not been legally determined yet (by a judge.)

If they owned as "joint tenants in common" then her interest would have passed to Mr. Smith automatically upon her death so he could in that case sign the lease for both his and her interest, though the leasing company might require he also execute an "affidavit of surviving joint tenant" to be filed along with the lease.

If prior to her death they owned as "tenants in common", then each would own half and as mentioned above he could lease HIS interest, but her interest would need to be leased by either her heirs or the personal representative of her estate (if her estate has not been probated yet and thus no heirs have been legally determined yet.)

Frankly, the leasing company should be able to tell you exactly what is needed in order to lease the interest of Mrs. Smith. Not all companies will require the same documentation in order to lease the heirs of a decedent.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Documents needed in order to transfer inherited minerals? Asked 08/28/2014
Q: My daughter in law\'s father passed away about 2 yrs ago. Her father shared mineral rights with his siblings. Her father passed away right before they started drilling in the area. Other family has been getting their payments, but she has been told that all she needs for them to release funds, is to bring them a copy of the distribution deed. What is a distribution deed and what does she need to do, or where does she need to go to find the distribution deed ? Her father lived and died in Bexar county TX, but the mineral rights are in Karnes county TX, Her and her brother were co executors of her father\'s estate, which was probated in Bexar county TX.\n
A: I would think all that is required is a copy of the filed probate proceedings or the "final decree of distribution" (part of the probate.) The company just needs to see a legal, filed, document from a court stating "who gets what" basically. A filed copy of the probate could be ordered from the county clerk's office of the county where the estate was probated.

The Mineral Hub
How to keep mineral rights in the family? Asked 08/28/2014
Q: Hi\nI am hoping you can provide me with some advice as to my family\'s mineral rights in Saskatchewan. My father passed away and we are trying to find a way to keep the rights in the family. We looked into setting up either a registered company or a trust but both have rather high annual filing fees - or so I was told. As the rights are not currently leased we are looking for a way to keep them that would have a very low or no annual cost.\nAny help would be greatly appreciated.\nThanks for your time\nGarth Schindel
A: Depends in what state the minerals are in I suppose. In Oklahoma for instance, families set up family trusts all the time, with one of the family members (or some other designated party) becoming the Trustee. There are no "annual filing fees" that I know of simply to have a trust, though of course an attorney will charge you a fee to set it up initially. If you set up a "company" rather than a trust, there might be nominal filing fees payable to the State each year, but I doubt they are very much.

Frederick M. Scott
The Mineral Hub
Expired Lease without active exploration or producing well Asked 08/25/2014
Q: We had an oil and gas lease in Oklahoma that expired Aug 10, 2014. A few months ago we signed a \"top lease\" with the land company which paid us 20% at the time the \"top lease\" was executed and 80% was due at the time the lease would expire so that the lease would automatically renew. However, now the land company does not want to pay the 80% because an oil company has started clearing property for a pad for a drilling rig, but no rig has be set up or drilling started. They state that this automatically extended the lease. I thought there had to be \"active\" exploration or a producing well in order for the lease not to be renewed. Does just starting a pad constitute \"active\' exploration or is the land company just trying to rip us off? Thank you.
A: Unless there is language to the contrary in the lease, then even "clearing" the site or doing other "dirt work" prior to lease expiration will in most cases extend the lease for a reasonable time past its expiration, provided the work continues in a "workmanlike manner." For this reason I always include a clause in my leases stating that a rig capable of drilling to TD (total depth) be on location and actually drilling prior to the expiration of the primary term or else the lease expires.

The Mineral Hub
Statute of Limitations on late royalty payments Asked 08/25/2014
Q: Is there a statute of limitation to collection interest from \nan oil company that made no payments from 8/07 until 5/14?\n\nThank you for your help.\n
A: In most states the SOL is five years, though if you can show they should have been able to "find" you prior to that you may have a good argument to "toll" (stop) the clock and get paid interest on the entire time. In any case, I would think you are due interest back to the SOL date in your state (most are five years.)

The Mineral Hub
No lease, and was force-pooled. What to do? Asked 08/20/2014
Q: I moved about 9 months ago. The address was forwarded. I have recently received two Division Orders to the correct address but never received a Lease. They said I was force pooled. Of course, my royalty was very low and I am unhappy about this. Is there anything I can do? Thanks for your help. NM
A: If the company made an effort to contact you but couldn't because they didn't have a current address, then you are likely pooled. The fact that you received the DO's at the current address indicates they did have your address though. Usually companies will use certified mail to notify owners of a potential pooling. You might check with them to see if they will let you choose one of the higher royalty options under the pooling and also ask them why they never sent you a lease offer since apparently they did have your correct address (i.e. they sent DO's to the correct address.)

The Mineral Hub
Convey mineral rights to surface owner in California Asked 08/20/2014
Q: A Trust needs to get rid of it\'s 1/9th non producing mineral rights under a Los Angeles City Building. LA City is non responsive to our request to gift the MI\'s. Can we just file a Mineral Quitclaim Deed to the City of Los Angeles without their permission gifting mineral rights. Note none of the Trust Beneficiaries want the interest.
A: If the trust owns the mineral rights, then the trust can convey the mineral rights to whomever it wishes. You could use a QCD or a regular MD to accomplish this. The Grantor could be whomever you wished. If you want to just give them away to the City I doubt they would have a problem with that. They would not have to even sign the conveyance. Gifting them to a charity might be a better idea though, as the trust may get a tax benefit from that.

The Mineral Hub
Oil and Gas lease encumbered by mortgage? Asked 08/19/2014
Q: If a residental property (on 2.5 acres) is being sold with an active oil and gas lease on title, will that lease have superior position over the new mortgage?
A: You'd need to check with the bank on that one. Most banks would include the mineral rights as well as the land in their mortgage and thus you would not be able to sell the mineral rights without paying off the mortgage first, or without getting permission from the bank. You'd likely be able to collect royalties though without checking with the bank.

The Mineral Hub
Producing tract of mineral interest, verses unproducing mine Asked 08/07/2014
Q: If two separate tracks of land (per called sections) were leased under original lease...and one section was pooled with another not the other of the two...and became a producer...would the other section be held under production even if it were not pooled with the producing section.
A: If you leased both sections, but only one ended up being included pooled into a drilling and spacing unit, then only the section within the unit would be "held by production"; the other would be leaseable again after the primary term expired.

However, In North Dakota (for example) BOTH sections would likely be included in the drilling and spacing unit, and thus both would be held by a well in either. In other states that would not be the case. You'd need to check your state's laws as to this.

The Mineral Hub
Paid from lease date, not "production date." Asked 08/07/2014
Q: My brother and I ea. own a 1/16 interest in OGL in Montague County TX. Company is EOG. We were contacted about a year after production was started and have been paid from date of the lease. We think we should be paid retro the 1st production date and will soon make this request to the company. We think the delay was caused by my father’s death and that they had difficulty locating him, discovered that he was deceased and found us. We do not live in the area and had no knowledge of OGL exploration in the area. It is also possible that there was some \"title\" confusion and that some monies were paid in error to a third party before we were contacted. Your thoughts?
A: I agree that royalties should be paid from first sales, not from the lease date, though in most cases the lease date comes first, then the well is drilled and production hopefully follows. In your case it's possible they were paying a predecessor in interest until they discovered you owned them. If that was the case, then it's likely they placed the money in a "suspense account' until the proper owner (you) could be verified. I would check with the operator and ask them if such is the case, and if so, they will probably ask you to prove your ownership to their satisfaction prior to releasing the funds paid in error to you. If they instead payed someone else during that time, then you would likely need to contact the person they paid to recover any money since it's your responsibility to alert the company of ownership changes.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Does an active well mean no one else can lease? Asked 08/06/2014
Q: If the initial terms of the mineral rights lease in ND expired many years ago, but there is one active well on the property does that mean that no one else can lease the mineral rights?
A: If the well is producing from under land covered by the original lease then yes, the lease will continue to be in effect for as long as there is production from the leased premises. Likely there were words to that effect in the original lease.

If production ceased for a reasonable length of time with no evidence of them trying to get it going again you could probably argue that the lease had expired if the lessee didn't voluntarily give up their claim to it. Once the lease expired of its own terms you could then lease the mineral rights to someone else.

Frederick M. Scott
The Mineral Hub
Improper lease? Asked 07/29/2014
Q: My aunt received and signed a lease with a landman, but on the lease, the section where it states \"party of the second part,\" Lessee, has been left blank. This does not seem right to me. She seems to have a binding legal contract with no one...is that correct? Have you ever seen this done before?
A: Likely the guy is planning on "flipping" (selling) the lease to someone else (an oil company likely) for a profit. I would rather see her lease to the actual company rather than a "flipper." Note: It's common for oil companies to hire land companies to do leasing for them, but they usually include their (the land company's) name on the lease, unlike this guy. He'll probably fill in the name once he finds someone to buy it from him. It will eventually be filed in the county clerk's records and you can see who he assigned it to.

The Mineral Hub
Recievd offer to sell mineral rights. Asked 07/28/2014
Q: Recently we have been contacted by a company that is wanting to purchase our mineral rights in Jackson county ok. We are considering selling and we are wanting to know if what they are offering is a fair price. Any info would be greatly appreciated!
A: List them for sale with us (it's free) and we will help you find a buyer who is offering a fair price. We can not do free evaluations for anyone but our clients. If you'd like us to evaluate the offer you received we'll be happy to, but must charge a minimum of $750 unless you list them for sale with us so we can market them to buyers for you. That's really the best way to market these if you want to sell them. We have MANY buyers who use our site, rather than just one and we'll make sure any offer you accept is fair.

Frederick M. Scott
The Mineral Hub
Signing bonus cover entire primary term of lease? Asked 07/28/2014
Q: Is the \"signing bonus\" supposed to cover the entire lease or just the first year and how can you tell? (They want a 10 yr. lease)
A: It covers the entire primary term of the lease. I would not agree to a ten-year lease in most cases.

You never know what leases will be going for in ten years, or even five for that matter. Locking in "today's rate" for ten years might not pay off for you if prices increase in a few years. Better to agree to 3-5 years instead, though they may lower the bonus on you if you do that because as I mentioned above, the bonus is their way of "thanking" you for signing a lease with them....for the entire primary term.

The Mineral Hub
Who gets the mineral rights in Mississippi? Asked 07/27/2014
Q: My grandmother\'s husband had land before their marriage in MS(seperate property state). He sold the land, but kept mineral rights while they were still married with her signature on that deed( with words like we, they- very inclusive sounding). He died and left all assets to his son(previous marriage). Are the mineral rights all his to give or did she retain some jointly when she signed on the deed when surface was sold? Oil is being pumped now.
A: You'd need to have his estate probated in the state where the mineral rights are located order to determine who gets what. If the judge determined he had a valid will AND owned 100% of those mineral rights himself at his death then the mineral rights would pass according to the will.

If he had no valid will, then they would pass according to the State's "intestate succession" laws and if he had a spouse at the time of his death, she would likely get 1/3 or 1/2, and any living children or their issue (their kids) would get some as well. Depends on the state as to what the proportions would. be.

His heirs should get his estate probated in the state where the mineral rights are located.

The Mineral Hub
Who can remove the operator? Asked 07/26/2014
Q: Under what circumstances can you remove an operator from an assigned lease?
A: Generally, only the other working interest owners (the other participants in the well who have contributed money, or leases they've bought) can remove the operator, and they would have to have a majority vote to do it, barring some environmental violations, in which case you might be able to get the EPA involved.

If you can show the operator is not complying with some state laws you could also petition the state I suppose. You'd want to make sure the other WI owners were on board first though I would imagine.

The Mineral Hub

Worth looking for mineral rights in Tennasee? Asked 07/24/2014
Q: Question is it worth looking for minerals on 85 acres of land in tennessee?
A: Only if there is production or drilling nearby. A check of the records at the county clerk's office wold tell you who owned them however. If you own the land, would be nice to know whether you owned the mineral rights or not.

The Mineral Hub
Mineral lease from 1894 Asked 07/18/2014
Q: I have acquired mineral rights to property that has been under a minerals lease since 1894. Recently, a company was assigned leasing rights below a certain depth that was not obtainable in 1894. Is this legal? or do I have an argument.
A: 1894? Wow, that's quite a long-lived lease isn't it? Most leases don't produce for more than 100 years. Pennsylvania I would guess? At any rate, I think even those old leases cover depths to the center of the Earth unless limited by the lease document so it appears the current lessee assigned some of its rights below a certain depth to another company so that company could drill to and produce from those lower formations.

Should be a good thing for you right? More potential production from your very old lease. What would you argue for anyway? A bonus payment? Better lease terms?

If the current lessee owns the right to drill to all depths (likely) then you wouldn't be entitled to any additional bonus or renegotiation of your current terms simply because the lessee assigns some of it's already-squired rights to another company.

Sorry to be the bearer of "bad" news, but if you want a legal opinion on this I'd suggest you check with an oil and gas attorney who is familiar with the area in question.

Frederick M. Scott
The Mineral Hub
Do all family members have to sign the same lease? Asked 07/17/2014
Q: When you sign a lease with a company for leasing the land for a well with an upfront bonus, will only the siblings be on the lease, or will their spouses be included on the lease.\n\nAlso, with a lease, if you have 7 siblings who own the land, will all 7 have to sign or just a majority?
A: Usually each mineral owner will sign their own lease individually, rather than everyone in the family signing one lease. If some don't want to lease that's fine, the others that do want to lease can still lease their interest. Some companies prefer that the spouse signs the lease as well even if the mineral rights didn't come from their side of the family.

The Mineral Hub
Can I sell my mineral rights even though they are leased? Asked 07/17/2014
Q: Can I sell my mineral rights even though I have already leased them?
A: Yes. You can sell them if they're leased, not leased, producing, not producing. Doesn't matter the status; as long as you own them you can sell them.

The Mineral Hub
Leasing help in Pottawatomie County, OK Asked 07/17/2014
Q: Our greatgrandfather retained the mineral rights to 120 or so acres in Pottowatomie County OK. That was split into two sections when it went to our grandmother and her sister. Our grandmother\'s portion went to my father and his three sisters. They have all passed so now it comes down to all of their children and grandchildren,\nWe have been offered a lease and don\'t completely feel comfortable in what we are being told by the landman. He does work for the oil company after all.\nMy sister and cousin and myself have been trying to learn as much as we can but all of us are going into information overload about what we should be aware of and what to ask for as far as the lease bonus, Pugh clause, lease term, paying back a portion of our income for the processing of anything produced out of the ground, etc.\nI live in Washington state and since there isn\'t any or very little oil and gas produced here, there really isn\'t anyone to talk to regarding these matters. Does anyone know of a good oil and gas attorney in Oklahoma that will at least do a consultation with us so that we may feel more comfortable with doing a lease?
A: Before you hire an attorney to help with your leasing, you might want to read our article on "Oil and Gas Leasing Tips" that was published right here on the this website. You can visit this link to read it or simply click on "Mineral Hub News" from our home page and scroll down until you find it.

You might also consider joining the National Association of Royalty Owners (NARO.) You can visit their site by going to www.naro-us.org.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
FMV valuation for county mineral taxation Asked 07/14/2014
Q: What information and or documents would we need in order to protest the taxable value of our minerals as assessed by our county appraisal district in Texas? How do they assess values? They have increased our fmv dramtically over the past 15 years, while the income received has not increased accordingly.
A: You apparently are basing your assumption that the tax rate is too high on something. I'd share your reasoning with them and see if they agree. It sounds like you're basing your protest on the income not increasing at the same rate as the taxes. I'd mention that to them and see what they say.

The Mineral Hub
Existing Mineral Lease? Asked 07/08/2014
Q: I recently purchased a property .\nHow do I find out if there are existing mineral leases in place on this property.
A: You'd want to check the records of the county clerk in the county where the land located. All leases are filed of record there eventually.

Frederick M. Scott
The Mineral Hub
How do I find where my minerals are within a tract of land? Asked 07/07/2014
Q: How do I find out where my mineral acres are of 335? Four family members have signed a lease claiming that they have another part of land... I need to know where 172 acres are located or how to find out if they are part of the 335 acres we all own?
A: Likely you have an "undivided" interest in the 335-acre tract, rather than a divided interest, meaning that you all own a portion of each molecule of oil and gas under the entire tract and thus it's not possible to tell which "part" of the 335-acre tract yours are in.

Frederick M. Scott
The Mineral Hub
Existing mortgage prevent selling mineral rights? Asked 07/03/2014
Q: Can you sell or lease your mineral rights if you have an existing mortgage?
A: If the mineral rights were mortgaged along with the land then you'd have to get the bank's permission to "release" the mineral rights from the mortgage in order to sell them. I think you could probably lease them however. The leasing company would let you know for sure because they will see the mortgage when checking your title and if it's an issue for them they'll let you know.

The Mineral Hub
Lessee requesting us to fill out a W9. Should we? Asked 07/03/2014
Q: I am completely new to this. Received a lease to sign and send back. We own a home on .17 acre and Bonus Price is $1250 per net mineral acre and Royalty is 3/16th. They are requesting a five year term. The landman is requesting us to fill out a W9 to send in with our lease agreement. I am always hesitant to give out social security numbers, etc to parties I don\'t know. Any advice? Is this normal?
A: Yes, it's normal. You don't HAVE to fill it out, but if you don't then once the well starts producing they will withhold 30% or so of the income for the IRS. Same goes for the bonus actually,. The 1099 is needed by them so that they'll be able to report the income they pay you to the IRS each year. If the company is a "company" and not some yahoo that doesn't seem legit then I'd go ahead and send it in.

I'd also try to negotiate a three-year term on your lease, rather than five. Some companies even try to add an additional five years on their five-year leases in the form of an "option to renew." I definitely wouldn't go for that if it's in there because you would in effect be signing a potential ten-year lease. You never can tell where bonus prices will be in five, or even three, years; so I always try to limit my leases to three years when possible in case prices go up as my lease nears expiration.

Frederick M. Scott CMM, RPL
The Mineral Hub
Royalty Deed to Campbell Co. WY mineral rights Asked 07/02/2014
Q: Hello - I recently found an original Royalty Deed, detailing a small percentage to mineral rights on a specific plot of 1140 acres in Campbell County, WY. The deed was executed and sealed in Denver CO, in 1960, naming my now deceased father as the owner. How can I determine if this deed has any value? My father\'s estate has been long settled and I have all documentation proving that I am his beneficiary. Any advice would be appreciated.
A: You would want to check to see if there is any production in that tract first of all. If so, then it would be worth investigating. Colorado has a website where you can check for production I'm sure.

My feeling is the interest was either sold or the royalty expired long ago but could be worth checking into. Keep in mind that if this had any significant value you'd likely be aware of it as someone would have attempted to contact you by now to either buy it or lease it.

Depending on what TYPE of royalty interest was conveyed to your father, it could well have expired by now and be worth nothing. An overriding royalty interest, for example, will simply cease to exist once the production from the lease from which it was carved is no longer producing oil or gas. A non-participating royalty interest on the other hand, is related to actual ownership of mineral rights and thus does not usually expire unless so stated in the conveyance. Take the deed to a local oil and gas attorney and he/she can explain which type you have. It's also not that uncommon for an actual mineral deed to say "royalty deed" at the top, when in fact it's mineral rights that were conveyed, not simply royalty rights.

If you'd like to fax it to me I'll be happy to take a look and let you know what I think. 817-887-3400. Be sure to reference this question and include your contact info if you go that route.

Frederick M. Scott CMM, RPL
The Mineral Hub
Do you do estate-planning mineral appraisals? Asked 07/02/2014
Q: My mother-in-law\'s (93 years old) trust, for which I am the trustee, owns about 900 acres of land and minerals in Ellis County Oklahoma. 5 new wells have been drilled in the past year. Not all are in production yet. For purpose of estate planning and future tax implications we need to have a Appraisal completed. We have no desire to sell, but do you do appraisals?
A: We do not normally do mineral appraisals other than for our clients who are selling due to the time and effort needed to do it accurately. However, if you’ll send us the legal descriptions (section, township, range) and acreage owned in each section I may be able to do a “rough” appraisal that might suffice. You can use the Contact Us form on the Mineral Hub to do that.

You might also read the “What are my Mineral Rights Worth” article in the Mineral Hub News. It will be especially helpful in valuing the sections that already have wells on them.

You might also find some of the other articles on that page helpful, and of course if you all ever do decide to sell we will be happy to assist with that as well if needed.

Hope this helps you out.

Sincerely,
Non-Participating Royalty Interest Asked 06/27/2014
Q: I have been contacted by a landman as a mineral rights owner to sign a lease 3 year term lease and 1/8th royalties interest. When talking to him he said I was part of a non participating royalties interest and I wouldn\'t actually get any royalties just the signing bonus for the lease agreement. Can you please explain this to me a little more?
A: Please click the following link for the answer to your question about NPRI.

NPRI

The Mineral Hub
Net Mineral Acres and Gross acres Asked 06/25/2014
Q: Are mineral rights sold per gross acre or per net acre? How are net mineral acres determined?
A: Net acres are simply the amount of acres you own within a tract. The tract itself would be the "gross" acres, while the "net" would be the amount you own within the tract described.

For example if you owned 40 acres in a 640-acre tract of land, you'd own 40 net acres in a tract containing 640 gross acres.

The Mineral Hub
Jackson County, OK leasing Asked 06/19/2014
Q: In Township 1 and 2 south, Range 24 West, our lease expires July 2014.Does anyone know of any company (ies) leasing in the area and if so, what are they offering?\n\nProduction is nearby but haven\'t yet received new lease offer.
A: Continental Land Resources, LLC filed a couple of leases in 2S-24W this year. I see no leases filed in the other township. No idea what they are offering. Perhaps someone on the Jackson County, OK group over at this forum would have an idea of what is being paid in that area currently.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Do I own the land and mineral rights? Asked 06/13/2014
Q: I did a quitclaim deed when I purchased land from an ex-relative. I now want to sell my land with a home. Now that I am selling to a non relative, and she is going thru a bank for a mortgage-they have done a title search and it states that some company has surface and mineral rights from over 60 years ago. Our lawyer has been trying to locate the owner of the rights, but no one has called him back and we have been trying to close on selling the house/land for 10 months. How long does a company have rights to our property? and what happens if no one contacts us back??
A: If indeed "some company" has owned the surface and mineral rights for 60 years, there would be a record of that filed with the county clerk in the county where the land is located.

The quit-claim deed you used when purchasing the land really didn't warrant (promise) that the "ex-relative" owned the land and minerals, it only stated that IF he/she did, that it would be conveyed to you. To find out what was owned by him/her at the time you purchased you'd need to check the records at the county clerk's office, or have someone do it for you. This is apparently what the bank did, and they determined that you didn't own anything there. Perhaps they would share the information they found with you?

Frederick M. Scott
The Mineral Hub
My 90 yr. old mother in NM wants to sell rights in OK Asked 06/10/2014
Q: My 90 year old mother wants me to figure out what to do with her mineral rights in Grady County OK now before she dies so its not a big problem dividing it up later. We live in Albuquerque NM and don\'t have any idea what to do to get started. She does have one lease to Calvin I think which sends her a royalty of about $300 a month. I have power of attorney and I\'m the excutrix of her will. Should I travel to OK to take care of this? Or what? thanks
A: Post them for sale on the Mineral Hub if she wants to sell them. We'll help you determine what they are worth and ensure they sell for a fair price assuming we find you a buyer. No cost to you if we find a buyer for you.

You'll need to send us several recent royalty checkstubs for the producing property, as well as legal descriptions and acreage amounts for the remaining acreage so we can help you determine what they are worth before offering them for sale.

Mineral rights in parts of Grady County are very valuable currently. If you sell through us we'll help you determine what they are worth currently.

Frederick Scott
Manager
The Mineral Hub
Wrongful party claimed my mineral rights? Asked 06/09/2014
Q: Just discovered that my father\'s mineral rights are being claimed by his wife when I am the one that inherited them. How can I fix this
A: If your father had a will, then you'd want to have his estate probated in the state where the mineral rights are located. The judge, as part of the probate process, would issue a "final decree" stating who gets what from your father's estate according to your father's will if the court finds it to be a valid will.

If your father did not have a will then any mineral rights he owned would be distributed to his heirs according to the "intestate succession" laws in effect in the state where the mineral rights are located. Even if he did not have a will you would want to have his estate probated in court to get an official statement of who gets what.

The Mineral Hub
Minerals and Divorce... Asked 06/06/2014
Q: I am in the process of a divorce. My husband and I have been together for 15 years and married for 13 1/2 years 1999 to 2014. We have a 12 year old daughter together. My husband found he had inherited mineral acres in 2005 those minerals are producing oil and gas. I am on total disability and SSDI. After I pay my medicare I have 750.00 left over. I want 1/2 of the minerals and the house w/land. There is also 2 life insurance polices and he has 49ers / 401k. I have no other income. What are my chances in ND to get 1/2 of the mineral acres. I also want to be the custodial parent to our daughter because my husband has some bad habits and he is gone most of the time.
A: North Dakota is an "equitable distribution" state, meaning that in the event of a divorce, property owned by either spouse will be divided "equitably" by the court. Though that does not necessarily mean "equally", it certainly can mean that, especially as it pertains to property acquired by both parties during the marriage (i.e. a house where both husband and wife are on the mortgage, car loans etc.)

Since your husband inherited the minerals from his side of the family he will likely argue that they should be distributed entirely to him. Whether they are or not would be up to the judge. If the judge feels he doesn't "need" the minerals as much as you do then perhaps at least some of them would be awarded to you. Get a good attorney would be my advice (to both of you.)

Frederick M. Scott
The Mineral Hub
Community Property? Asked 06/05/2014
Q: If my wife and her brother and sister buy mineral rights from a \nthird brother is that community property between them or \nis it community property with their spouse in state of texas
A: Texas is a community property state, meaning that most property jointly acquired during marriage would need to be divided at divorce between the husband and wife who purchased it.

The Mineral Hub
Possible to determine if lease bonus is fair? Asked 05/30/2014
Q: We have been approached by a landman offering lease for rights to property we have in Nolan County, Texas. Is it possible to determine what a fair per acre bonus offer would be for this property?
A: Lease bonus information is not public information, and is therefore inherently difficult to verify whether your offer is "fair" or not. Best method would be to check with other owners in your immediate area to see what they were offered, if anything. In general the more activity there is in a given area, the higher the lease bonus amounts will be. In areas with little or no current activity you could receive as little as $50/acre. In "hot" areas it can rise into the thousands.

You might also contact the county clerk's office in the county where the mineral rights are located to see if they can give you an estimate of the going rate. An oil and gas attorney familiar with your area would be another way to go as many keep track of such things. Local banks that manage mineral rights for their clients in this area would be another possible information source.

Frederick M. Scott
The Mineral Hub
Which year's tax return do I report lease bonus income on? Asked 05/30/2014
Q: we have 360 acres in south central texas.our last lease was paid 10 days before the end of the year.do i have the following year to get my write offs in order or did i just have the 10 days
A: If you received the income during the last ten days of a given year, then you would report the income on that year's income tax return since that's the year you received it. For example if you received the income in December, 2013 then it would need to be reported on your 2013 income tax return whenever you do that year's taxes.

The Mineral Hub
Transferring 50% of my mineral rights to someone.... Asked 05/26/2014
Q: I am selling my home and wanting to give 50% mineral rights to the new owner? I currently have a lease with Chesapeake, but no current account since I have not yet received any royalties.\n\nWhat do I need to do to get this done, to ensure I dont have any issues with my lease contract and what happens afterwards when I begin getting royalty payments?
A: You can convey 50% (or whatever amount you choose) of the mineral rights via a mineral deed or warranty deed at any time. Have an attorney draw it up for you if you are not sure about the process. It doesn't matter whether they are currently producing or not. The new owner will however want to notify the company once the transfer is complete (i.e. once they own the minerals) in order to get paid on their half.

The Mineral Hub
Division Order without a Current Lease Asked 05/24/2014
Q: I inherited mineral rights and recently received a Division Order from an oil company with whom I do not have a lease. When I called the oil company, I was told that this order falls under an old lease signed by my deceased mother in the 1980\'s. Given she is deceased, wouldn\'t the old lease be null and void? I handled her estate and she had not received any royalties from this company in the last several years.
A: The lease lives on for as long as there is production from the leased premises, even as the ownership may change.When your mother passed, the lease, assuming it was still in force when she passed, transferred to the new owner. The new owner would need to notify the operator in order to make them aware of the change if they are not already aware, which it sounds as if they were by what you stated.

Frederick M. Scott
The Mineral Hub
Lease offer in Wyoming received. Asked 05/24/2014
Q: My wife\'s family was contacted to sign a lease for mineral rights. They inherited 640 acres in Wyoming, yet the leasing company only wanted to sign for 64. Is that big of a disparity usual? Also, they are offering $50 per acre which appears low compared to neighboring counties that we have looked at. Are we correct in assuming that?\n\nFinally, who would you suggest we have look at the contract that was sent to us?\n\nScott
A: It's not uncommon for companies to lease less than is actually owned by a mineral owner, especially in cases where some of the mineral rights fall outside of the company's proposed drilling and spacing unit. I would just make sure if you lease the 64 acres that the lease does not include the remaining acreage they say they don't want unless they plan to compensate you for that acreage as well.

Lease bonus prices can and do vary widely within a county, and can vary even more between counties so $50 may in fact be the going rate in your area currently. I would research the immediate area (i.e. neighboring sections of land) to see what is being paid there and use that for comparison rather than a county-wide or multi-county area.

If the cost is justified I would suggest finding an oil and gas attorney in the area where the mineral rigths are located to look over your lease. He/she may also have a better idea of what the going bonus rate is in your immediate area and could also perhaps help you negotiate some additional clauses that would be in your favor.

Frederick M. Scott
The Mineral Hub
Carter County lease expiring soon. Any activity nearby? Asked 05/21/2014
Q: I have mineral rights in the above named section which had a 3 year lease on them with it ending next Month. I was wondering if you knew of any anticipated production in the area? Thank you in advance for your comments!
A: No drilling permits yet for this section or the surrounding sections, though I did find some fairly recent leasing activity in your section, indicating that they may want to renew your current lease as well when it expires (though apparently the current lease is not under your name as I couldn't find it.)

More leasing also means it's more likely they will be drilling this section over the next few years. The more leases renewed as they expire in this section, the more likely a well will be drilled eventually.

The Oklahoma Corporation Commission (the regulatory body for oil and gas in Oklahoma) has a wealth of information available online relating to oil and gas activity and production in Oklahoma. You can look up such things as drilling permits, recent production information, well completion reports, forced-pooling orders, and anything else that falls under their jurisdiction.

Do I own the mineral rights under my land? Asked 05/20/2014
Q: I recently bought some land that has never been developed, and was wondering about mineral rights\nhow do I know if I should inquire about owing the mineral rights on my land?
A: Check out my article on the Mineral Hub News entitled How Can I Locate Who Owns the Mineral Rights Under My Land?. Should get you started on the right foot in finding out whether you own them should you choose to research this. I would always want to know whether I owned the mineral rights under my land.

Hope this helps.
Frederick M. Scott
Family mineral rights trust Asked 05/20/2014
Q: My father in law passed away his grandparents had est a trust for the mineral rights. Who do the rights go to after his death my husband or his mother
A: Likely they will go to the trust beneficiaries, or according to his will if applicable. To vest title legally it will likely be necessary to have his estate probated in court and have a judge determine who gets what.

The Mineral Hub
Working interest owner charges Asked 05/12/2014
Q: We are working interest owners and receive letters from the operator asking for approval for certain charges. What rights do working interest owners have regarding these charges? Some charges are clearly valid, but we were charged several hundred dollars for mohagany doors at a field office...clearly not ok. What options are there to address this? What happens if we do not sign their requests for work approval?
A: Mahogany doors for their office? Wow, that doesn't sound like a WI owner's cost to me frankly. What's next, dancing bears to keep the office personal entertained on slow days?

If you were provided a JOA it should state in that document what costs are and are not chargeable to the WI owners. Often times the operator will not even provide a JOA to the "small fry" WI owners however so if you are one of them you may just have to contact the operator and ask them to explain why they think billing you for the "mahogany doors" is reasonable.

As to what "rights" have, it's spelled out in the JOA, which you should try to obtain a copy of since you are bound by it.

The Mineral Hub
How to get copy of old oil and gas lease? Asked 05/08/2014
Q: How would we be able to find old oil and gas lease and also how would we find leases for surface rights where the well sits. We have a bad copy of a lease that dates back to the 1950s and receive almost nothing in surface rent. The oil company has 10 acres with other equipment for collection from other wells in the area but we are unsure of any lease and they have not paid us anything for surface rent. Someone told us to get a title run but title company didn\'t think that would find any information.
A: All oil and gas leases are eventually filed of record with the county clerk's office in the county where the leased mineral rights are located. You'd need the legal description or the lessor's name in order to do a proper search. Many county clerks now make their records available online, but not many go back to the 1950's yet so you may have to visit in person or have someone do it for you.

The Mineral Hub
New lease for new owners needed? Asked 05/05/2014
Q: We purchased mineral interest in 14 different tracts of land, which they all have been previously leased with antero and several different companies. Will we need to sign a new lease, since we are the new owners of the mineral interest tracts? Thank you in advance for any and all info that you can pass along to us. Have a great day!! 🙂
A: You will not need to sign a new lease as long as the current leases are in force since they will simply transfer to you. In the event any of the leases are producing income currently you'd want to notify the companies involved however so they can begin paying you instead of the previous owner. They will have no way of knowing the interest has changed hands unless someone tells them.

Frederick M. "Mick" Scott
The Mineral Hub
Spouse and children transfer or inheritance Asked 05/02/2014
Q: I am a resident of South Carolina. I have inherited from my father a partial interest of mineral rights in Mississippi. Does a standard SC will without mention of mineral rights protect my spouse and children or must I file a will in Mississippi to insure this?
A: You should probably have the estate of your father probated in Mississippi in order to ensure his heirs have marketable title to the minerals. It's possible an oil company or future buyer of these rights would accept a copy of the probate filed in SC (assuming his estate was probated in court there) but would be best to have an "ancillary probate" done in Mississippi as well.

Probating an estate involves having a court look at the decedent's will etc. to determine who the heirs are and then signing off on it by providing a "Final Decree" that is filed of record. Probably cost of between $2000 and $3000 depending on complexity of estate. If no will, then the estate should still be probated, as laws of "intestate succession" would govern who gets what in that case.
Plug and abandon timeframe Asked 04/28/2014
Q: A giant oil and gas company just told us they are sending us a shut-in letter, and said they \"plan to plug and abandon\" our \nPecos County gas well. How long does that process take, and is there paperwork we need to get signed, etc.? They\'ve had it for 30 years, but today, I think they need much larger acreage than our 400 acre mineral rights lease. Thanks...great site !
A: They will have to file with the OCC in order to plug the well, and it could take up to a year after they apply. No real "standard" time frame actually, but often within a year or less after the permit to plug is approved.

The Oklahoma Corporation Commission is the oil and gas regulatory body for the state of Oklahoma, and on their website you can find a wealth of information about what's going on in the area where your mineral rights are located. You can search for production, completion reports, pooling orders and applications, and other things that the Commission regulates. You can search their oil and gas database from THIS page.
Probate required to claim inherited mineral rights? Asked 04/26/2014
Q: Do I need to probare decendants estate in order to clan my heirship royalty payments in the state of ND. We are WI residents.
A: Yes, you will eventually need to probate in order to have "marketable title" to the mineral rights you inherited. However, in many cases a company will be willing to lease the rights from you prior to probate being done; however if a producing well is drilled as a result of the lease they may require you to probate the decedent's estate prior to paying you an royalty.

Hope this helps you out.
Frederick M. Scott
The Mineral Hub
Fractional conveyance question? Asked 04/19/2014
Q: I own a 1/4 percent interest in some mineral rights with another person. At the time of conveyance we were both single. I am preparing a new mineral deed to convey from myself to myself and new wife as Joint Tenants. Do I just convey an 1/8 percent on the new mineral deed, as the other person still owns the other 1/8?
A: You could simply convey "all my interest" from yourself to yourself and new wife. No need to mess with the fractions unless you want to. I would suggest having an attorney draft the deed if you are not comfortable doing it. He/she would also make sure it was filed correctly with the county clerk.

Mineral Hub
Sharing ownership of mineral rights with my husband Asked 04/09/2014
Q: I have mineral rights in three counties in Texas. I would like to have my husband share ownership with me so that he can inherit them. How do I go about making this change?
A: You can (or your attorney can) prepare a deed granting your husband a shared ownership in the mineral rights. You'd want to then sign it in front of a notary and file it of record in the county clerk's office where the mineral rights are located. The deed would convey your mineral rights from you to you and your husband in equal shares.

Mineral Hub
Company doesn't have original of my oil and gas lease... Asked 04/07/2014
Q: Two years ago I signed a two year gas lease. Right before my two years ended I resigned for one more year with them. Today they called me and said they don\'t have my notarized original lease. They want me to send them my original signed and notarized lease. I don\'t want to not give this to them. Don\'t I need an original or is a copy ok for me to have?
A: They need the original in order to file it of record. Can't imagine why they didn't have you send it to them two years ago when they originally leased this. A copy is fine for you to keep for your records, and you can always obtain a copy of the document from the county clerk's office once it's filed of record.

I'd make sure you arrange for payment before sending them the original lease, assuming you haven't already been paid the lease bonus, and you agreed to a lease bonus. Royalty payments will come later if a successful well is drilled so you won't get royalty payments up front of course.

Mineral Hub
Can mining company put a mine shaft on my property? Asked 04/06/2014
Q: can a mining company with mineral rights come on your property and put a mine shaft on it? If so do they have to compensate you some how? Can the mining company go across private property that they DO NOT own the mineral rights on to get to the property that they do own the mineral rights to?
A: Not sure about that one, as we deal mostly in sub-surface mineral rights. A mine shaft would likely be part of the surface estate even though the "hard minerals" they'd be after by drilling a mine shaft are obviously underground. I would check with an attorney familiar with this type of mining.

Mineral Hub
Activity near Colbert, OK? Asked 04/04/2014
Q: any drilling or leasing activity around Colbert Ok in Bryan county ?
A: The Oklahoma Corporation Commission (the regulatory body for oil and gas in Oklahoma) has a wealth of information available online relating to oil and gas activity and production in Oklahoma. You can look up such things as drilling permits, recent production information, well completion reports, forced-pooling orders, and anything else that falls under their jurisdiction.

Mineral Hub
Liability Issues with Purchasing Mineral Rights Asked 03/27/2014
Q: I am thinking of purchasing some mineral rights in colorado. Are their any liability issues that i need to first consider?
A: Technically, under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) you could be help liable for toxic spills, well plugging, site cleanup etc. if the government couldn't find anyone else with the money to do it, but in reality it's very rare that the government would go after the mineral owner. They usually go after the operator for such things, but then again if the operator went broke or something they could, and perhaps would, come after anyone else related to the property they though had the money to clean up the mess. Bottom line is they'll "go where the money is" if needed to get the job done.
Ok to show lease to prospective buyer of my mineral rights? Asked 03/26/2014
Q: I am looking to sell my royalties. I have had a few quotes from companies and I have one company that wants to see a copy of the original lease before making an offer. Is this safe? I figure that the lease is available from public records and so it should be okay to email them a copy. Any advice appreciated.\nThanks
A: Yes, that's a normal request, and yes, it's available to the public anyway so they could get it themselves if they really wanted to. Since you are looking to sell your mineral rights it seems, why not list them for sale on the Mineral Hub? What kind of offers have you received? Where are the mineral rights located? (Legal description?) Are they producing currently. We'd be happy to help find a buyer for you! Our buyers regularly beat unsolicited offers made by others.

Frederick M. "Mick" Scott
Manager
The Mineral Hub
Can oil company drill if new subdivision goes in? Asked 03/25/2014
Q: I\'M SELLING A TWENTY ACRE PIECE OF PROPERTY, WHERE OWNER ARE KEEPING THE MINERALS RIGHTS. THEY HAVE TWO CAPPED WELLS ON PROPERTY THAT HAVE BEEN CAPPED FOR TWENTY YEARS. ALL LEASES HAVE EXPIRED, WITH NO ACTIVITY SINCE CAPPING. IF PROPERTY WERE TO GET DEVELOPED INTO A SUBDIVISION, OR, WITH THREE OR FOUR HOMES ON, AND MINERALS OWNER WANT TO PURSUE LEASING, HOW DOES IT AFFECT THEIR ABILITY TO DO SO?
A: These days, they would likely be able to drill "under" the houses (i.e. horizontal drilling) from a distance, so probably wouldn't be too obtrusive. Spacing units are often larger than "just a few houses" as well, and so likely they could drill somewhere else within the same spacing unit and still reach any oil or gas under the houses.

The Mineral Hub
Can they drill anywhere on my land? Asked 03/24/2014
Q: what are my rights when buying property that someone else owns the mineral rights on? Are they able to drill anywhere on my property with out notifing me, or are they confined to the area they\'re already drilling in?
A: The holder of the right to drill can technically drill any "reasonable" location within their approved drilling and spacing unit. Since the mineral estate is the "dominant" estate, you really can't keep someone from drilling if they have permission from the mineral owners and your land is within a drilling and spacing unit (spacing) that they have applied for and received approval from the state on to drill.

They will usually stay at least 200 feet from any inhabited structures however, and it is in their best interest to not disturb the landowner any more than needed. Lots of times it's possible to negotiate before drilling to cover such things as damages to crops, timber, fences etc. Check with your family attorney for items you might want to consider.

The Mineral Hub
Unleased mineral owner? Asked 03/19/2014
Q: I only own 8 acres and did not lease my land, horizontal well drilled and production began 3 months ago. will it be months or years before my first check should arrive; northeast Louisiana, Lincoln parish (county)
A: Are you sure the 8 acres was included in the drilling and spacing unit for the well? Could be you are outside of the unit, which would explain them not contacting you for a lease.

Once a well is completed, most states allow six months after first sales before they have to begin paying the royalties. After that, interest is usually due on late payments.

If you don't want to wait six months, you could contact them to see why you weren't leased. If you weren't leased, then perhaps you were "force-pooled" into their unit...and they would have a record of that too. If force-pooled, you will get paid, but at terms dictated by the State that were hashed out at the pooling hearing. Probably fair terms, but better to lease usually if you can than be force-pooled later.

If they didn't force-pool you, didn't offer to lease you, then I'd go see an oil and gas attorney about it if you in fact do own any mineral rights within this unit, because the company would then be "trespassing" on your mineral rights. Not good (for them.)

Hope this helps.
Frederick M. "Mick" Scott
The Mineral Hub
My deed says I own 80 acres, but oil company says it's less? Asked 03/18/2014
Q: \nDear Mr. Scott,\n\nThrough inheritance I own a mineral deed in Pottawatomie County OK. It is for 80 acres in the N/2 of the SW/4 in township 6 North, Range 4 East of Section 1. \n\nI recently received a lease offer from SPS Exploration which states that the offer is for those 80 acres but in a follow-up letter from them answering a question of mine they say that I only have 1/2 acre (the other 1/2 acre having been sold by mother years ago). \n\nWhy the discrepancy between what my deed states and their offer for 1/2 acre? \n\nThey are offering a bonus of $100/acre so there would be quite a substantial difference in the bonus payment on 80 acres versus 1/2 acre.\n\nmany thanks
A: They are probably correct. Many deeds (and leases for that matter) will describe the TRACT of land in which you own, but not the net acres WITHIN that tract that you actually DO own. This is especially true for oil and gas leases, which ALWAYS state only the GROSS acreage in the tract being leased, rather than what everyone WITHIN that tract owns individually.

Take another look at your "deed." I'll be if you read it carefully it will state a fractional interest in those 80 acres, rather than the entire 80. If it simply states "all" interest in 80 acres, then it's likely that all her interest consisted of LESS than 80 acres, but was within that 80-acre TRACT.

If it turns out you only own 1/2 acre I'd just tell them that you'll lease to them for no bonus and a 1/4 royalty rather than a smaller royalty and a bonus. $100 is not much bonus money. I'd rather have the potential to make more than that in the long run (with a 1/4 vs. a 3/16 royalty) if a well is ever drilled. I'd also make sure they primary term of the lease is for no more than three years; which is plenty of time for them to drill a well if they want to. Longer than that and they are just tying up your mineral rights for no good reason.

Hope this helps.
Frederick M. "Mick" Scott
The Mineral Hub
Leasing activity in Roger Mills County, OK Asked 03/17/2014
Q: Hi, my relatives and I have about 5 acres of mineral rights in Roger Mills, OK section 34, 14N 26W. We have been approached by a landman regarding a potential lease. I believe he may be from Arrowhead. I can\'t find any information regarding lease or drilling activity in this section, other than a couple of shut-in wells that we have. We also have about 14 acres in section 36-12-16 that may be able to be leased soon. Do you have any idea of a fair lease for these minerals and whether we could be force pooled? Thanks!
A: Anywhere from $500/acre to $1200/acre is probably the going rate in this township. Not much leasing going on currently so you may have trouble at the higher end of that due to lack of competition.

If you decide to sell them however, please let me know, or just list them on the Mineral Hub website. I've got people clamoring for mineral rights in this part of the county currently.

Hope this helps.
Frederick M. "Mick" Scott
The Mineral Hub
If my siblings sell, do I have to sell too? Asked 03/17/2014
Q: I have inherited 1/4 of 100 acres of minerals in Oklahoma along with my three brothers. If they want to sell theirs, do I have to sell mine? Thanks
A: Nope. You can keep your share and they can sell their shares if they wish. You wouldn't even have to be involved if you didn't want to be.

Hope this helps.
Frederick M. "Mick" Scott
The Mineral Hub
Best method to convey mineral rights? Asked 03/14/2014
Q: I would like to convey the minerals on my farm in louisiana. What is the best method i. e. legal instrument by which to transfer, convey, sell and or assign these mineral interest.??\nI own 100 % of the minerals on the land with no producing oil or gas. I have owned the property for approximately 17 years.\n\nWhat is the best method without \"clouding\" the mineral title?
A: You could convey the mineral rights via a "mineral deed." Get an attorney to draw it up for you if you aren't sure how it's done. Whoever bought them (or whomever you transferred them to) would want to be certain you owned them of course, and thus might want you to "warrant" the title, and if they weren't familiar with your ownership history, would likely want to check the records at the county clerk's office as well to verify your ownership prior to closing.

Hope this helps.
Frederick M. "Mick" Scott
The Mineral Hub
Do I need to probate decedent's estate in order to have lega Asked 03/12/2014
Q: How do I transfer a deceased person\'s mineral rights to their sole surviving heir with being able to avoid probate. Could we just file an Affidavit of Heirship and a Deed in San Juan County, New Mexico?
A: You could file an affidavit (though you couldn't file a deed on behalf of a deceased person) and you could probably get them leased in your own name that way, but if you ever went to sell them, or if a well were ever drilled, then you'd probably be required to have the probate done before you could be paid.

If there is already a well there then you might be able to convince the oil company to begin paying you instead, without a probate, but it would be up to them really. They need to be satisfied that you own them and legally inherited them as sole heir, and most people prefer to see something from a court stating who owns what. In your case, that would likely mean a probate.

Hope this helps.
Frederick M. "Mick" Scott
The Mineral Hub
Difference between a RI and an NPRI Asked 03/11/2014
Q: I currently own RI\'s however recently have been approached to invest in some NPRI\'s and was wondering what the major differences were and if I would be worse off owning these Non-Participating Royalty Interests as opposed to traditional Royalty Interests. Thanks in advance for your help.
A: Please visit THIS link for your answer:

The Mineral Hub
Love County, OK Activity? Asked 03/05/2014
Q: I have oil&gas rights on 6.6 acres in Love county Oklahoma.\nsec. 30 t6s r3e willow flats Lake Murray. Previously leased to Chesapeake operating . Are there any wells in the area, and what is the value if I want to sell?
A: The Oklahoma Corporation Commission (the regulatory body for oil and gas in Oklahoma) has a wealth of information available online relating to oil and gas activity and production in Oklahoma. You can look up such things as drilling permits, recent production information, well completion reports, forced-pooling orders, and anything else that falls under their jurisdiction.

I took a quick look and there are currently no wells planned in this area, nor is there any current leasing activity. There are two small wells producing in the section currently actually, but they don't include the whole section so you may not be "in" them. If you were you'd likely be getting royalty checks occasionally.

My guess is that they're probably worth between $400 and $500 per acre currently if you wanted to sell them.

Frederick M. Scott
Mineral Hub

How do I find production info for Texas online? Asked 03/02/2014
Q: my family has a lease in pecos county, tx. i would like to find out if they are drilling in that area and if so, how much are the surrounding wells producing. where should i look to see about activity in our area?
A: The Texas Railroad Commission (the regulatory body for oil and gas in Texas) has a wealth of well information available online concerning oil and gas activity. You can look up such things as drilling permits, production information and completion reports.
OGL assigned to another company? Asked 02/28/2014
Q: If you have a oil and gas lease on your land what normally happens when the lease company sells it to another company. Should I be notified and furnished a new lease. There are 4 people which own the mineral rights with equal shares.
A: Unless you included a clause in your lease stating that you are to be notified of any sales or assignments of your lease to another company, then there is no obligation for them to notify you if in fact they do assign it to someone else. Lease assignments are fairly common, and most people don't include a "notification" clause in their lease.

Even if you had been notified, you would not have been able to renegotiate new terms on a current lease with the new lessee since the lease terms you agreed to with the original lessee were also included in the assignment to the new lessee. This is why it's important to make sure any lease you sign is a good one from the get-go.

Frederick M. "Mick" Scott CMM, RPL
Manager at The Mineral Hub
Can we renegotiate OGL assigned to another company? Asked 02/28/2014
Q: The lessee sold our mineral rights lease to another oil company without our knowledge. Do we have any rights to have the terms of the lease updated with the new company?
A: Nope. The rights to your current lease transferred to the new company, including all the terms within. Non-negotiable. If you'll look in your lease it likely stated that your original lessee could assign the lease to someone else if they desired.

The Mineral Hub
How to figure net acres paid based on check stub decimal? Asked 02/23/2014
Q: If I receive a check stub with decimal total in well, for example .00878906, and I know I signed a 3/16 royalty lease in a 640 acres unit, how to I back in to the number of acres I\'m being credited with?
A: Easy! .00878906 times 640 divided by .1875 = 30 acres.

To "check" this, you can divide your known acreage (assuming you know it's 30) into 640 and then multiply that result by the royalty (.1875) to get your decimal interest.

Hope this helps you out.

Frederick M. "Mick" Scott
Manager at The Mineral Hub
Seminole County, OK Leasing Bonus Asked 02/21/2014
Q: do you know what SilverCreek oil and gas is paying for a lease in Seminole,Co. 7/6 sec 21,, 28, 29, I was offered 250 3/16 for 3 yrs. Thanks so much. You have really helped me in the past.\n\n\n
A: I can't tell you what they are paying now unfortunately, but I'd wager it's going to be less than they were paying in 2008, and as you mentioned in another question, it seems you got about double your current offer back in 2008 so the $250 makes sense. I'd say it's not too far off, and may be the going rate frankly, especially if no one else is leasing the immediate area right now. Silver Creek is the only company filing leases in these sections currently that I can see, so unfortunately there's not a lot of competition for your lease currently.

Frederick M. "Mick" Scott
Manager at The Mineral Hub
Forced-pooling order options? Asked 02/16/2014
Q: If an applicant receives a forced pooling order from the OCC, does that mean that mineral owners within the designated unit can only try to negotiate a lease with that successful applicant? Does the Order essentially give that applicant sole right to be Lessee in that unit?
A: If you are listed as a respondent on a forced-pooling order, you usually have about fifteen days after the order has been issued to make an election under the pooling. Several bonus and royalty election options are usually offered, as well as the option to participate in the well by paying your share of the drilling and completion costs.

You can also contact other companies during this time and see if they would like to lease you, and then notify the applicant within that time if you lease with someone else (they should then "dismiss" you from the pooling,) or you can of course ask the applicant for a lease instead of being pooled. Sometimes other companies also leasing in the area may be eager to lease you if you have been included in a forced-pooling order. This is because they can then "participate" in the well as a working-interest owner and thus gain knowledge about the formations etc.

If you do nothing during the fifteen days (or whatever limit is stated in the Order) have passed, then you will be forced-pooled at the default option (usually the highest cash and lowest royalty option) unless you have made an election on your own or gotten a lease with someone by then.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Deed error by closing attorney omitted mineral rights. Asked 02/13/2014
Q: Are there any Pennsylvania court cases involving deed mistakes made by attorneys with their omitting the transfer of mineral rights to the buyer?\n\nIf this information is unavailable, can you tell me how I can further research it on my own?\n\nThank you.
A: Your best bet would be to file a "correction deed" to fix the attorney's mistake if there was one. I'm not aware of any cases relating to that but perhaps PA has a webpage where you can search court cases relating to such issues.

Frederick M. "Mick" Scott CMM, RPL
Paid up lease include "delay rentals"? Asked 02/11/2014
Q: On a 3 year term Paid-Up Lease, are all the annual\ndelayed rentals paid up front or just the first year?
A: Rentals on a paid up lease would be paid "up front", along with any bonus. For example a three-year paid up lease with a bonus of $300/acre might actually be a check for $303, which would include the delay rentals of $1 per year.

Frederick M. "Mick" Scott CMM, RPL
Obtaining a copy of an old division order... Asked 02/10/2014
Q: Is it possible to obtain a copy of an old division order (approx. 1980) for a currently producing well (serial #172802) located in LCV RA SUO T19N, R4W in Lincoln Parrish, LA?
A: Since DO's are not filed of record, you'd need to contact the company that issued the DO in order to obtain a copy.

Frederick M. "Mick" Scott CMM, RPL
ORRI worth it? Asked 02/09/2014
Q: Hi and thank you! for this forum. I read a comment you posted..............\"That said, most assignments of overriding royalty interest never amount to much money anyway so I would keep that in mind before you go spending a lot of effort tracking this down. \"\n\nMy question is........ what is it that makes an ORRI \"not amount to much money\"? Percentage interest (be it 5% or 55% ORRI) aside, where is the break down in what makes the ORRI not have much value? I was under the interpretation the the ORRI was paid before the WI owner/s got anything, and unless there was some other payment superseding it (not including the underlying O&G Lease royalty) i would assume there would be a substantial sum from which to make good on the ORRI.
A: ORRI's are not as valuable as outright ownership of mineral rights, this is because they are carved out of the lessee's share of production, and once the lease ends, so does the lessee's share, and thus so does any ORRI carved out of it. Since its term is limited to the life of the lease, its not worth as much as outright ownership of mineral rights in the same lease.

The ORRI is also usually a fairly small share of the total production, and thus my comment about most not being worth much. That said, there ARE of course "valuable" ORRI's, but unless the lease has a really good well or wells on it (or the ORRI is an interest in a LOT of wells) the income from an ORRI won't usually amount to much. Companies often carve out ORRI's and give them to landmen or geologists for their help in getting a well drilled.

You are correct that an ORRI is "cost-free" but so is the mineral owner's royalty interest, or a NPRI (non-participating royalty interest...carved from the LESSOR's share of production.)

I'd rather be the mineral owner and have a lease that pays me a royalty rather than receiving an ORRI from the lessee/oil company because as a mineral owner my ownership would continue after the lease dried up, whereas the ORRI would terminate at that point. The mineral owner could lease the mineral rights again later, the ORRI could not since he/she didn't actually own anything but a share of the lessee's production from the current lease.

ORRI's are also harder to sell for the reasons given above, and won't sell for as much as minerals in the same lease would sell for.

Frederick M. "Mick" Scott CMM, RPL

Tracking production - Colorado Asked 02/04/2014
Q: I\'m a relatively new mineral owner in Weld County, CO. The company working the wells I have a part ownership in did not send a royalty payment this month, although I believe there was constant extraction in 22 wells during this pay period. Normally, I do not question the company - I thankfully cash the checks. I know there is a way to track them, and feel I should learn how to track what they pull out. Can anyone help?
A: You can go to the Colorado Oil and Gas Conservation Commission's website and do a production search to determine what a well is doing. The home page is HERE and from there you'd click on "DATABASE" on the left side of the page, then on "Production" on the following page. Enter your search criteria there (i.e. a county, and a section, township, range etc.)

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL


Proving I'm an heir (in Oklahoma) to the oil company? Asked 01/30/2014
Q: I\'ve got an oil company telling me that since our parents died out-of-state they won\'t be able to pay us royalties that have accrued on their wells in Oklahoma since their death (that are currently held in a suspense account) until we have their estates probated in Oklahoma. This is even though they had a living trust (not an Oklahoma trust) with all the heirs listed. Can a company do that?
A: It's up to the oil company as to what they'll accept in order to pay you, but in Oklahoma many (and apparently this one) will require you to probate a decadent's estate IN Oklahoma before they'll "agree" that you actually inherited anything and release the suspended funds. A trust helps, as it's supposed to "avoid" probate in many cases, but a lot of the time oil companies (and also mineral rights buyers if you're selling) will still require the decedent's estate be probated (in Oklahoma) before they'll pay. They figure if a judge agrees with you (i.e. by signing a "Final Decree" or Order Determining Heirs" etc.) at the completion of the probate process, then that's good enough for them to begin paying you as an heir.

That said, on properties that aren't producing much income, sometimes the oil company (or someone buying your mineral rights) will be okay with just an affidavit as you suggested. Apparently not this company though. If you do nothing, they'll eventually turn the suspended funds over to the Oklahoma Secretary of State's office, where they'll sit until you prove to THEM you're the rightful heir. THEY may also require a probate be done in order to claim the money.

In some cases a "Quiet Title Suit" can also be done in lieu of an actual (ancillary) probate. Even a QT Suit is a court proceeding though, and thus also involves a judge signing off on (or "validating") a will or other heirship document such as a trust.

The only way you might get away without probating an estate is if you are a surviving "joint tenant" of a mineral interest. Once one joint tenant dies, usually all that's required to satisfy an oil company is an affidavit signed by the surviving joint tenant stating that their co-tenant has died. Often a death certificate of said co-tenant will be attached to the affidavit. This wouldn't be applicable in your situation however, since you are an heir, rather than a surviving joint tenant.

You can probably get an "ancillary" probate done in Oklahoma for between $2000 and $3000 assuming the estate being probated is not very complicated. Same with a QT Suit. I'd just make sure any attorney you use is familiar with oil and gas rights at least a little. Any 'family attorney" can do an ancillary probate, but better to find one with some oil and gas experience if you can.

Finally, you'll want to ascertain whether the property is even worth probating. If the royalty income that is being held or will be held in the future is not worth the cost of the probate then may be best just to leave it undone for now. You can always do it later, and in Oklahoma I believe that after ten years the affidavit method you suggested would suffice legally as long as no one contests it during that time. In other words, if you just filed an affidavit and perhaps added the trust as an addendum to it, rather than bothering with a probate or quiet title suit, then in 10 years you'd have "good title" and wouldn't need to do either because under Oklahoma law after ten years an affidavit will suffice to convey property that is inherited. Check with an attorney on this to be sure but I think that's the case.

If you don't want to wait ten years, then best to determine whether this interest is worth enough to cover the probate or quiet title costs necessary to free the income from suspense.
Primary term about to expire on pooled lease... Asked 01/29/2014
Q: Our primary term is about to end on some minerals we have leased. We are currently receiving a small royalty from a pooled unit. No production is on the land with our minerals but they were pooled. Do we have to stay with this leasing company for a secondary term? Can we negotiate for a different leasing amount or are we stuck with what they gave for the primary leasing period? Thanks for any information you can give!!
A: If all tracts you own in were included in the pooled unit, then I think you're stuck for the secondary term as well unless your lease specified they had to ask before pooling you and neglected to or something. Once a lease enters the secondary term there are no additional bonuses paid, so to negotiate for a new bonus (or royalty) would be a mute point.

If you feel the pooling was a "sham" just to enable them to avoid leasing you again you could take it before a judge to contest it. That's an option, especially if the rest of your land proves more productive than the lands it was pooled with. Talk to an oil and gas attorney about your options there.

The Mineral Hub
Free Ride Well Question Asked 01/16/2014
Q: Hi, I was reading on your All Experts comment that if an oil company does not pool and drills a well, then an unleased mineral owner can get a free ride to the well. Wondering how to exercise this option. The well has been drilled, but is not completed yet. Thanks!
A: Wait until the well is completed, see if it's a "good" well, and then check to make sure you weren't force-pooled as an unleased mineral owner (in states such as Oklahoma that have forced-pooling.) If the company didn't lease OR force-pool you then yes, I believe you'd be in the "driver's seat" somewhat. If you get too pushy about it though they will just file an amended pooling and include you in THAT one.

If the well is a good one, and you own more than a few acres, I'd really consider getting an OIL AND GAS attorney involved before calling the company, to make sure you are well-represented. Get one that charges by the hour though, not by royalty or override etc.

If you don't want to involve an attorney, just remind the oil company nicely (after the well comes in) that they may have forgotten to lease or pool you, and see what they offer. It may be that they DID pool you and you just weren't aware of it, but if they didn't, and didn't lease you either, then you can likely negotiate yourself a pretty sweet deal of a lease (i.e. 25% royalty and double the highest bonus they paid anyone else.)

Again though, if it's a good well and you own more than a few acres, get an oil and gas attorney to help you. You don't want them to "carry you until payout" and "convert you to a WI" or something. If you don't know what that means, that's another good reason to speak with an oil and gas attorney about this before calling them.

Mick at the Mineral Hub
Help finding an honest person to represent us in leasing? Asked 01/01/2014
Q: My family has multiple tracts of land in Nacogdoches county Texas. Some are over a 100 acres in size and some are small. Multiple leases are in place and several offers are available. How would we find an honest person to represent us on the leasing process?
A: Negotiating a lease is not "rocket science" and for that reason I would suggest that you attempt it yourself (after doing a little research) before hiring someone that may charge a hefty fee to "negotiate" for you.

Our Oil and Gas Leasing Tips article is a good place to start your research. Reading it will give you a much better understanding of the leasing process in general, and will give you a better feel of whether you really need/want someone to help you negotiate a lease. You may discover that you don't need as much help as you think.

If however you don't have the time or inclination to negotiate the lease yourself, then it might be worth hiring a professional represent you. As for finding an "honest" one, I would say an attorney or landman who is familiar with oil and gas in Nacogdoches County that’s willing to provide you with references from previous clients he or she has negotiated leases for would be your best bet.

Some attorneys will negotiate leases on your behalf and charge you their regular hourly fee, while others, and most “landmen”, will ask for a percentage of the bonus amount as payment. Some will ask for both (which I wouldn’t agree to) and the hourly rate is usually preferable assuming the person doesn’t abuse it by charging you for an unreasonable amount of hours. Hard to define “unreasonable” but in most cases an attorney who does a lot of lease negotiations will bill you for between 2-5 hours to negotiate a lease, and they likely have a “form” in place already that is acceptable to most oil companies, while also being fair to their client (you.)

In lieu of an hourly charge, there are people who will instead work for a percentage of the bonus you are paid (which they will collect from you once you are paid, assuming you were offered a bonus.) Some "percentage" deals can run in to many thousands of dollars, while in some cases most if not all of the "negotiating" they did could have been done just as effectively by you. Any individual who works for a percentage of the bonus should be able to do things for you that you couldn't hope to achieve yourself, the net effect being that even after paying them you are left with better terms then you could have negotiated on your own.

I would suggest you not agree to pay ANYONE more than 7.5% of the bonus though. I feel that's a reasonable amount for someone to ask IF they are really helping you negotiate a substantially better lease than you could on your own.

And yes, we do have some clients we negotiate leases for on a regular basis, but as I mentioned I think it would be worth looking into negotiating the lease yourself prior to hiring anyone to represent you, though if you do decide to go the professional route feel free to contact us again and we'll discuss your situation in more detail.

Hope this helps you out.

Frederick M. "Mick" Scott CMM RPL
www.mineralhub.com
The Mineral Hub
Who owns mineral rights to family homestead? Asked 01/01/2014
Q: The following property was homesteaded by my grandfather William Salo, SE of Hindsdale, Montana about 100 years ago. He sold some mineral rights in the 40\'s and the balance was divided between my father, George Salo and his sister Ina Salo Kuki. The property is currently owned by William (Bill) Kuki, Ina\'s son.\nLegal description:\nTownship 30 north, range 36 east. Section 24: s1/2nw1/4, sw1/4. Valley county. Also section 23: e1/2, se2/4nw1/4, ne1/4sw1/4. \n\nI was told you may be able to help in this search. \nThank you for your time.\n
A: Please check out this article from the Mineral Hub News page of our website for info on how to get started researching your ownership.

Thanks,
Found old mineral deed from grandfather... Asked 12/31/2013
Q: I was going though my late grandfathers stuff and found some what looks like deeds and mineral rights to some land in texas. I was wondering how I go about trying to find out more information about how to look into this more. I currently live in Ventura, CA if you have any people you could recommened here for me to talk to,
A: The Texas Railroad Commission (the regulatory body for oil and gas in Texas) has a wealth of well information available online concerning oil and gas activity. You can look up such things as drilling permits, production information and completion reports, which should give you a good idea of what's going on in the area where these mineral rights are located.

If you determine it's worth pursuing further, you can read our Mineral Hub News article on tracing mineral rights ownership to ensure he still owned these at his death.

Hope this helps!

Frederick M. Scott
The Mineral Hub
Current values of mineral rights under my land? Asked 12/30/2013
Q: How do I research the current value of mineral rights associated with real estate that I own?
A: Values can vary depending on many factors. Producing minerals are usually worth between 36 and 72 times the average of their monthly income over the past six months. This is only a rule-of-thumb however and the actual value will vary within this range and beyond depending on such things as the production history, the number of wells and their age, the proximity to other production, future drilling prospects, the operator, concentration risk, current governmental policy and taxation laws, and oil and gas prices.

Many of the criteria used to evaluate producing properties are also taken into consideration when evaluating non-producing or unleased mineral properties, though current lease bonus amounts in the immediate area are also considered, as well as whether the non-producing property is currently leased or has been leased much in the past. The more active the area, the more valuable the rights may be.

The oil and gas regulatory agencies in many states have websites available to the public that can help determine whether your property is located within an active oil and gas area of the state. If nothing is happening within 20 miles of your property (i.e. no drilling, no producing wells, no leasing of mineral rights etc.) then it's probably safe to say your rights are worth less than $200/acre. In active areas mineral rights can be worth as much as $5000/acre.

If your mineral rights are in an active area you'll want to make sure that your ownership of the mineral rights is of record in the county where the property is located, and that your name and/or contact info is reasonably available to anyone who might be searching for it. Oil companies will search the records of the county to determine ownership so they can contact owners when they wish to lease their mineral rights etc. If they can't find you, they can't contact you.

There really is no "cut and dried" approach to valuing mineral rights unfortunately. It's more a function of what the market will bear in a given area (i.e. what buyers are paying for similar properties nearby) that determines the worth of a mineral property.

You could research "comparable sales" yourself or hire a "landman" or someone else with EXPERTISE in the oil and gas field to value them for you if no comparable sales can be found. This however, is not the job for a real estate agent, attorney, or other professional UNLESS they have working knowledge of oil and gas acquisition and divestiture.

Much like I, as an oil and gas professional, wouldn't purport to be able to properly value a piece of land, it would be silly for an attorney or real estate agent with little or no experience in the oil business to claim they could accurately value a mineral property.

Hope this helps!

Frederick M. Scott
The Mineral Hub
Offer to Lease in NM? Asked 12/27/2013
Q: I just found out that I own some mineral rights in Lea county n.m. I have been contacted by a company that wants to lease our mineral rights. How do I know if this is a good deal or a scam? Don\'t they have to pay me for oil or gas taken from my area whether I sign a lease or not?
A: Offers to lease are usually not a scam. Usually it's good news so be happy, but cautious with companies or individuals you are not familiar with. It's better to lease if you can in most cases. If you don't, yes, you'll still be paid if your mineral rights are included in their drilling and spacing unit, but perhaps not paid on terms as good as you could have negotiated had you leased.

You might want to read our Oil and Gas Leasing Tips article that was published in the Mineral Hub News prior to agreeing to a lease with this company. Hopefully you'll find it helpful in your negotiations.
Royalty on gross vs. net proceeds? Asked 12/26/2013
Q: this may be a dumb question, but are the royalties more valuable it the % (i.e. 12.5%-20%) is based on gross rather than net?
A: Royalty on gross proceeds (i.e. proceeds before post-production costs such as gathering or dehydration costs are subtracted) will be more valuable than royalty on net proceeds (which are the proceeds left after such costs are deducted.)

Frederick M. Scott
The Mineral Hub
Can I cash bonus check if I don't own minerals? Asked 12/19/2013
Q: I bought land in Morris county Texas 10 years ago and recently was contacted by an oil company about leasing the mineral rights. I told her I don\'t think I own the mineral rights and asked her to send me the information she used to determine I own the rights. The title does not specifically state that mineral rights are included. If I accept the check, do I own the rights if no one contests the agreement with the oil company?
A: You can accept the check if they think you own them and want to pay you. They may ask for it back if they find out later that you don't however, so I'd (1) put the money in an interest-bearing savings account until ownership is determined for sure and (2) make sure you don't "warrant" your title in the lease. Just strike the warranty clause. Trust me, SOMEONE owns these, and even if they never find out who you won't ever "own" them unless you go to court and argue for it. Unlikely you'd win that one.

An oil company will usually do three ownership checks prior to making royalty payments on a producing well.

The first one is just a "cursory" check, and is the one they or a land company will do during the leasing process. It's usually not done by an attorney and sometimes companies get in a hurry with these and mistakes are made and they end up paying bonus money to people they shouldn't have. Might be the case here with you.

The second is the "drill site" opinion, which is more thorough, but still may have errors. Since they're not making royalty payments at this point it's not "that" important (though they do of course try to get it right.)

The third, and most thorough title check is called a "division order title opinion" or just "title opinion"; and that is usually done by an attorney prior to them making any royalty payments. If you get to the division order title opinion and they still show that you own at that point, then I'd say you most likely won't have any issues.

Since they haven't drilled a well yet, I'd suggest just doing what I said in points 1 and 2 above until you're sure you own them. You could have course research the ownership yourself in the county clerk's office just like they do if you like.

Hope this helps.

Frederick M. Scott
The Mineral Hub

What are my options when approached to lease? Asked 12/18/2013
Q: what are the options of mineralrights owners when receiving a request to lease their rights to a drilling company
A: The entirety of the oil and gas lease is negotiable, and the better you are at it, the better deal you will receive from the drilling company. I'd suggest reading our Oil and Gas Leasing Tips article for starters. That's a great place to start.

Hope this helps,

Mineral Hub
Shared Mineral Rights and Royalites Asked 12/17/2013
Q: Hello there, \n\nStumbled upon your site and I must say it is quite informational. I have just learned that I am one of many folks with mineral rights to a property that has been in the family since 1901. I have retrieved the deed from the Alabama Probate office and Affidavits which update the heirs. I\'m wondering how I can find out what mineral company is operating on the property? \n\n
A: Check with your state's oil and gas regulatory body to see who is operating the well. The agency likely has a website where you can do a search using the legal description. In lieu of that there are always the "pay sites" on the Internet where you can find that information. DrillingInfo.com is one such site I would recommend.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
www.mineralhub.com
The Mineral Hub

How do I Locate who Owns the Mineral Rights? Asked 12/15/2013
Q: My great grandfather had oil rights and how do I find out where to search ? My two aunts get them now but will not share info with us .
A: Please see our article entitled "How Can I Locate who Owns the Mineral Rights Under my Land?" under the Mineral Hub News link on the left. I think you'll find the answer there. If you have any other questions please contact us.

Mineral Hub Staff
Has old 1980 lease expired? Asked 12/13/2013
Q: In 2001, we purchased surface and mineral rights in Texas. There was a lease in force since the 80\'s concerning 2 gas wells that didn\'t produce at the time, we were told. Fast forward to this year and we found it has been producing for several. After contacting the O/G company, they forwarded us a Transfer Orderr that states, among other things, that we want to keep the current lease in force. Can we ask for a new lease/contract or are we bound by the previous one?
A: Any producing well or wells that were completed prior to the expiration of the primary term of the 1980 lease would hold that lease for as long as they were capable of producing in "paying quantities" (i.e. producing enough income for the operator to recover lifting costs)


If production from the leased premises dropped to a point where there was no well on the lease capable of producing in "paying quantities" (i.e. producing enough income to recover the lifting costs) then you'd have an argument that the lease had expired and thus a new lease would need to be negotiated prior to any additional wells being drilled.

I'd ask the company to show that there have been wells capable of producing in paying quantities on these premises since prior to the expiration of the primary term of the old 1980 lease. If there hasn't been, then you'd have a good argument that they need another lease if they are going to drill.
Release of non-producing acreage? Asked 12/05/2013
Q: In about three weeks my lease expires in Alfalfa County, Oklahoma(3-26-9). How do I go about leasing this again? Markers have been put down on 2 areas and a well is producing on one quarter. Will the company release the other quarters not containg wells that have not been started or do they have the right to continue the present lease? I cannot get in touch with the landman that I talked with on several occassions several months ago. Attempts go unanswered???
A: Sandridge completed the Rebecca 2609 3-H in this section back in February, so your lease will continue for as long as this well, or other subsequent wells drilled while the first one is still producing, continue to produce.

The spacing of the Rebecca well is 540 acres, and this includes most of the section even though the physical well is only on one quarter. If the spacing for the Rebecca well was only for one quarter section, then they'd release any acreage not in that quarter, but since this is a 540-acre spacing unit that is not the case since the lease covers the entire unit.

Frederick M. Scott
Manager
The Mineral Hub
Who is leasing mineral rights under my house? Asked 12/01/2013
Q: I sold my home in 2009, but retained the mineral rights, mainly due to an existing contract. I sold the home to friends, and recently found out another company offered them a contract.\n\nThe couple knew I kept something in the transaction, but couldn\'t remember if it was water or mineral rights. How do I find out who is soliciting contracts in the area? Since the homeowners are friends, I thought it best not to ask them.
A: The deed where you sold your home would tell you whether you retained any rights to the minerals for sure. A copy of the deed would be filed in the county clerk's office.

If anyone is buying oil and gas leases in the area those too would be filed in the county clerk's office. Many county clerk's post their land records online now so you might try there if you don't live nearby.

Frederick M. Scott
Who is responsible for lease extension bonus? Asked 11/22/2013
Q: If we signed an oil lease with a company and that company sold to an oil company, who is liable for the bonus money when they exercise the option to extend another 2 years. I am being told the oil company is, but my lease is with the first company and was never told about the oil company now having the lease.
A: The company who owns the lease when the original term expires would be responsible for the bonus payment if they choose to extend for another two years.

In other words, if the lease was assigned to a second company before the original primary term expired, then whoever the first company assigned it to would also have been assigned the option to extend the lease and would therefore be liable for paying an extension bonus if they (the second company) elected to exercise the option.
Claiming mineral ownership Asked 11/19/2013
Q: My sister and I own half the minerals under some land inherited from our father. Is it possible to claim the other half when no one has ever been located that owns them?
A: Probably not, unless the minerals are in North Dakota or Louisiana, and then you'd need to wait for a certain time period dictated by state law.
Top Leasing? Asked 11/15/2013
Q: Can a new mineral lease be negotiated \'legally\' before an old lease expires? ie, an older lease expires Nov. 15th 2013, and a company sent you a lease to sign on Oct. 1st 2013
A: It's called "top leasing" and in many instances you can negotiate a new lease and "top lease" before the current lease expires if your current lease allows for top leasing, but of course the new lease will not take effect until the old lease expires.

Frederick M. Scott
The Mineral Hub
Monies held in suspense Asked 11/12/2013
Q: I have an out of state company holding funds in suspense for me since 2001. I have lived at the same address for 52 years & have not been contacted by them once. \n\nMy question is can I legally demand the company pay interest on these funds & if so, how much interest?\n\nAny help you can give would be appreciated. Thank you...
A: I doubt any oil company would hold royalty or other funds that long. Usually they turn any funds like that over to the state after a few years because there may in fact be interest due on them as long as they hold them, assuming they are holding them for a principal owner rather than an heir who failed to notify them they were an heir.

You'd want to check your state's royalty payment laws to determine if interest payments are applicable here, and if so, then you may need to "remind" the company to include them once you are paid the principal they've been holding.

Keep in mind that if these funds were due to an inheritance then the company had no obligation to inform you, an heir, that they were holding these funds. It's up to the heirs to notify THEM actually.

Hope this helps you out.
Frederick M. Scott
The Mineral Hub
Claiming grandparents oil lease? Asked 11/08/2013
Q: what happens to grand parents oil lease since his death in 1992, and how can I claim them as my inheritance?
A: If the minerals are producing any income, the income would have been placed in a "suspense" account once the company determined he was no longer living, and if no one stepped forward to claim the funds within a few years they would turn the money over to the state to hold indefinitely. Heirs would need to prove they had a right to any funds being held.

You can only "claim" the mineral rights if they were left to you either by his will or by the state's intestate succession laws (which are applicable when no will is available.)

You'd want to check to see if his estate were probated by a court of law, and if so, what the "final decree" or "order determining heirship" states. If the estate was never probated and there was no will then intestate succession laws would apply; but it's possible that his estate would have to be probated anyway in order for any heirs (by will, or by intestate succession) to gain actual legal title to any mineral rights he may have owned at his death.

FYI, an old oil lease doesn't necessarily mean he still owned anything at his death. You'd need to check to be sure it wasn't sold prior to his death before going to too much trouble.

Frederick M. "Mick" Scott CMM RPL
The Mineral Hub



Mineral Rights Maps Asked 11/07/2013
Q: Please tell me where one may find mineral rights maps on Federally owned land- have looked all over internet and cannot find the right button. I applaud you for your website here. Thanks.
A: You might start here: http://www.blm.gov/wo/st/en/prog/energy.html
Should we sign letter from landman? Asked 10/27/2013
Q: Hi,\nMy family was recently contacted by a landman in Texas who stated that we are entitled to money from the mineral rights to a property in Texas. We knew nothing about these mineral rights, although my grandfather, who passed away in 1964, owned mineral rights in Oklahoma that we inherited.\nWe do not live in Texas and have no idea of how to proceed. This landman is going to send a letter for us to sign, but according to relatives who have received this letter, it does not state where the property is located or the name of the oil company. Could you advise as to how we should proceed? \n Thank you so much for providing this website for those of us who really don\'t have a lot of knowledge about the oil and gas business and have difficulty understanding all of it!\nMary
A: I would advise you seek the advice of a reputable OIL AND GAS attorney in Texas before signing anything. Since I haven't seen "the letter" I have no way of telling whether this "landman" is legit or is trying to rip you off. The "letter" could be a deed for all I know, which is something you wouldn't want to sign without knowing the value of what you are selling. The fact that the letter doesn't list the property would lead me to believe that this guy is planning on charging you some sort of "fee" for his "help" in locating the property and getting you your money.

An oil and gas attorney could certainly advise you though. Likely this "landman" has found some "missing money" for you and is "offering" to help, but may charge a hefty fee (or percentage) for "helping" you recover it.

Also, if it's money you're entitled to like he says, then you could simply go to www.missingmoney.com and put your name(s) in there and look for yourself. If the state has money for you that was turned over by some oil company who couldn't find you for whatever reason then you can get it from the Secretary of State's office in Texas (or the state's "unclaimed property division") by contacting them yourself as directed. You don't need some "landman" to do it for you.

Frederick M. Scott
Drilling activity in Bryan County, OK? Asked 10/25/2013
Q: We own mineral rites in Bryan County, OK, and wonder if there is any activity, eg. exploring/drilling, going on in that area.(Section 07 - 6S - 8E area). Our understanding is that there are active wells in close proximity to that region.\nThank you for any information you are able to provide.\n
A: The Oklahoma Corporation Commission (the regulatory body for oil and gas in Oklahoma) has a wealth of information available online relating to oil and gas activity and production in Oklahoma. You can look up such things as drilling permits, recent production information, well completion reports, forced-pooling orders, and anything else that falls under their jurisdiction.

Adverse posession of mineral rights? Asked 10/23/2013
Q: An attorney with whom I have spoken claims that in California, at least, that when real property is conveyed, all one owns are the first 500 feet below the surface, so that it is possible for one to file a mineral rights claim on any piece of property in which those rights are not specifically granted and conveyed. He also claims, however, that the right does not arise unless there has been no effort to exploit or develop the mineral rights by the current vestee for 20 years. None of this makes much sense to me. I wouldn\'t think that when I buy a home, I have to worry about whether or not I own the mineral rights to the property upon which the house sits. Can you clarify?
A: He may be right about the surface estate only extending 500 feet down, but SOMEONE owns the mineral rights below that depth. You cant' just "file a claim" on them simply because they haven't been developed; at least not in California that I know of.

Filing an adverse possession" claim on mineral rights (which is what he's suggesting) is not easy and will not usually be granted by a court. It's much easier to adversely possess land than it is mineral rights, and in the case of land it's usually only small parcels such as those running along a disputed fence or property line rather than huge acreages.

Also, just because a deed for a sale of land does not specifically convey mineral rights doesn't mean none weren't conveyed. Actually if the grantor owned the mineral rights at the time of the sale and fails to reserve them or specify "surface only" on the deed, then they are in fact conveyed along with the land to the new owner.

Mineral Hub
New Mexico oil and gas lease offer Asked 10/20/2013
Q: I have been offered a lease agreement from San Juan Basin Properties for my 8.3333% mineral interest in 165 acres in Sandoval County, NM. Township 22 North, Range 1 West. Section 17: NWNW, N2SWNW and Section 18: NENE, S2NENW, S2N2NENW, E2NWNE, SWNWNE, S2NWNWNE\nThe offer includes a $100 bonus consideration and a 1/6th royalty. The term is for a primary 5 years, with an option for another 5 years after a payment of 125% of the initial bonus. The lease offer includes a PUGH clause.\nThe area has shown recent interest because of the San Juan Basin / Mancos Shale formation. \nIs this a fair offer? I\'ve noticed that BLM auctions in the area have yielded $200-$400 per acre, but they are for 1/8 royalty rights. Any info to help me make a better informed decision would be appreciated. Thanks!
A: Not much activity at all in that county. I'd say due to the lack of competition for leases in your area you're probably not going to do much better than the $100/acre. I would strongly suggest that you NOT agree to the 5-year extension option though, unless they agree to pay you AT LEAST double the original offer, and even then $200/acre is really not that much either. Better to just tell them you'll be happy to consider leasing to them again in five years at the THEN-CURRENT RATE, but that you don't want to agree to a potential 10-year primary term right now.

Frederick M. Scott
The Mineral Hub
How to transfer mineral rights to heirs upon death? Asked 10/20/2013
Q: upon my death my mineral rights would be passed onto my son. how do I go about this? thanks, gb
A: There are many ways to convey minerals at your death. A "transfer-on-death" deed is one method you could use if you want to transfer upon your death. Setting up a trust with your son as the beneficiary would be another.

t would be simpler, estate-wise though, for you to just transfer the mineral rights to your son while you are still living, and retain a "life estate" in them. Retaining a life estate would allow to remain in control of them while you were still living if you so chose, but they would pass automatically on your death.

Check with an attorney for some advice on which option is best for you. It's not rocket science, and yes, attorneys cost money, but a good one is well-worth the cost and could make sure the documents were drawn up correctly and reflected your wishes.

Frederick M. Scott
The Mineral Hub

Frederick M. Scott
The Mineral Hub
Can mineral owner lease without landowner consent? Asked 10/19/2013
Q: Our property in WV was sold to us in 1964 with only one-half the mineral rights. The other half had been sold in 1956 with a deed recorded in the County Courthouse. Can the owner of only one-half of the mineral rights agree to leasing and development agreements without the knowledge and consent of the landowner?\n
A: Most definitely, but before a well is drilled they'd attempt to locate and get permission from the owner of the other half of the minerals as well. The landowner however, really has no say as to whether a well is drilled or not, and is not normally entitled to any sort of payment unless the landowner also owns some of the minerals being leased.

In most cases, if the well is actually drilled on your land, the oil company would likely offer to pay you something for the "inconvenience" of having a well drilled on your land. The payment would be used to compensate you for any damages to growing crops etc. caused by their operations.

Frederick M. Scott
The Mineral Hub

Frederick M. Scott
How to run title? Asked 10/19/2013
Q: I was wondering what advice you would have for someone trying to develop an understanding of how documents pertain to one another? I am working for someone who plans to drill for oil at several locations and have been given this job, as a trainee, to locate all documents of ownership of surface and Oil, Gas and Mineral Rights. I am trying to develop a systematic approach in locating a complete history of the mineral rights and reservations as they are the primary interest of my employer. I have been working on the principal of fake it until you make it and I just can\'t seem to find a way to put rhyme to reason in this field. Can you help?
A: A good starting place would be to read my article published in the Mineral Hub News entitled "How Can I Locate Who Owns the Mineral Rights Under my Land?

That should get you started.

Frederick Scott
State siezed land & mineral rights Asked 10/18/2013
Q: In 1950 ,upon his death, my great uncle\'s land was taken by the state to pay off a debt he owed to a state ran hospital. Did they automatically take the ownership of the mineral rights as well? How long does a family have to claim mineral rights?
A: If he owned the minerals under said land, they likely got that too. You'd have to check the conveyance granting them the land to see for sure if it included the mineral rights. If he owned both surface and minerals, and minerals weren't specifically excluded or the deed didn't state surface only or some such thing then likely they got the minerals too.

Frederick M. Scott
Mineral Hub
Lease bonus rates in Texas and Cimarron counties in oklahoma Asked 10/17/2013
Q: I have a client who has received inquiries about leasing his minerals in Section 1-5-8, Cimarron County , OK and in Section 17-5-10 in Texas County, OK.\nCan you give me some ideal of what current OGL terms are in that area now, including the royalty terms that are being provided now. Thanks for all you help.\nThe offers now are 3yrs/@$35.00per acre/@ 3/16royalty. Is this a ballpark offer?
A: If there's not much activity in those areas (I doubt there is) then $35/acre is probably about right.

Mineral Hub
Logan Co, OK lease provision for extending lease Asked 10/17/2013
Q: The lessee notified us that they would be extending their option to extend the lease for another 3 years. The provision states they would pay us \"in additional bonus of 1 and one-half times of the bonus per acre\". Are we obligated to accept that? The person stated that the going rate was around $100 per acre, that it was a hot area. Our lease was for more than that amount. She said they would pay whatever the signed lease stated.
A: Yes, you are obligated to accept 1 and 1/2 times the original bonus you received since you agreed to do so when you signed the lease.

Mineral Hub
Leasing in Dewey County, OK? Asked 10/16/2013
Q: who are some of the oil&gas companies that are leasing in Dewey co. in western Oklahoma?
A: You can visit the county clerk's office in Dewey County and look in the township and range book that contains the section you're interested in. All leases will be filed there and company names and address are listed on each lease.

Mineral Hub
Will I pay taxes on the proceeds of a mineral rights sale? Asked 10/11/2013
Q: If I sell my mineral rights, is that taxable income??? What IRS FORM is it reported on? \nThank you, \n
A: In most cases, the proceeds from mineral rights that are sold are taxed (federally) at the (current) long-terms capital gains rate of 20%. This assumes you owned them for more than one year prior to the sale. Not sure of what form you'd use to report it, but you can check with an accountant on that.

Frederick M. Scott
The Mineral Hub
How do I figure my royalty rate from my check stubs? Asked 10/10/2013
Q: I have royalties in Stephens County TX. Some of the leases are quite old. I get a check from a company, and I know the decimal royalty interest (.00069450). The last check was 696.51 gross volume, 72,447.48 gross value, price 105.4507, 40.13 BTU/GRAV, taxes 3.384.24. My share was 120.21 net, 126.02 gross, 5.81 taxes. What is my royalty? How do I figure it? Some of my newer leases are 18%, 20%, and 25%. Thank you!!!
A: If the wells are pre-1980 wells, the royalty is probably 1/8, but you'd need to know the "unit size" (how many acres the well is draining...i.e. 40 acres, 640 acres etc.) as well as your decimal interest (which you do know) and acreage owned (how many acres you own in that unit) in order to figure it for sure. Once you know those things the formula would be: Decimal interest X unit size divided by net acres = your royalty (in decimal form.)

The Texas Railroad Commission has a wealth of well information available online concerning oil and gas activity. You can look up such things as drilling permits, production information and completion reports, as well as "unit size" (would be listed on the drilling permit.)

Frederick Scott
The Mineral Hub
Logan Co., OK Going rate Asked 10/10/2013
Q: Dear Mr. Scott,\nI have a small property located in Sec. 30 18 N 3 W of Logan co. In the past I was offered $500 nma and 3/16th but the lease was not taken though I had signed the letter of intent.\nI have been contacted again, different company. What are the current offers being made for this area? I have read other questions about Logan Co. so I assume it is of some interest.\nThanks, Sheryl
A: Section 30 was force-pooled in July so if you didn't lease by then you were likely pooled for the default values of $550/acre and 3/16 royalty and should have been sent a check for that bonus. $550/acre is the top end of the going rate anyway I'd say, based on other recent poolings in that township over the past year. (Pooling bonus amounts are usually indicative of current lease rates.)

You might want to contact Slawson Exploration Company if you were not paid a bonus for the aforementioned pooling. If they "forgot" to include you in the pooling, and you didn't lease to anyone yet, then you are in a much better position to negotiate if a good well is actually drilled and completed. This is because the operator would be "trespassing" on your mineral rights (i.e. drilling without permission.) You'd want to wait until the "good" well was actually completed though before "reminding" them they forgot to include you in it (either by leasing or force-pooling.)

If you don't want to wait until a potentially good well is drilled then I'd just determine whether you were included in the forced-pooling application (contact them and ask), and if you were, then you'd have a bonus payment coming. If you weren't, then you can still lease to someone of course. Slawson would probably give you a pretty good lease deal if they forgot to pool you. "Good" would be 1/4 royalty and $750/acre or something...a little extra since they forgot to force pool you, and it would still be cheaper for them to do that than to apply for another forced-pooling just for you.

The Oklahoma Corporation Commission (the regulatory body for oil and gas in Oklahoma) has a wealth of information available online relating to oil and gas activity and production in Oklahoma. You can look up such things as drilling permits, recent production information, well completion reports, forced-pooling orders, and anything else that falls under their jurisdiction.

Frederick M. Scott
The Mineral Hub
Drilling, production, leasing info for Illinois? Asked 10/06/2013
Q: Is there a website for Illinois where I can access drilling permits,production from current well, and estimate leasing bonus amounts being paid?
A: The governing body for oil and gas regulation in Illinois may have a website where you can look up such things as production, permitting, and drilling activity, but I don't think you'll find any information concerning the leasing of privately-owned mineral rights, since that information is generally not publicly available.

You can likely find a site where either the state or federal government is leasing their minerals however, which would give you an idea of what to expect. There are also numerous forums online where members discuss leasing information. Perhaps you can find one for your county.

Frederick M. Scott
The Mineral Hub
1.301 acres on lease vs. the 7.5 I think I own? Asked 10/05/2013
Q: If i have a sixteenth interst in 3 different forty acre tracts, shouldn\'t my net mineral acres be 7.5 ac.? If so, why does my lease say \"1.301 net mineral acres,120 gross\"?
A: I agree that if you own 1/16 of 40 acres you'd own 2.5 acres, and thus with three such tracts it would total 7.5 acres. If your figures differ from the company who leased you I'd contact the landman and ask them to explain. Did the bonus work out to be 7.5 acres worth of money? Remember that the oil and gas lease itself is not an accurate method of determining what you own. The lease itself lists only the gross acres being leased, and does not necessarily reflect what YOU own.

Hope this helps.

Frederick M. Scott
The Mineral Hub
Obligated to extend lease for two more years? Asked 10/04/2013
Q: Within a lease contract there is an option to extend the primary term lease for two year. I have recieved a bonus \ncheck for the 2 year extend period. If I do not cash the check does this mean I am still obligated under this lease?\n\nThere has been no production on the property.
A: You (or whoever the original lessor was) agreed to give them the option of extending the primary term an extra two years in exchange for a payment when you signed the lease. If they exercise that option and send you a check to pay for it then it's a done deal whether you cash the check or not.

Good news is they probably wouldn't have extended the lease unless they had some hopes they might be able to get it drilled within the next two years. Otherwise why pay money to extend it?

Frederick M. Scott
Mineral Hub
Leasing of mineral rights in Texas Asked 10/01/2013
Q: I have partial ownership of mineral rights on 3 tracts of land in Fannin County Texas. Two tracts is (maybe) 5/8 and the other is (maybe ) 1/4. The \"maybe\" is because the sellers were unsure of actual percentage that they owned and they conveyed 5/8 & 1/4 of whatever they owned. \nWho has the right to sign a gas and oil lease agreement? Is everyone else stuck with the deal that the first one to sign a lease makes, or is the surface owner the one that must make deal with the leasing /exploration company, or is it the majority mineral owner I have been searching and can\'t find the answer to this particular question.\n\nThank you,\nMarshall
A: How hard did you search? Maybe you weren't searching the right things because it's all over the Internet. Anyway, The mineral owner (or all the mineral owners if there's more than one) is the one who signs the oil and gas lease, not the landowner.

Hope this helps.
Mick
How to find out what I own? Asked 09/30/2013
Q: How can I find out exactly how much mineral rights I own from a particular tract of land. I have no paperwork other than know what county in Texas it is in.
A: The answer to your question is available on this website. Did you check out the rest of the site before asking your question? Try this link: How Can I Locate Who Owns The Mineral Rights Under My Land?

Hope this helps.
Mick
Texas Mineral Rights Asked 09/30/2013
Q: Do you handle Texas? I am in the process of buying land in Texas that has been foreclosed on by the bank. It is my understanding that the mineral rights then go back to the bank. How do I determine if they will pass to me when I purchase the property and if in fact the bank owes them?
A: You'd want to look at the mortgage/deed of trust. The subsurface mineral rights, if owned by the landowner, would have been included in the loan by default, though could have been specifically excluded (in writing) from same. Which is the case could be ascertained by reading the document. If no mention is made of the mineral rights, and the owner owned the mineral rights, then most likely they were included in the loan.

If you purchase the property from the bank, and the bank does not specifically reserve any mineral rights it owns, then you'd get the mineral rights.

You'd also want to confirm the landowner in fact owned the minerals, and if so, whether he owned all the minerals or just a portion. This could be done using the grantor/grantee index books at the county clerk's office.

Frederick M. "Mick" Scott CMM, RPL
Mineral Hub
Grandmother's oil gas and mineral rights Asked 09/24/2013
Q: I have an abstract that belonged to my diseased grandmother that was filed for record on The 27 day of January 1955 at 11:30 AM and recorded in book 40 at page 37. State of Oaklahoma , County of Custer \nIs this still on file and valid.
A: The document you refer to only indicates she may have owned something in 1955. She could have sold it later, or perhaps didn't. If she sold it there would be a record of it at the county clerk's office in Custer County.
Valuation of mineral rights in Logan County, OK Asked 09/17/2013
Q: We are interested in gaining more info on the options available to us regarding our mineral holdings in Logan County OK. From your website, we think you say that you will help us come to an estimate as to the fair market value of our interests. Does the anaylsis also inlcude the potential income stream of royalties we may be giving up by selling the rights. Clearly understanding that no one can forsee the future.
A: If you list your mineral rights for sale with us then we will be able to help you estimate their value to potential buyers, as well as estimate the potential income stream you'd be potentially (if a well is drilled) be "giving up" if you sold them.. If you've received offers in the recent past to buy them that would also help in our evaluation.

Mineral Hub staff
Does reservation of mineral rights carry over? Asked 09/13/2013
Q: In the first recorded deed the seller retained the mineral rights to the property being sold for him and subsequently to his heirs. Property has changed hands several times since with no mention of mineral rights. All heirs of the original owner who retained the rights are now deceased. How is the ownership of the mineral rights determined now? Is it the present owner or some or all those in the chain of ownership since the original deed was written?
A: As long as the original seller who retained the mineral rights is still living and didn't sell the mineral rights then he/she still owns them. The exception might be if the mineral rights are in North Dakota or Louisiana, and would then depend on how long the minerals have been dormant (i.e. not leased or producing) from when they were reserved. See each state's law for more details on that.

Mineral Hub staff
Mineral Right Value Asked 09/13/2013
Q: I own mineral right to 12.5 acres in Payne County, OK. I am seeking information to determine when the current lease expires in April, 2014 if it in my best interest to renew the lease, sell the rights or just do nothing. If I listed with your company, what price would you estimate the value of the property?
A: Depends on your goals really as to what is in your 'best interest." Selling them now would give you cash now, which could be used for other, less risky ventures such as a real estate purchase or paying down a mortgage or other bills. Certainly less risky than being an owner of a depleting asset like mineral rights. That said, sometimes risky things pay off and by selling you may miss out on a potential good well or future lease prices rising etc. Some prefer not to mess with the inherently risky nature of owning mineral rights, while others decide it's worth it and even thrive on it.

If not worried about risk, you could wait to see if they drill a well on the current lease and hope it comes in good, or if they don't drill a well you could potentially lease them to someone else in 2014. Same as doing nothing (for a while) really as it's just a wait-and-see scenario.

I took a look, and the only real activity I see currently in your immediate area is that Brittany Energy has applied for a "spacing order" in a section that is adjacent to yours, indicating that they plan to drill a well at some point within the next few years. The small spacing of 40 and 80 acres indicates any well will be a fairly shallow one. Since they also appear to be your current lessee, if that well next door is drilled and comes in good it's more likely a well would be drilled in your section, and the likelihood of that would perhaps increase the value of your rights.

Certainly not a guarantee that a well will be drilled in the adjacent section, but if so it's more likely one will be drilled in yours (assuming of course the first well is good...which brings us back to the "risk" factor of owning minerals rights...a poor well could just as easily reduce their value to potential buyers or future lessees.)

If they begin renewing current leases in this section as they expire, then I would expect you could sell these rights to someone for between 2 and 3 times what they were offering to renew for assuming you hadn't already renewed your own lease. If the well next door is drilled and comes in nicely prior to leases being renewed in your section that multiple could increase somewhat.

Hope this helps you out.
Mick at the Mineral Hub


Mineral Rights - Fee Asked 09/11/2013
Q: Does the word \"fee\" in a specification land book legal description mean the owner owns the mineral rights? I know in the legal description \"sur\" means surface only. This is in the State of WV. Thank you..nice site
A: Generally, land conveyed using the words "fee simple" also conveys the mineral rights IF the Grantor owned them art the time of the conveyance. To find that out you'd have to run the chain of title to see if they ended up with the Grantor or were severed before the Grantor acquired the land.

Frederick M. "Mick" Scott CMM, RPL
Manager,
he Mineral Hub
Wind energy lease Asked 09/11/2013
Q: My brother and I own the mineral rights to the SE 1/4 7 15N 6W, Kingfisher County, OK, and he owns all the surface rights. We have leased to Chesapeake, an i learned today that they sold our lease below the Chester Formation to Gastar. He recently was approached by Apex Energy to sign a wind energy lease. It provides that any wells must be completed in 45 days or less, and no drilling within a 500\' radius of a turbine. Many questions here, but the main ones are which is superior, the o&g lease or the wind lease? Will signing the wnd lease make the property less attractive for drilling? Many thanks!
A: The wind energy company can't stop an oil company from drilling really, since the mineral estate is the "dominant" estate. In fact, Oklahoma in 2011 adopted the Exploration Rights Act of 2011 (HB 1821), which basically states that the mineral estate remains the dominant estate and thus a wind lease cannot prevent those with the rights to drill a well from doing so.I would think this would comfort the oil companies and thus not make the property less attractive for drilling should you sign a wind lease.

I would also be VERY careful about signing a wind lease without running it by an attorney who's had some experience with these things. A good attorney would put limitations on the lease that you might not think of.

This issue has been addressed by at least one Oklahoma Court. You might want to read this case for more information. It can be found HERE

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Proving ownership of mineral rights Asked 09/09/2013
Q: We purchased surface and mineral rights to a piece of land over 10 years ago. We recently found out that minerals have been extracted for the past five years from this land. We received no royalties. When we contacted the oil and gas company, they requested that produce a certified copy of a Surveyors Plat of Minerals. Is there such a document and why can\'t the Deed which describes the land owned and boundaries of it be acceptable? \n
A: The deed from the former owner to you should be sufficient assuming the former owner owned the minerals and didn't reserve them in the deed to you. The company surely ran title on this tract if they drilled a well that includes it and so would know whether the former owner owned the mineral rights under it or not and thus the deed from that owner to you should be sufficient to put you in pay.

In many states interest is due on royalty payments that are considered "late" by state law. This would include minerals that have title issues but that in the end are actually owned. Check with an attorney for advice on how to proceed.

Mineral Hub staff
Where is Section 25 13N 3E in Lincoln county Oklahoma? Asked 09/07/2013
Q: Where is Section 25 13N 3E in Lincoln county Oklahoma. Is this concidered North Central Ok?
A: I would say more "central" Oklahoma, about six miles W SW of the town of Sparks, OK, or about 5 miles NW of the town of Meeker, OK.

Frederick M. "Mick" Scott CMM, RPL
Valuing mineral rights sale for capital gain purposes? Asked 09/05/2013
Q: I recently sold my mineral rights. How do I set an original value to those mineral rights when I acquired them back in 1994 for capital gains considerations?
A: I would ask the buyer for a 1994 valuation. The buyer would likely have an idea of what they were worth then. In lieu of that you may need to hire a landman or some other professional who has knowledge of the oil and gas activity in the since 1994. An oil and gas attorney would also likely be able to advise you.

Frederick M. "Mick" Scott CMM, RPL
Selling land with oil and gas lease in place Asked 09/04/2013
Q: We currently have an oil and gas lease in place on our 19 acres. We were set to close this week with a buyer, who was aware of the lease, but he suddenly backed out. Reason being, he stated that he was not aware that the lease granted the oil company right to use the surface if they so chose. Obviously, we are disappointed but we\'re afraid that this lease might encumber any sale in the future and make it difficult to do anything with the land...at least for several years.\n\n\nIs this a common issue or is it just buyer specific? Do we have any options at this point or just hope that a buyer comes along who is okay with the lease,etc.? Any advice is greatly appreciated. We don\'t know how to proceed in selling our land. We would like to reserve mineral rights but understand we may have to convey all or part in order to ease any buyer\'s concerns. Thanks!\n
A: Fact: An oil company can use as much of the surface as is reasonably necessary to produce the oil and gas beneath the lease premises, absent lease language to the CONTRARY. The fact that your oil and gas lease "granted permission" to the oil company to use the surface should have been of no consequence to the purchaser since they already have that right unless they agree to give it up in the oil and gas lease agreement, which they apparently didn't.

I am assuming the "land use" granted in the oil and gas lease was for no other purpose than that stated above, such as running a pipeline across the property or something. A ROW for a pipeline could dissuade some purchasers, but even then I would think most purchasers wouldn't be that bothered by a pipeline right-of-way.

I would think that selling the mineral rights along with the land would be a plus to most buyers because they will either have royalty payments from the oil and gas at some point or will likely be able to re-lease the oil and gas rights in the future and receive a lease bonus payment while exhibiting some control over the terms of the oil and gas lease. Even if you kept the mineral rights, I really don't see "land use" by an oil company being much of an issue unless it were related to something other than producing the oil and gas beneath the land. .

Frederick M. "Mick" Scott CMM, RPL
Oil well closing (plugging)? Asked 09/04/2013
Q: What are the requirements for closing a well and can the lessor require a closing?
A: I assume you mean "plugging" a well rather than closing? Assuming you do, it's usually up to the oil company (operator) as to when that will happen, but if a lease is in your opinion not producing enough oil and/or gas to recover the lessee's costs in operating the well you may have an argument to get them to plug the well rather than continue to dribble it along for years at a loss. This would allow you to perhaps re-lease the property to another company who would further develop it by drilling another well that would hopefully produce more.

Most lessee do not want to give up on a well until THEY are ready to though, and since they've likely invested a lot of money and perhaps time into the project already, you might have to take them to court and convince a judge the well is not producing "in paying quantities" and that a "prudent operator" would thus choose to plug this well.

The lessee (oil company) will likely argue that they ARE being "prudent" and DO plan on improving the production (if any) in the future; unless of course you are just talking about a well that's been abandoned by its operator and is not producing anything. You'd probably want to contact the oil and gas regulatory body in the state where the well is located in that case.

Mineral Hub Staff
Transfer of mineral/gas/oil rights to a trust Asked 09/04/2013
Q: We have several blocks of land in Dickinson/San Leon Texas, under which they have discovered very large gas deposits. The field has yet to be developed. The land has been in our family since the mid 1920s. Always under one title long to my grandfather who passed away many years and left it to my mother.\n\nWe now want to sell the land but want to retain mineral/gas/oil rights. Rather than one person, or her estate in general carving up the land and rights, mom would like to put the oil rights into our family trust (Australian) which was established and has been operating for more than 25 years. What is the best way to proceed with this sort of activity? Can you suggest a company in Texas that may be able to assist with this type of sale/transfer of mineral/gas/oil rights?
A: You don't need a "company"; you need an oil and gas attorney who is licensed to practice law in the great state of Texas. He/she could help you transfer whatever you wished in to the trust, though technically you mother could simply execute a deed into to the trust herself. I would still recommend you get an attorney to help you with this though just to be sure it's done right.

John McFarland is one such attorney you might consider. I don't know him personally, but his Oil and Gas Lawyer Blog has impressed me enough to put his name here and give him a plug. He seems to know his stuff. I'm sure there are many good Texas oil and gas attorneys who could help you out, and you might even do better with an oil and gas attorney who is also well-versed in trusts and estates. John may or may not be you'd have to ask him.

Hope this helps!
Ellis County, OK lease offer fair? Asked 09/04/2013
Q: I have been asked by a land service company in Oklahoma whether I would be willing to sign a lease giving them mineral rights. They have made two offers: 1)$750/acre of effective mineral rights with 1/8 Royalty fees or $500/acre with 3/16 Royalty fees. Are these fair and competitive offers for land in Ellis County OOklahoma?
A: First off, even though a lease is both a contract and a conveyance of sorts, you really aren't "giving" them your rights when you sign a lease, you are simply giving them the exclusive right to produce your oil and gas for a period of time, and in return are paid (usually) a lease bonus, and will receive a royalty on top of that if they obtain production from the leased premises.

As to the fairness of the lease offer you received, Ellis County is a big area so lease bonus prices will vary greatly throughout the county most likely. Without a legal description telling me where these are it's hard for me (impossible actually) to venture an opinion as to whether their offer is fair. If you know some other mineral owners in the immediate area I would check with them to see what's been offered to them if anything.

You could also perhaps check with a local bank in the area where the minerals are located. Sometimes they keep track of those things, especially if many of their customers own mineral rights.

Mineral Hub Staff
Mineral rights my mom owned still in her name? Asked 09/02/2013
Q: I found in some of my deceased mother\'s papers an Oil and Gas Lease from 1981 in Oklahoma, Payne County Sec 28 T18N, R4E SE 1/4. How do I check to see if these mineral rights are still in her name? She passed away 14 years ago.\n\nThanks\n\nJim Rider
A: CALYX ENERGY LLC is currently leasing in this section, or at least has been recently. You might contact them and explain to them that your mother at one time owned some mineral in this section and you are curious as to whether they may have been trying to contact her or her heirs to lease these rights.

Other than that method, you'd need to head down to the county clerk's office in Payne County. If she sold them prior to her death there would be a record of it there. If she didn't sell them, then you'll need to have her estate probated in Oklahoma before any of her heirs will have marketable title to them, though you may (depending on the company) be able to LEASE them without going through a probate, but eventually it will need to be done.

Frederick M. "Mick" Scott CMM, RPL
How long until first oil check arrives? Asked 09/02/2013
Q: When will you get money when they find oil?
A: About six months after first production usually, then monthly thereafter if it's a decent well.
Lease provisions from buyer's perspective? Asked 08/30/2013
Q: Do prospective buyers of mineral leases care much about the non-financial provisions of the lease, in particular such things as free use of oil and gas, shut-in provisions, force majeure, depth clauses, and so on. Thanks.
A: Yes, they do. Most lessees include free use and force majeure clauses into leases they draft, and would prefer not to see shut-in limitations or depth clauses added by the lessor.
Determining Ownership Asked 08/30/2013
Q: Eleven members of my family inherited equal shares of my grandmother\'s mineral rights. She was from Oklahoma & we are all residing in Georgia/Alabama. Several years back we all received an oil & gas lease offer. At that time we tried to learn as much as we could about mineral rights and working with landmen, etc. The lease has since expired. Now my mother is receiving a new lease offer. She is the only one of the family members I am in touch with that has received the offer. How can it be that all inheritants are not made the offer? Also, it appears that we may all own more rights we are not aware of. Is there a way to know what my grandmother owned & if they could have been passed to another family member before her death? Thank you!
A: Just because one "inheritant" is made an offer is no guarantee the others will receive an offer, though it is likely they eventually will. Probably better to lease as a group if you can (more bargaining power that way.)

To find out what you all own you'd need to visit the county clerk's office in the county where the mineral rights are located, or hire someone to do it for you unless the records are available online. An article explaining how to do a search of property records can be found on the Mineral Hub Dispatch page of this website.

Sincerely,

Mineral Hub Staff
What does "$10.00 and other good and valuable consideration" Asked 08/28/2013
Q: In my cover letter it states a lease bonus, but the contract has a statement: In consideration of the sum of $10.00 and other good and valuable consideration, the receipt and sufficiency of which...\n\nWhat does that mean and what is the $10.00 about?
A: It's just a "placeholder" really, and doesn't usually represent the actual amount of money changing hands, though you should keep a written statement, email etc. from the lessee stating the actual lease bonus you were paid for your records. The "$10.00" etc. is very common in mineral deeds and leases. I wouldn't worry about it.

Frederick M. "Mick" Scott CMM, RPL
Can you sell land without selling mineral rights? Asked 08/28/2013
Q: Can you sell land without selling mineral rights?
A: Of course, assuming the land is in America. They are two separate estates in America, so you can sell one (i.e the surface estate) and retain ("reserve") the mineral rights under the land (mineral estate.)

Mineral Hub Staff
Mineral "prescription" in Louisiana? Asked 08/28/2013
Q: I bought land ten years ago seller retained mineral rights. I bought this land in Louisiana, laws are different in La. Do I retain mineral rights after 10 years?
A: If no good faith effort is made to explore and produce the minerals for a period of ten consecutive years, then the "mineral servitude" as it's called, will end, and the mineral rights will revert or "prescribe" back to the current landowner. If that's you, then you would own them.

Mineral Hub Staff
How do we transfer Mom's mineral rights to us? Asked 08/23/2013
Q: My two sisters and I would like to have our mothers mineral rights transferred to us, she does not have a will and we live in Hawaii, the mineral rights are in Otero County Colorado.
A: If Mom is still living, you can have her sign a mineral deed granting you the mineral rights. An attorney could draw one up for you for less than $200 most likely, as long as you have a legal description. If she's deceased you'll need to have her estate probated in Colorado in order to transfer the mineral rights to her heirs most likely, whether she had a will or not.

Sincerely,

Mineral Hub staff
Fair Lease Offer? Asked 08/22/2013
Q: How do you determine if the lease offer is fair?
A: Please see the Mineral Hub Dispatch page for an article on Oil and Gas Leasing Tips. Should help you out.

Sincerely,

Mineral Hub Staff
Who owns the rest of the mineral rights? Asked 08/22/2013
Q: I own the miner Al rights on 163 acres in Henderson co. Texas. I received a letter of distribution but it said \nI only get 3% . How do I find out who owns the rest?\n
A: Go to the local abstract office and look at the tract index book for your area. For more details on that please read the article in the Mineral Hub Dispatch on this website.

Sincerely,

Mineral Hub Staff
Carter County, OK lease offer? Asked 08/14/2013
Q: I live in California, but have several mineral rights in Carter County. (Inherited from my dad who was an independent operator for many years in Ardmore.) I received a letter recently from a \"good ol\' boy\" in Tuttle for a lease: W/2 SE/4 NW/4. Section 9, Township 03 South, Range 02 West. He offered $600.00 per net mineral acre for 15 acres. In Feb 2012, I signed a lease with Chesapeake for Section 15-042-03E in Carter County. They paid me $925.00 an acre(plus 3/16th). They told me that Chesapeake was going to do fracking. I got taken in the past when I sold some non-producing mineral rights to an independent guy from Carter County so I am reluctant to just let them lease this for $600.00 (plus 3/16th.) It seems like it\'s worth more. I\'ve read that some of these guys flip the leases and make big bucks. Plus, they want me to sign the lease BEFORE they hire the land man to check it out and before they commit to a price. Seems fishy to me. Any advice?
A: It "seems" like it's worth more you say? How did you arrive at that conclusion? As for wanting you to sign the lease before they check title, that's not unusual at all and in fact most companies work that way, which is why they like to send a post-dated "bank draft" or "payment order" along with the lease, which gives them the time they need to check the title.

If you haven't already read the Oil and Gas Leasing Tips article in this site (found on the Mineral Hub Dispatch page) you should do so before signing any lease, and I think many of your questions will be answered there.

Frederick M. "Mick" Scott CMM, RPL
Sale of mineral rights restricted by Trust Asked 08/13/2013
Q: My father set up a trust years ago that would own the mineral rights. He later established a trust for me so that it would inherit a portion of those rights, but with the clause in his trust stating that \"under no circumstances shall any Oklahoma mineral rights be distributed during the lifetime of [me].\" I believe this is in violation of the Oklahoma law that states it is my (trust\'s) right to sell those mineral rights. The trust officer disagrees but I am adamant.
A: Adamant, but wrong, or at least against your father's apparently wishes. To be certain you could have an attorney look at both trusts to see whether you can in fact sell these.

Additionally, there is no "Oklahoma law" dictating that a trust has the right to sell mineral rights. What rights a trustee or beneficiary might have will be outlined in the trust document itself.

Hope this helps you out.
Taxes on OGL bonus? Asked 08/12/2013
Q: We recently learned that our father, who passed away this past December, owned mineral rights to two acres in Logan County, Oklahoma. We three kids have been notified of a pooling order on the property, and later received an offer from a Landman for leasing the mineral rights, which we have accepted. We three kids will be splitting the bonus and the interest. My question is, is there a way of estimating in advance how much in taxes we will be paying on these interest payments? We certainly don\'t expect the return to be enough to buy a mansion in Beverly Hills with a cement pond, but it would be nice to know how much of the proceeds to set aside for when taxes come due.
A: Bonus payments and royalty payments are taxed at regular income3 tax rates on your federal tax return (though there is a small depletion allowance (break) for royalty payments,) so it will just be added to whatever other taxable income you receive this year from your jobs etc. Your accountant can help you figure out whether the bonus will be large enough to put you in a higher tax bracket this year or not. With only two acres, I really doubt it will make a difference.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
www.mineralhub.com
The Mineral Hub

Oklahoma intestacy laws Asked 08/08/2013
Q: my father passed away and owned oil and gas royalties, he did not have a will, my sister and i are the only remaining immediate relatives. do these now belong to us? his wife recently passed away and we were just given this paperwork, apparently she had been cashing the checks over the last 7 years.
A: If your father had no will, then 1/2 of any mineral property he owned in Oklahoma would have gone to his surviving wife, and the other 1/2 would have been split evenly between any children the two of them had together.

If his wife was not your mother, then she would have split the property equally between her and your father's living children assuming your father owned the rights prior to their marriage (if not, then she would get half.)

These are called "intestacy laws" and I'd check with an attorney to be sure I've got the fractions right. In any case, I doubt you'll be able to get any money back from the checks his wife may have cashed but at least could get it straightened out for future payments by having his estate probated in Oklahoma.

Fact is, his wife likely was able to continue cashing checks that came in his name even after he passed away, since her name was likely on the account as well.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
www.mineralhub.com
The Mineral Hub

Where is 32-9N-16W in Washita County, OK? Asked 08/07/2013
Q: We recently inherited a small mineral rights /oil and gas lease from my wife\'s mother. of It is section 32 of 9N 16W in Washita county. My question is how can I find out what the exact physical location of this area is? My friend is in the gas line business currently up in Enid and he said he would take a ride over to check it out if I had an address. There is nothing on our lease with Apache Corp which states a physical address, just the NW Quarter of section 32 9N, 16W and containing 160 acres...Thanks for the great website- lots of very useful info-TOM
A: 32-9N-16W is about 5 miles SE of Cordell, OK.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
www.mineralhub.com
The Mineral Hub



Term mineral deed question. Asked 08/06/2013
Q: On a tract of land my husband and I own, 44% of the minerals were held out for 40 yrs, beginning in 1949. Throughout time one person held out 27% of the minerals, then a few yrs down later a person held out 25% of the minerals he owned. In 1980 we purchased the land and received the remainding minerals. My question is does the person holding out 25% of the minerals he owned have any rights to the 44% that reverted back at the time we owned the land and remaining minerals? In my thoughts the 25% was of what he had at the time he sold the minerals, which at that time the 44% was still reserved, so he would have no rights to that. Is my thinking correct?
A: You'd have to look at the specific deeds/conveyances to be certain. By studying them and "doing the math" (keeping the term of 40 years in mind) you could figure it out.

The 44% that were held out for 40 years would go directly to whomever that reservation said it would go to at its expiration (usually it would be the current landowner.) If the deeds are confusing you might have an attorney look at them. Shouldn't be to hard to figure out once he/she had them in plain view.

If you have them and want to email ALL the pertinent deeds to me I'll take a look, but keep in mind I am NOT an attorney so any opinion I gave you would be my own, and not actually a "legal" opinion. My email is info@mineralhub.com. Please include your question in the email (or at least reference it) as I get a lot of emails as you might imagine with such a big website.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
www.mineralhub.com
The Mineral Hub

Info on current lease bonus amounts in Beckham County, OK? Asked 08/06/2013
Q: \nAny info on current lease bonus being paid for Beckham Co.\nOK T10N R24W?
A: Your best bet would be to contact some of the companies currently leasing in this township. Turner Oil and Gas Properties Inc., Vernon L. Smith & Ass. Inc., and Apache Corporation are three that have been buying leases in this township in 2013, with the first two being "land companies" who are likely doing the leasing for Apache or some other oil company. You should be able to "Google" the contact info for each of them fairly easily.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
www.mineralhub.com
The Mineral Hub

How do I transfer decedant's mineral rights into my name? Asked 08/04/2013
Q: MY WIFE OWNED MINERAL RIGHTS IN CUSTER, MARSHALL, GRADY, AND STEPHENS COUNTIES OF OKLAHOMA. OUR HOUSE BURNED DOWN ON AUG 4, 2012 WITH ALL DOCUMENTATION. MY WIFE PASSED AWAY ON AUG 22, 2012. \nHOW DO I TRANSFER HER MINERAL RIGHTS INTO MY NAME AND RECORD THEM IN THE PROPER COUNTY?
A: All she owned would be filed of record at the county clerk's office in each county. In order to transfer what she owned to you you'd need to have her estate probated in Oklahoma. An attorney would likely charge you between $1500 and $3000 to get this done and recorded, assuming it's not a complicated estate.

Minerals in parts of some of these counties can be worth a lot of money so if she owned more than a few acres I'd say having a probate done would be worth the cost involved.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
www.mineralhub.com
The Mineral Hub

OGL question from Pennsylvania. Asked 08/01/2013
Q: I have a property im Mansfield, Pa. with 26 acres. I can see 5 gas wells from my property with the mearest 2 around a mile or less from my property and the rest strung out in a line from them. there is also a number of pipe lines nearby. I had a co-owned lease with my father, he passed away 2 years ago and I now own the property outright and the lease expired last month. A year or 2 ago the leases were going for $4000+ per acre but now swepi wants to offer $300 for a 5 year plus 5year extention possible. I think that and the 1/8 royalties ar far from fair. I hope to negotiate favored nation, no fee, no caping, and 1/3-1/5 royalties. I don\'t know what a fair offer is for a lease currently. Also the governor has passed a law recently to allow forced pooling I believe. I have not been able to find a sight with all the language I can add to a lease to improve my situation. do you know of a sight? what is a lease worth in my area? thank you.
A: My advice would be to hold off leasing until gas prices rise. I certainly wouldn't agree to an option for an extra five years, which effectively makes it a ten-year lease. Five years is plenty of time to drill a well. Otherwise they are just "speculating" with your mineral rights.

1/8 may be the "going rate" these days, but I'd still shoot for at least 3/16 before I'd agree to anything, unless the bonus was substantial and you needed the cash. $4000/acre isn't going to happen these days I'm afraid, though I agree just several years ago companies were paying that, and more, in certain parts of the state.

You can contact the National Association of Royalty Owners in Tulsa, OK. They may be able to provide you with a recommendation of an attorney up in your area who could help with the clauses you seek. Otherwise I'm sure if you look hard enough you can find examples of all of them online.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
www.mineralhub.com
The Mineral Hub

Washit County, OK mineral rights value? Asked 08/01/2013
Q: Mr. Scott,\n\nMy siblings and I just inherited a quarter section of land, including surface and undeveloped mineral rights, in Washita County, Oklahoma. Our property is located in the NW4 of 19-8-19. Could you please guesstimate a fair market value for our land? If you are unable to, do you know of someone who might be able to help me? Thanks in advance for your time and trouble. \n\nSincerely,\n\nTom Senter
A: The mineral rights are probably worth around $500/acre or so, $600 at most would be my guess. There's just not much going on around there currently to justify a higher price right now. Perhaps when/if gas prices (natural gas) rise substantially this area will become more active.

I am not a real estate agent and so have no idea what the land might be worth. You'd do better talking to the neighbors on the land issue.

Hope this helps you out.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Should lease bonus be referenced in the oil and gas lease? Asked 07/30/2013
Q: A land service company has approached us about obtaining an Oil, Gas, and Mineral Lease, and for this, they have stated in their letter that they are offering the following terms:\n\n 1. Bonus: $45o.00/net mineral acre\n 2. Royalty: 3/16\n 3. Term: 3 year primary term (paid up) and 2 year Option \n at $450.00/net mineral acre.\n\nItems 2 & 3 are mentioned in the lease agreement; however, the bonus of $450.00 is not mentioned in the agreement. Should the Bonus amount be included in the agreement? If so, where?
A: The bonus will be referenced on the cover letter and/or bank draft or payment order they sent you, rather than in the lease itself.
Options in Logan County with OGL Asked 07/23/2013
Q: I have these Mineral Rights leased until January 11, 2014 with a lease renewal clause that Leesee has option for an additional three years at 1 1/2 of signing bonus per net acre.\nThis area, Devon Energy is wanting to drill and they are talking about force pooling. I have been offered by companies to purchase mineral rights but amount is going down as Court Hearing is 7/30/13. Can I get out of this renewal lease and sell rights? or lease at higher rate to another company? They only paid $700 total in 2011 and now the rate is $450/acre by online data and letters have offered $200/acre plus royalty. What are my options? I assume that since there is a lease on my 160 acres, they can not pool me? correct?\nThank you,
A: As long as your current lease is in force they cannot force-pool you (though some companies would argue that.) I've seen no application for a forced-pooling yet in that section, though Devon is pretty busy in the adjacent sections it seems, and did force-pool section 19 in July for $250/acre and 3/16.

While you cannot "get out of" the renewal, you can certainly sell the rights if you want to. The lease status has no bearing on your ability to sell the rights.
How to find out what's going on in my area? Asked 07/19/2013
Q: we have minerals in alfalfa co ok, sec 16 -26-12 . how would I find out what other wells are doing in that area. and what is considered a good well? hope to see drilling on that section soon. any information would be great. thank you
A: The Oklahoma Corporation Commission (the regulatory body for oil and gas in Oklahoma) has a wealth of information available online relating to oil and gas activity and production in Oklahoma. You can look up such things as drilling permits, recent production information, well completion reports, forced-pooling orders, and anything else that falls under their jurisdiction.

Disposition of old lease Asked 07/19/2013
Q: Lease in 1976, many years of low yield gas well, now no production. At least no income from current oil company and no required $1/acre to HOLD the lease. This area has been \"hot \" for the past 3 yrs with virtually every section with one horizontal well, thereby holding the area (Woodford\" in NW OK. The rigs all moved to higher oil content areas about 2 yrs ago. The owner of the lease cannot afford to drill, they did get permission about 18 months ago but did not. How do we know when the lease has expired legally? We have no correspondence or money from them since 15 to 18 months ago.\n\nThere are two producing horizontial producing wells, one accross the road in the center of the section and the other 300 ft to the SE corner of the section.\n\nBob\n\nBob
A: If there is no production in paying quantities from the leased premises currently, and the well is not shut-in, then the lease has expired of its own terms. You can check to see if the well is producing by checking the Oklahoma Corporation Commission's website.

The Oklahoma Corporation Commission is the oil and gas regulatory body for the state of Oklahoma, and on their website you can find a wealth of information about what's going on in the area where your mineral rights are located. You can search for production, completion reports, pooling orders and applications, and other things that the Commission regulates. You can search their oil and gas database from THIS page.
Does my mother have mineral rights in Oklahoma? Asked 07/19/2013
Q: Around 1944, my grandfather told my mother for her wedding present, she could have his mineral rights in Oklahoma. She didn\'t take her father seriously, but now at age 91, is curious about the rights. How do we find out where and if there are actually mineral rights purchased so many years ago? My mother doesn\'t remember that town or community in Oklahoma that her father spoke of.
A: You'd have to visit the county clerk's office in the county where the mineral rights were located and search their grantor/grantee index for your grandfather's name. If he deeded them to your mother there would be a record of it there assuming he filed the deed of record.

Frederick M. "Mick" Scott CMM, RPL
Do we own mineral rights or only royalty rights? Asked 07/12/2013
Q: On our property is an old gas well which in our deed says that: Subject to a reservation unto......Previous owners name..... of the oil and gas royalties from any (then) existing wells on the premises, which reservation is set forth in deed Volume 352, page 500 and official Records and so on. No where on the title does it say they kept the mineral rights just looks like the right to the gas from this old well as long as it is producing. There is a lease on the gas from this small well to a Gas company. Does this mean we own the mineral rights and if this well goes dry what rights would we then have?
A: Yes, they only kept a right to oil and gas ROYALTIES from any then existing wells sounds like, rather than the actual mineral rights. You could pull the document referenced in 352/500 though to see exactly what was reserved.

If the deed to you was a mineral deed, rather than a royalty deed, then you would retain the mineral rights even if the gas well goes dry, meaning you could lease them later and perhaps have another well someday. You could also receive future royalties even if you were only granted a royalty, but to what extent would depend on the deed (i.e. could have been a limited "term" royalty deed for instance...or even a limited term mineral deed.) Have an attorney look it over for any clarification you need.

Frederick M. "Mick" Scott CMM, RPL
How to verify mineral deed was filed of record? Asked 07/12/2013
Q: Hello, I\'m working on a family project that concerns mineral rights in Montana. My grandmother\'s rights were bought by my mother 40 years ago and I possess the mineral deed that states such. Do I start at the county clerks office to see if this was ever filed and is legal? The land where the mineral rights lie has been in our extended family for over 100 years and now we would like to research how to gift the rights to current family living on the property. Thanks for all you assistance!
A: Yes, the County Clerk's office would have the deed on file if it were ever filed, and if it was ever filed of record the "filing stamps" would be on there to show that it's been filed, and where. If no stamps are on it then it was probably never filed but needs to be in order to put others on notice that you own them.

A properly executed deed is "legal" even if not filed, but best to file it so others will know you own those rights. Also North Dakota has a statutory law that severed minerals can be automatically abandoned "back" to the surface owner if the owner of the severed mineral rights does not take steps to retain ownership of the minerals (by either "using" them or filing a claim to them every 20 years) so it could be what you seek to do has already happened if the surface dweller is also the owner of the surface and has filed an "abandonment claim" to claim these minerals. If they do not own the surface then whoever does may have filed such a claim. Any such claim would be of record, as well as having to be published for several weeks in local newspapers.

Assuming you have not already lost the mineral rights, to "gift" the minerals to the current family living on the property you could simply execute a mineral deed to them, granting them all your interest in the tract of land where the mineral rights are located. Probably best to have an attorney draw that up for you if you are not familiar with deeds.

Frederick M. "Mick" Scott CMM, RPL
Can I cancel old oil and gas lease? Asked 07/06/2013
Q: we have leased twenty acres of land to oil company since eighty five,and have not received any money,how do we cancel contract?
A: Are you sure you should be getting paid? Perhaps there is no longer any production. If there's no production, then the lease has expired of its own terms and there is no need to cancel it. You need to determine if the lease is even producing. If you email me a legal description I may be able to find out whether it's producing or not. An attorney could also look that up for you.
Adverse Possession of Mineral Rights Asked 07/06/2013
Q: I own Prroperty in west Viringia. When i purchased it 5 years ago the last owner had the mineral right researhed back in the last 1800\'s. The attorney for the closing said he couldn\'t fnd any person or company owning the mineral rights. How do I go about applying for these mineral rights?\n\nThank You Paul Taylor
A: Someone owns them. To "adversely possess" them you'd have to convince a court, which wouldn't be easy. See an attorney about it if you want to pursue this. He/she could explain it to you.
Transfer on Death Deed Asked 07/05/2013
Q: Are you allowed/able to do a Transfer on Death Deed on mineral rights? What if you don\'t own the \"surface\" land, just underground? We are working on a will for a client, and I am having a hard time figuring this one out. Thank you
A: Yes. Mineral rights are real property so you can do such a deed on them just as you can with land.
Mineral Rights Asked 07/04/2013
Q: How can I find who owns mineral rights on a piece of property ? I am in escrow on a piece of land and the Seller is getting a divorce. In the settlement of this divorce the husband was granted mineral rights on a piece of property that they are selling. The title report does not have any recorded document about the husband having mineral rights. Any way to look this up other than a title search? \n\nThanks, \nCarol Fowler\ncarol@stagepresencehomes.com
A: That information can be found on the Mineral Hub website here: http://www.mineralhub.com/2010/04/how-can-i-locate-who-owns-the-mineral-rights-under-my-land/. To answer your question though, no, no way to find out if he owned mineral rights for sure without sending someone the county clerk's office to search the records.
Adverse Possession of Mineral Rights Asked 06/30/2013
Q: I have owned my property for 30 yrs. last 5 years gas drilling on neighboring property has been ongoing. Mineral rights did not come with my land, I have received multiple requests from companies to purchase my rights. Other companies have asked me to file for royalty monies. I know original owners have passed and no one has claimed interest in the rights. My question is, can I petition for the mineral rights to my land if there are no owners to be found.\nThank you
A: Either you do own them after all, or they companies are likely looking at old records and just "hoping" you own them. They'll eventually find out you don't if you don't. If you like you can send me the legal description and offers you've received and I'll do a brief search to see if you might own them after all. Keep in mind that if the previous owner of the land actually owned the mineral rights, but didn't specifically reserve them in the deed, or the deed didn't specify "surface only" then it's likely you do own them.

To answer your question though, you can not "adversely possess" mineral rights in most cases, especially if they are not producing. Even if they are, would be difficult to claim them just because the proper owner hasn't. You didn't specify which state, but if Louisiana then the minerals may have reverted to you by "prescription"; something done only in Louisiana.

You can email me at mick@mineralhub.com if you wish.
Grady County, OK. Lease now or wait? Asked 06/25/2013
Q: My Grandmother had mineral rights that passed to my Mom and have now passed to me. I received a phone call from Calvin Energy offering me $400 per acre, 3 year lease (with 2 year option) and 3/16th royalty. The property is Section 18-4N-7W in Grady County, OK. Can anyone offer any advice on this offer. I wasn\'t looking to lease, didn\'t even realize anyone would be interested. I am struggling with the \"this is too good to be true\" philosophy. Suggestions? I got a response on the Mineral Rights Forum that if I didn\'t need the money I should wait. What is the advantage to waiting?\n
A: Calvin Energy is the only one leasing in that section that I can see, so you're probably stuck with $400/acre or so for now anyway. By waiting you run the risk that they will pass you by once they have reached their leasing goal. If a well is drilled you'd still be paid of course, however it would be at terms offered (or defaulted to) in the forced-pooling order they'd have to apply for in order to drill a well without your lease. Being force-pooled is not that bad usually, as the options offered you are similar to leases, though you can't "add" any clauses to a pooling like you can a lease.

If you don't need the money you could wait I suppose, and see what happens. I'd be worried that perhaps they will continue to lease but won't drill a well and so you would lose out on any lease bonus in the meantime, though others who did lease would be getting paid.

If you're not sure what a forced-pooling is look around my website. I've written about it, and other topics (including leasing) there.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
Leasing Mineral Rights as a group vs. individually? Asked 06/16/2013
Q: Recently, we inherited land and mineral rights. We received an offer to lease our minerals. I understand that before this can be done they must have lease contracts with all the owners/heirs of the land. There are a large number of us. Does this mean that all of us will be offered the same terms as the original offer? Is it better to split the inheritance land and deal with the company individually or keep it together as one under the name of the estate? Also, how do they come up with their figures? Our land is worth about one half of a million dollars. Do they take this into account for anything when they come up with the amount for the bonus and royalty payments? If not, should we? Thanks.
A: In most cases it's better to lease as a group if you can because by saving the company "acquisition costs" (i.e. takes less time and effort to lease a group than it would to deal with each owner individually) you'll probably be in a better position to bargain from.

That said, you don't HAVE to lease as a group, and in cases where one of the owners may be especially difficult to deal with it may be better to lease individually.

Lease prices are based on what the company thinks it will take to get their quota of owners leased, not what your land may be worth. The only thing they take into account when setting prices for leasing is what they think it will take to accomplish their leasing goals. Sometimes they'll start out low but have to go up if that doesn't get it done.

Mick at Mineral Hub
Did my mineral rights get sold with the land? Asked 06/09/2013
Q: My father inherited acreage from his parents, later sold the land to his sister as did his siblings (no documentation of sale). According to my mother mineral rights were not included in sale). We found out recently our cousin is receiving royalties (he inherited the land from his mother). In researching we found out the mineral rights were not transferred from my grandfather until recently ( transferred to my cousin). My question is, if the mineral rights were still in my grandfathers name wouldn\'t the children still each have claim?
A: First off, if your father sold the land to his sister, there would be a record of it in the county clerk's office. If no mineral rights were referenced (i.e. reserved) in the deed or the deed didn't specify "surface only" etc., then any mineral rights your father owned under the land would have been sold right along with the land.

If the mineral rights came from your grandfather and were only recently transferred, that doesn't mean the cousin didn't already own them, it just makes it "official" now that the grandfather's estate has (I assume) been probated and a court order issued. The minerals were likely transferred at death for all intents and purposes. Check with an attorney who can actually see the paperwork to be certain.

To answer your question, if your father sold the land and didn't reserve the mineral rights or specify surface only, then your aunt would own the mineral rights (which makes sense if your cousins are now getting royalty payments.)

Hope this helps you out. Sorry to be the bearer of bad news.

Mick at Mineral Hub
Land value after mineral rights sold Asked 06/07/2013
Q: If the mineral rights of farm land are sold, how does that effect the market value of the land?
A: A sale of the mineral rights won't usually affect the value of the land itself, though of course most buyers will pay more for land AND mineral rights than they would for land (or mineral rights) alone. Some buyers feel they can keep drilling off their land if they own both the land and minerals, but this is not generally the case actually, since the mineral estate is the "dominant" estate, and you can't keep the mineral owner from his minerals if they want to drill.

The Mineral Hub
No news from lessee in Matagorda County Texas? Asked 06/06/2013
Q: We live in California and inherited mineral rights in Texas. We signed a 5 year lease for land in Matagorda County, Texas in 2012, but we have not heard anything since. Is there some way to find out what the plan is? Would the landman who contacted me know if this lease is speculative, or if there is an intention to drill? I know the company, but am not sure what I should be sharing on this site. Thank you.
A: Anything you ask in your question is reviewed by Mineral Hub staff prior to being answered or published, though once the answer and question are posted both will be visible to anyone who reads them, so if there's any confidential info you don't want published in the future please advise in your question and we'll edit that part out of your question prior to publishing.

As to your question, once you've leased it's unlikely the oil company will "update you" as to how things are going with their plans unless a producing well is actually completed, at which point they'll send you a division order to sign and begin paying royalties within a few months. You can always call the landman who leased you to see what's going on or if they plan to drill, but it's unlikely he or she will know either without contacting their client (which they may or may not be willing/able to do.)

You CAN however use the following site to see if a drilling permit has been filed or a well drilled. The Texas Railroad Commission has a wealth of well information available online concerning oil and gas activity. You can look up such things as drilling permits, production information and completion reports. You'll need the legal description (from the lease) for your search. The site is a little unwieldy to use but once you get the hang of it you'll find there's a lot of information there, and all free to search!

Hope this helps you out.
Mick at the Mineral Hub
Medicaid and Mineral Sale Asked 06/05/2013
Q: My 86 year old mother owns mineral rights & may be having to go to a nursing home in the near future - what does she need to do to sign over rights to me? If she has to go on Medicaid can the State take over the mineral rights even if she signs them over to me? She has received 1 royalty check so far. Also what do you show producing in Alfalfa County Oklahoma? \nThanks for your help!\n\n
A: She can sign the rights over to you using a mineral deed. Pretty simple. As to whether Medicaid will dis-allow the sale (or reverse it) if they think it was done simply to avoid paying the proceeds to Medicaid you'll need to talk to an attorney about that one but I would wager their "look back" period is at least five years so they will probably want the proceeds from any sale that occurs within five years of when she applies for Medicaid.

The Oklahoma Corporation Commission is the oil and gas regulatory body for the state of Oklahoma, and on their website you can find a wealth of information about what's going on in the area where your mineral rights are located. You can search for production, completion reports, pooling orders and applications, and other things that the Commission regulates. You can search their oil and gas database from THIS page.

Frederick M. Scott
CMM, RPL
The Mineral Hub
5-year lease term too long? Asked 05/28/2013
Q: My brother owns 80 acres of minerals in sec 10 T10N R14W Washita County Ok. He has an offer for $500 an acre 3/16 and a 5 year term. Is there any activity in the area and do you feel this is priced appropriately. Would prfer not to sign for 5 years.
A: The bonus isn't bad, but I'd shoot for a 3-year lease rather than a 5-year lease (or a 3-year with 2-year extension option.) Three years is plenty of time to drill a well. If they can't get it done by then they are just speculating with your minerals, and unless they are willing to pay up for an additional two years (i.e. double the original bonus) I'd try to get them to stick to three.

Not much activity in this area currently, so while I'd be happy receiving a lease offer I'd still try to keep it to three years.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Dividing royalty interests to my heirs Asked 05/26/2013
Q: My Will divides everything equally to three daughters upon my death. I am a royalty owner in Oklahoma, therefore I am curious what steps my appointed Executrix (daughter) will take to ini ate such divisions upon my death? Will the Oil Company (BP) do this upon notification at that time? Any recommendations to assure this division by me would be greatly appreciated. \n\nResident of Texas\n\n\n
A: As it is now, your executrix would need to have your estate (will) probated in court prior to actually taking ownership of the minerals. Until then, they would be owned by your estate.

For simplicity I would suggest just deeding any mineral rights over to them prior to your death, but keep a "life interest" in the property, meaning you could use it and benefit from it until your death, at which point it would pass automatically to your heirs without having to have your estate probated. An attorney could help you set this up. If you go this route, your will could remain the same as the transfer would happen before your death so if the minerals are mentioned in your will they would simply be ignored as they will have already been transferred.

No matter how you get it to them (via your will or by deeding them over prior to your death) your daughters will need to notify the oil company that they are the owners if the property is producing any income. The company will have no way of knowing of your death otherwise.

Note that I'm not an attorney so I'd suggest discussing all this with an attorney prior to making any decisions.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Royalty Payments without a Lease? Asked 05/18/2013
Q: I own 100% of surface and 50% of minerals on a 100-acre parcel in Oklahoma. Recently I declined the opportunity to sign an OGL, but have discovered that the owner of the other 50% minerals (an out-of-state resident) was contacted and signed up. Now that I\'m no longer being courted by the oil company, I\'m curious how to ensure that in the event of production it is not forgotten that I own half of the minerals here. What course would you recommend?
A: If you own 50% of the minerals under the oil companies drilling and spacing unit you will be paid your proportionate share of royalty should they drill a producing well. They will likely not "forget" you.

Before they drill a well they will probably contact you again to lease, and if you do not lease they may apply to the state for permission to "force-pool" you into their drilling and spacing unit.

Force Pooling is similar to a lease in that you will be given several choices of bonus and royalty; the difference being that if you do not make a choice a choice will be made for you, which is called the "default" option on the pooling order (usually a 1/8 royalty and cash bonus.) So, even if you are force pooled, you will still be paid and receive royalty, though perhaps not on terms as good as you could have negotiated on your own had you chosen to lease instead.

Mick at the Mineral Hub. CMM, RPL
Lease offer for inherited mineral rights... Asked 05/17/2013
Q: I was recently contacted by an oil co with a lease offer for the mineral rights to land I may be heir to in Pontotoc county. My mother passed away in 1993 and I only vaguely remember anything about this property. I believe it was divided up between she and her siblings when inherited from my grandmother. Her second husband is since deceased. Does this make me the natural heir? Is there a way to find out without incurring the cost of an attorney?
A: To determine who gets what (whether your mother had a will or not) you need to have her estate probated in Oklahoma if it has not been done already (sounds like it hasn't been.) Only then, after a court (through the probate process) declares who owns what will it actually be settled. Until then, your mother's estate is technically the owner of all she had at her death.

Though a company may LEASE you without probating your mother's estate, they will likely NOT pay you on any production that comes in later UNTIL you get her estate probated or do a 'quiet title' suit IN Oklahoma.

Either of these is best done by an attorney, though there's no law that says you can't do it yourself. I wouldn't try to do it yourself. If the property is worth much it would be worth it to use some of the bonus money to get the minerals in your name officially, which will require a probate unless one has been done already in Oklahoma.

Mick at the Mineral Hub
Offer to purchase received. How to find location? Asked 05/17/2013
Q: I have property in Morgan Co. West Va. Are there maps or something that show what minerals are on your property? We were contacted by companies to buy the mineral rights and I want to know what they are looking for. How can I find out what minerals are on my property?
A: Checking the county clerk's office in the Morgan County would be a good start, as all land records related to your property would be on file there. You can probably do a search by name at the clerk's office, but in order to do a search by location you might need to visit with a local abstract office. Another option of course, and probably the simplest, would be to just ask the company who offered to buy them. If they won't tell you where they are and how many acres are involved or whether they are producing or not I would be wary of dealing with them frankly.

Keep in mind that when you receive an offer out of the blue to purchase, it likely means there is "something going on" in the area where your minerals are located, such as a new well coming in nearby etc. Best to find out exactly what's going on prior to agreeing to a sale price. Some buyers will take advantage of the lack of knowledge of a mineral owner. Most don't, but still best to be cautious when dealing with unsolicited offers.

Mick at Mineral Hub
Land rights Asked 05/15/2013
Q: My dad left me 25 areas in pa, but he said I don\'t own the underground.if I find out who owns it and they want to drill do I get a percent of royaly\'s. I don\'t know who owns the mineral rights, not sure how to find out. Maybe, i can buy the mineral rights? Can you help me?
A: The County Clerk's office is where you would look to find out who owns the mineral rights currently. Unless you own them, you will not get a percentage of the royalty from any wells that are drilled.

Frederick M. "Mick" Scott CMM, RPL
Bonus amount for Dewey County Oklahoma Asked 05/14/2013
Q: I have had a lease offer for Sec.22 19N 16W of $200 an acre 3/16 royalty in Dewey County Oklahoma. It seems low compared to other sections. What is the going rate for that section?
A: Since lease bonus information is not public information it's a little difficult to tell. If more people would share their lease offers with us (as you are) when asking questions that would help others get a feel for what's being offered in certain areas, and since we don't publish names etc. here unless requested it's an anonymous way to help others. Go team Mineral Owner ha ha!

To answer your question though, I was unable to find any similar lease offers or forced-pooling bonus amounts (often indicative of lease offers) nearby so I would say that since I've seen no leases filed in this section by anyone yet that $200/acre probably IS the (current) going rate.

Frederick M. "Mick" Scott CMM, RPL
Can I lease minerals I own if IRS has filed tax lien? Asked 05/13/2013
Q: My sister & I inherit almost 29 acres on land with mineral rights. We are mineral right owners in a parish in Louisiana which is designated for lease agreements.How will a personal tax lien on one of two mineral gas/oil mineral rights owners affect the lease agreement if a subination agreement is signed? Can a portion of the lease be designated to pay on the taxlien or does the entire payment?
A: If the lessee determines there is in fact a tax lien against one owner's minerals in said Parish, then I doubt they would lease that owner until the lien is paid off and a release is filed. If they don't think the lien is relevant then they'll likely go ahead and lease both owners.

I doubt you can get the IRS to execute a Subordination of Lien so you could lease the affected minerals without first paying off the lien, but if you can get them too then that would be great of course. You could show the subordination document to the lessee and then they'd be able to lease the affected owner without worrying about the lien.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub

Thought for the day:
English is a very forgiving language...
Should I sign new division orders? Asked 05/13/2013
Q: Hello, I own some minerals in Wheeler County, Texas, where 9 Horizontal wells have been drilled, and are producing wonderfully...Ive been getting great money, and all division orders are signed. However, after over a year, I have recieved a set of division orders for three of the wells, and they are listed as ENTBPO. What does this mean? Should I sign these? Thanks for your time.
A: Likely the purchaser of either the oil or gas has changed and this is the new purchaser asking you to sign their division orders. I would go ahead and sign them as long as nothing is included that attempts to change the terms of your lease agreement.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Love County OK Asked 05/10/2013
Q: Is the price of natural gas likely to climb high enough in the next two years to warrant drilling in the Love County area?
A: I would say probably not, unless something happens in the Middle East that actually lasts more than a couple of weeks. Even though we don't get our natural gas from over there, any perceived disruption in the supply of oil out of the Middle East would also affect natural gas prices in this country if the disruption were long enough.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Flood destroyed County Clerk Records in Alabama Asked 05/10/2013
Q: A few years back the courthouse in Birmingham Alabama had a basement flood that destroyed the records of mineral rights we owned on property in Clay county. Can you suggest any other ways of finding copies as we have spent days at the courthouse going through records. Thanks.
A: I would check with local land companies or lease brokers who may have made lease offers to you in the past. They likely did a title search and may have made copies of the documents related to your ownership.

I'd also check with the local abstract office as they often will have copies of most all the land records. Abstract offices are commonly located across the street or very close to courthouses.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
How do I know if I've been "force-pooled"? Asked 05/05/2013
Q: How do I know if my portion of mineral rights in Oklahoma has been forced pooled? Is there a Website that lists them as they are approved by the state?\n\nThanks so much!
A: The Oklahoma Corporation Commission (the regulatory body for oil and gas in Oklahoma) has a wealth of information available online relating to oil and gas activity and production in Oklahoma. You can look up such things as drilling permits, recent production information, well completion reports, forced-pooling orders, and anything else that falls under their jurisdiction.

You also likely received a copy of their pooling application, if they did actually apply to do so. You can call the attorney listed on the application and ask him/her whether an order has been issued.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Am I Under Contract? Asked 05/05/2013
Q: I received a contract from an Oklahoma Landman. I signed and returned the contract, but was then told that I need a marketable deed before I can be paid for the lease. Since the Landman still has my signed contact, am I technically \"under contract\", even though they haven\'t paid me for it? If the answer is yes, how do I dissolve the contact while I get my papers and deed in order? I might need to go through Probate Court, which will take some time.\nThank you in advance!
A: Once the lease leaves your mailbox you are "under contract" with a lessee in Oklahoma, though they may not pay you until you can show that you have marketable title. Some lessees will pay the bonus even on inherited minerals that have not been probated yet, but others won't. You'd need to check with them to see if they're planning to wait until you probate the estate to pay you.

You could tell them you don't plan to probate the estate right now and to please return your lease to you if they are not going to pay for it without a probate being done. They may go ahead and pay you at that point, but if a producing well is ever drilled you'll need to get the estate probated before you will begin receiving royalty payments so probably best to get it done at some point.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Mineral Rights value? Asked 05/03/2013
Q: I own the mineral rights for Section 35 Township 6S Range 1W in Love County OK. I recently have received 4 offers to purchase my mineral rights. What is the current value if I decide to sell? Do you know of any plans in the future to drill in that area?
A: While we can only do in-depth evaluations for clients who are selling their mineral rights through our site due to the considerable time and effort required for a proper evaluation; I can direct you to our FAQ page dealing with this subject, which will enable you to estimate their value on your own fairly accurately.

Simply put, the more "active" your area is with drilling and leasing, the more mineral rights in your area will be worth.

For information on what's going on in your area, you can visit the Oklahoma Corporation Commission's website. There you will have access to drilling permits, production from current wells, and can also estimate leasing bonus amounts being paid (by looking at forced-pooling orders...which are often indicative of what's being paid for leases in the same area.)

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Do surface owners receive oil and gas royalty? Asked 05/02/2013
Q: If the owner of the mineral rights discovers and extracts oil does the land surface owner receive any royalties.
A: No, only the mineral owner will receive royalties.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Oil Production Per Day Asked 05/02/2013
Q: On this listing it says adjacent section produced 15,000 barrels of oil in 2012. Is that all it made for a 12 month period? Thats terrible if it is...means just a measley 42 barrells a day? Is this correct? Thanks\n\nDavid
A: 15,000 BO in 2012 would work out to about 42 BOPD, yes.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
If I didn't buy the minerals can I still receive royalty? Asked 05/02/2013
Q: I purchased property that has mineral rights that the previous owner chose not to sell to me. Am I or will I ever be entitled to the royalties of these rights? What are my rights as the current owner?
A: You will not be paid royalty or lease bonus for mineral rights that you do not own. You could offer to purchase them from the current owner if you wished, and upon owning them you would receive the benefits of ownership.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Verify interest in new Ellis County, OK well? Asked 05/02/2013
Q: Hi,\n\nI\'m trying to verify that my father had mineral rights on property described as S34 T19N R26W in Ellis County, OK.\nWe\'ve had correspondence with Chesapeake concerning a well that was completed on this property in Sept 2012. They were trying to execute a division order for my dad, who is deceased. All appropriate probate, etc. documents were filed for him in Ellis County in 2007. But they are now pretending they can\'t find any information about the division order. We are not aware of this property, but my grandfather excuted lots of oil & gas orders for many years in both Texas and Oklahoma.\n\nThanks for your assistance.\nJudy
A: If you own it as per your father's probate then Chesapeake will likely send you another division order to sign at some point. Interest will accrue at a rate of 12% per year for any royalty payments they are holding that are more than six months past due per state statute.

There has been a well on this property (The "Bayless 1-34") since at least 2000 that is currently operated by Wheeler Energy Company, though Chesapeake has apparently drilled another one recently, which is likely why you received a division order from them.

The previous well operated by Wheeler Energy is a very small gas well so doubt you are getting checks from them each month, but I'd still try to contact them to see if they have you or your father "in pay" in their books.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Drilling in Carter County, OK? Asked 05/01/2013
Q: Just saw your reply to a question dated 1/16/2013. We a small percentage in property at the below location. It was leased over the past years, but that expired last December. Not sure if the landsman that was coordinating is still in business with all the North Dakota drilling. Wonder if any drilling is on the charts for the area of our property?\n\nIf this is going to post, would you please remove my email address and last name? Thanks in anticipation. 1-T5S-R1W\nCarter County, Oklahoma\n
A: The closest drilling permit activity to you is several miles to the east and south of you, with most in the county being about six miles SW.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Mineral Rights Value in Garfield County, OK? Asked 04/26/2013
Q: What are mineral rights worth on southeast quarter of section nine, township twenty-three, north, range four W.I.M., Garfield County, Oklahoma t
A: The best way for you to determine value is to look at the area in question and see how "busy" it is. The more activity, the better. If they're in the middle of nowhere then you can't expect they'd be worth much.

While we can only do in-depth evaluations for clients who are selling their mineral rights through our site due to the considerable time and effort required for a proper evaluation; I can direct you to our FAQ page dealing with this subject, which will enable you to estimate their value on your own fairly accurately.

Simply put, the more "active" your area is with drilling and leasing, the more mineral rights in your area will be worth.

For information on what's going on in your area, you can visit the Oklahoma Corporation Commission's website. There you will have access to drilling permits, production from current wells, and can also estimate leasing bonus amounts being paid (by looking at forced-pooling orders...which are often indicative of what's being paid for leases in the same area.)

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Who owns the mineral rights? Asked 04/25/2013
Q: I have minerals in Hughes County Ok which I inherited from my husband, who got it from his Grandmother thru his mother. Yale oil has a well & we\'ve been getting approx. $35.00 a yr, but have to pay taxes on this property. was told several owners are involved in this parcel I would like to know how I can find out who they are since Hughes dept of taxation said we own it but an attorney said no someone has to file in probate. Thank you for your help\nNancy Alexander
A: Oklahoma does not tax mineral rights, but does tax income such as bonus and royalty, at regular income tax rates. If your husband's estate was not probated in Oklahoma then you should probably get that done because until you do any mineral rights he owned at his death are technically owned by his estate, rather than his heirs. The same would be true for anyone he inherited them from.

Frederick M. "Mick" Scott
Manager, The Mineral Hub
How to convey mineral rights without an attorney? Asked 04/24/2013
Q: I am wanting to convey my mineral rights to a relative. How can I do this myself without having to pay an attorney to do this for me.
A: You can probably find a mineral deed form online to use as a model, but I would suggest using an attorney anyway to make sure it's done right. Shouldn't be too expensive, maybe $200 or less, for an attorney to draft a deed and file it of record for you after it's executed. If you're not sure what is owned and you just want to convey "all" your interest, then you could use a "quit-claim" deed, which basically just says that whatever you own under the described land, if anything, goes to your relative. A quit-claim deed does not include a warranty clause, so you wouldn't be promising that you actually own anything, but anything you did own would be conveyed.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Do I need a mineral manager? Asked 04/18/2013
Q: How important is it to hire a minerals manager and how much is the \"going rate\" for such person?
A: It's "important" if you don't want to deal with the paperwork and hassle of managing your minerals yourself, though some people prefer to do it themselves. It's also "important" if your minerals are in a very active area with lots of leasing and drilling going on. There's a lot of money to potentially be lost in these areas if you don't know what you're doing and allow lessees or buyers to "lowball" you on price or if you sign a bad lease with someone.

Going rate? It depends on the manager. Some may charge a percentage of any royalties you get, while others may charge a flat monthly fee, or a percentage of any lease bonuses they arrange for you. Others may do a combination of all three above methods.

If hiring an individual I would get someone with credentials if you want it done right. Someone with a CMM, RPL, or CPL designation would be qualified in my opinion. There are also companies out there who make it their business to manage mineral rights for people. Jeroco, Inc. in Chickasha, OK would be one I'd recommend.
Did we miss our opportunity to lease? Asked 04/14/2013
Q: Last year a land management company in TX got in touch with the heirs to the oil and mineral rights and leases were sent out, checks distributed; however, my mother died in FL and we were advised by a TX attorney not to sign the lease until her estate was probated in TX. This took nearly 6 months, as the attorney had health problems and honestly did not work on a timely basis for us. When the legal papers were finally filed, placing the rights in the family trust in FL, the land management told us the client was no longer interested and was withdrawing his offer. There was money 6 months prior and there was a check to be sent to us once the lease was signed, but not now. How can that be? All others (owners) received their checks. How do we get our lease money that was due to us at the time the attorney advised us not to sign the lease? Any input on this would be appreciated so we know where to proceed next.
A: Bonnie, first of all, I disagree with the attorney. If they were willing to lease you without the probate being done I would have gone ahead and leased. Many companies will lease from heirs without a probate being done in the state where the minerals are located.

Where the probate comes in handy is if a producing well is actually drilled as a result. Most if not all companies that are willing to lease you initially will require the probate be done once the well starts producing before they will pay you royalty. Until the probate is done they will put your royalty in a "suspense account" and hold it there until you provide them "proof" (i.e. the Final Decree or Order) showing that they have been transferred to you "officially" by a court.

As for getting your lease money now, that's not going to happen. If you didn't sign a lease, they obviously aren't going to pay you a bonus. They gave you the chance to lease but you did not. You cannot "make" them lease you because technically once you refuse an offer the original offer can be withdrawn.

Now that you have the probate done it will help you in the future though, so I think it was worth doing. If you decide to sell these in the future the probate will also come in handy for that as most buyers will not buy without you having "clear and marketable title" to the mineral rights (which the probate accomplished.)

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
New Well Production Amounts? Asked 04/10/2013
Q: what\'s best way to follow production of a new well in our section 21 logan county, OK ? also, any way to estimate production rates after the initial rate has \"settled down\" or stabilized?? thanks, g. brown
A: The Oklahoma Corporation Commission (the regulatory body for oil and gas in Oklahoma) has a wealth of information available online relating to oil and gas activity and production in Oklahoma. You can look up such things as drilling permits, recent production information, well completion reports, forced-pooling orders, and anything else that falls under their jurisdiction.

Once the operator starts reporting production, it will appear on the OCC website above. Until then, you might just call the operator and see if they'll send you a spreadsheet showing production from day one until now.

Most wells will decline by at least 50% during the first year, and more slowly after that. This is especially true for gas wells.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
www.mineralhub.com
The Mineral Hub

Historic mineral rights value for tax basis? Asked 04/08/2013
Q: My mother sold her mineral rights last year in Hemphill County, TX which she inherited from my grandmother in 1984. My great grandfather obtained these mineral rights with the surface rights (long since sold) in the 1930\'s.\nWhat was the fair market value of the mineral rights in 1984? \n My accountant needs this value in order to establish a taxation basis for her capital gain.\nPlease email ... your help is greatly appreciated by Mom!
A: Your accountant will perhaps have to hire an appraiser or just use IRS methods to determine their value in 1984. I have no guess for a 1984 valuation off the top of my head, sorry.

You could perhaps try contacting the person who bought these from your mother. Perhaps they are more familiar with prices in this area in 1984 than I. My assumption would be that mineral rights would have been worth much less back then, since there wasn't any horizontal drilling in Hemphill County in the 1980's. Additionally, by 1984 oil and gas prices were both much lower than they had been just several years earlier.

Frederick M. Scott CMM, RPL
The Mineral Hub
Lease offer withdrawn. Why? Asked 04/07/2013
Q: my grandfather owned mineral rights on some land in west texas, when he died he did not have a will. when my grandmother died she did not know about the mineral rights and she left her estate, not the same piece of land the mineral rights are on, to my aunt. in the will it states any property not meantioned in this will, will be distibuted to my heirs. we have been in contact with the oil company for 8 months, they had us fill out a w-9, sign a ratification and we have recieved one check they said to get the w-9 started and another they called a bonus check...then they call to say ooops, i am sorry you do not have mineral rights...what is happening?
A: They apparently checked the title and determined you did not own anything after all. If you can prove to them you do own something then I'm sure they'd be happy to lease you after all. It's not uncommon for a company to do only a cursory check of title prior to sending out lease offers to people.

Before they pay the bonus they will do a more thorough title check and if it's determined at that time that they were mistaken in their original findings, they will make adjustments at that time. In your case it seems they determined you didn't own anything after all. You can always call them and ask WHY that is, and how they came to that conclusion. If you ask them nicely they may be willing to share their title work information with you so you can be better informed on your property.

Frederick M. "MIck" Scott CMM, RPL
The Mineral Hub
Worth of mineral rights in NY? Asked 04/07/2013
Q: The family farm is going to be sold and the family wants to keep the mineral rights.The farm is located in central New York in Cortland County.We have a price on the farm but we don\'t know what is a reasonable price to put on the mineral rights to keep them? Can you please help.\n\n Thank You,\n\nBrian Young \n
A: Good luck getting anything for your mineral rights in New York as long as many local communities keep their drilling moratoriums in place. Once they accept "fracking" like most of the rest of the country maybe drilling can resume and people like you will have some value returned to their mineral rights. Until then, and assuming you are even in a geologically friendly area for oil and gas production, I think you're looking at a couple-hundred bucks per acre tops, assuming they aren't already producing. If you already have a well, then I'd multiply the average of your last six month's production income by between 36 and 60 and use that as an estimate as to their worth.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
How much are my minerals worth? Asked 04/05/2013
Q: I have mineral rights (1/8) on 520 acre tract in montcomery co. texas. Could you give me an estimate of what they would be worth be per acre per acre if I sold them. A ball park figure would be ok.
A: The best way to estimate the value of your mineral rights is to use the same methods buyers use. Some of the methods they use can be found on THIS page of our site. To answer questions like this specifically though you'll need a legal description so you can locate them and compare the activity there with other activity in the area. In general, the closer you are to current drilling/leasing activity, the more valuable your mineral rights will be.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
What's my share of royalty? Asked 04/05/2013
Q: if the royality is 1/16 of a million dollars and my part is 1/288 how much money would it be worth?
A: $217, assuming your part of the 1/16 of a million ($62,500) is 1/288, because $62,500 divided by 288 is $217.

If instead you are due `1/288 of the full million, then it would be $3472.22 ($1,000,000 divided by 288 = $347.22.)

Sounds to me like it's the first one since you said "the royalty" is 1/16 of a million" and 288 people are sharing that 1/16.

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Who owns the mineral rights? Asked 04/05/2013
Q: ok if my grandmother left her estate to my uncle, but there is a paragraph in the will that states that any property not mentioned in the will, will be distributed evenly among the heirs, does that mean he gets the mineral rights that our family owns on another piece of land or does that mean all the children share the rights? my mother passed, so would her shares go to me and my brothers?
A: If your family currently owns the mineral rights on the other piece of land, then no, the uncle wouldn't get them. How could he if you own them already? The paragraph you reference in your grandmother's will applies only to property SHE owned at her death, and if HER minerals were not mentioned in her will then it sounds like any SHE owned would be "distributed evenly amount the heirs" as you surmised.

Your mother's share of your grandmother's minerals, if any, will go to whomever her will says they go to, or if no will, then whoever the State (by intestacy laws) says they go to.

Frederick M. "Mick" Scott
The Mineral Hub
How do you go about transferring inherited mineral rights? Asked 04/02/2013
Q: My Father who passed away, had several mineral rights that were left to him by his Mother. The problem now is, they were only in his name. He did have a will that stated that everything was to go to my mother after he died. Unfortunately, he did not put my Mothers name on any of the mineral rights. She is 80 years old, so it is crucial that we get these minerals in her name. We know where the sections are. My question is, how do we go about transferring them into her name. We are in California, and the minerals are in Logan County, Ok. My other question is, what would be the cost, (ball park ) to have someone in Oklahoma do this for us? Thank you
A: You need to get his will probated in Oklahoma before your mother can have title to them legally, and the will would probably need to have a "residual clause" if the minerals were not specifically mentioned in the will. You'll need an attorney licensed to practice i Oklahoma in order to probate the will here. Should cost no more than $3000 to probate the will, assuming the estate is not unduly complicated.

Frederick M. Scott
The Mineral Hub
Lease offer in Pontotoc County, OK Asked 04/01/2013
Q: Hello,\n\nMy mother in law received an offer today from Crown Energy to lease her 10 acres for 3 years in Oklahoma Pontotoc County, with two options: $150/acre with 1/8 royalty, or $100/acre with 3/16 royalty. She asked my advice and I have no experience with this whatsoever. Is this offer even negotiable?\n\nThanks...
A: You must provide us a legal description before I can answer this. Lease prices can vary widely within a county.

Mineral Hub
What is a "no deductions" clause? Asked 03/27/2013
Q: What is a \" no deductions\" clause and should it be part of my lease? I have an offer to lease that I need to reply to asap.\nThank you.
A: Ostensibly, a no-deductions clause is supposed to prevent your lessee from deducting from your royalty the costs they incur in getting your share of the gas they've produced to market. If enough of their lessors insist on a strict "no-deductions" clause, this may discourage them from working hard to find the best market they can, since they will be required to pay not only for transporting (which often means they must first dehydrate and compress the gas) THEIR share of the gas to a better market, but YOUR share as well.

In order to reach better markets than those available at the wellhead, smaller lessees must often buy space on gathering systems which require gas to be dehydrated and compressed before being allowed on. Rather than paying to move the gas downstream to a better market, these smaller lessees will be more inclined to sell to someone closer to the well if enough of their lessors insist on no-deductions clause in their leases. This is because these wellhead purchasers will take care of any dehydration or compression needed to get the gas into the bigger major-market pipelines but of course will offer your lessee (and thus you) a lower price in return.

You need a no-deductions clause in your lease if you hope to avoid paying any of these charges for your share of the gas your lessee produces. I usually try to include a no-deductions clause in my leases, but relax it somewhat to allow such deductions as mentioned above, if (and only if) doing so results in me getting a higher price (even after deductions) than I would have if my lessee sold to a wellhead purchaser for a lower price, such as one who had their own gathering system and compression.

Confused yet? Well I sure was at first too. Gas marketing is complicated because there are many variables (including more that aren't mentioned here) as to what's purchased by whom, and who does what to the gas before it reaches its final "end user." Lots of room for mischief by oil companies, especially those vertically-integrated ones who sell to their affiliated purchasers who own gathering systems. Because of this potential for "sweetheart deals" among affiliated companies I usually do include SOME form of a no-deductions clause in my lease and will often change it slightly from one lessee to the next, depending on how confident I am that they have my best interests in mind as well as theirs when selling my gas for me.

By the way, oil sales are not nearly as complicated as gas because oil is usually picked up "as is" by a truck and is taken directly to the purchaser without the need for much "improvement" other than what is done on the lease in separators etc.; so with oil all you should be paying in most cases is your share of the transportation costs to market, and as long as they are "reasonable" and the lessee tries to get the best price they can for themselves AND me, then I think that's one deduction I can live with.

Frederick M. "Mick" Scott CMM, RPL
How do I find out for sure if I own mineral rights? Asked 03/26/2013
Q: How do you know if you have mineral rights if your\nDeed does not address it? The Alabama deed was\nissued in 1944.
A: To know for sure whether you have mineral rights or not, you'll need to have someone search the records at the county clerk's office in the county where the mineral rights are located. All records pertaining to the property over the years should be filed there.

This process is well-explained on the Mineral Hub's Mineral Right's Info page. I'm surprised you didn't look there first before asking this question.

If the previous owner owned the mineral rights in Alabama, and didn't specifically reserve them on the 1944 deed, and the deed wasn't for "surface only" or something, then the grantee on that deed likely got the minerals as well as the land.

Hope this helps you out.
Frederick M. "Mick" Scott
Is a 2-year option standard on OGL? Asked 03/26/2013
Q: Is it standard procedure when leasing for the company to add a 2 year option into the contract on a 3 year lease?\nI have leased before but do not recall having this part of the contract.
A: It's becoming more common, but I always try to avoid extension options unless they're willing to pay more for them (i.e. double the original bonus.)

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Can I lease to two companies at once? Asked 03/16/2013
Q: In the state of Oklahoma can I lease with another oil and gas company, if my current oil and gas lease agreement does not mention that I cannot lease with other companies on the contract..
A: One lease at a time. When the current lease expires you can lease with another company, but you can't have two leases for the same property going at once.

Frederick M. "Mick" Scott
The Mineral Hub
Where are these mineral rights located? Asked 03/15/2013
Q: Hello Mick! I am so lost regarding mineral rights. My mom found a court document dated back in 1981. It is an \"estate\" document in which my mother was left 1/4 of her aunts oil rights in Santa Maria, Ca . (about 187 acres) The document does not have parcel numbers, just a description (lots of numbers) where this property is located. supposedly, the property is along the the riverbed of Ranch Guadalupe/Santa Maria. How do I find out who has been utilizing this property for the past 32 years if a 1/4 of the oil rights were left to my mom?\nWe are so lost and confused on what to do. I called the cty ass. office and they informed me since there are no parcel numbers, I needto find a \"successor thru interest\" (whatever that means) Thank you for your much appreciated attention regarding this matter! \nSincerely,\nHillary
A: Email me the document and I'll see if I can locate where the property is. You could also just show it to your attorney and they could probably figure it out as well.

California uses "Section, Township, and Range" in areas that are not located within a city so that may be the "numbers" you were referring to. Assuming I could locate them, I could then look up to see if there's been any activity there since 1981.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Producing well, but no royalty payments yet? Asked 03/12/2013
Q: My father passes away recently he owned mineral rights in the barnett shale. A well has been drilled and put into production it has produced for 9 months. My sister and i should be co owners of mineral intersts 50/50. I have received no information or psyments i contacted railroad commission
A: I would contact the operator of the well. In most states they have at least six months to begin paying out on a new well, but often they are late, in which case interest may be due you on any late payments. Interest varies by state. You'd also want to make sure your father signed a lease. If he did not, then he could have been left out of the unit and therefore would be due no royalty.

Hope this helps.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Does the state of New York own mineral rights? Asked 03/11/2013
Q: I am looking for general mineral right ownership for New York State. I am doing a college GIS project on gas well locations and I need to know what locations in the state the mineral rights are privately owned or state owned to determine possible well locations. If you have any suggestions of where to look it would be helpful. Thanks
A: You can visit the county recorder or county clerk's office in the county you are interested in. There you will find land records showing who owns the mineral rights. You can search be legal description (i.e. section, township, and range) to narrow it down to a specific part of the county.

Most states have "school land" mineral rights in certain sections of each township that are owned by the state. I expect New York is similar to most, but that would be some homework for you to do as I'm not sure about that.

Lease expired. Should I contact them to renew? Asked 03/06/2013
Q: Hi, I signed a 5 yr lease with an oil company 5yrs ago and the lease was up in October 2012. I was wondering if I should contact the company to see if they want to renew the lease. Also how do I know where they are drilling. The co-ordinates are 08N-11W-19 and NE/4. I can\'t seem to find any information on that section. I\'m not sure what my next step is, I would appreciate it if you could advise me. \n\nThank you.
A: If you weren't contacted for another lease then it's likely they weren't interested in leasing you again. This happens. I noticed that Chesapeake did a lot of leasing here in 2012 so you might contact them and see if they are interested. When you call just tell them you are a mineral owner who noticed they were leasing your section in Caddo County, OK last year and they will direct you to the right person to speak with about it.

I checked, and there has been no drilling in that section yet.

Hope this helps.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Oil & Gas Mineral Rights Asked 03/03/2013
Q: If my husband passes away with out leaving a will do all his mineral rights in Oklahoma belong to me? We just leased a little over 600 acres and he had the cash come in my name and we both signed the lease as husband and wife. He owns other mineral rights besides this one which we are currently receiving royalty checks for. If he makes a will can he simply put \"I leave all my mineral rights I own to my wife\" in his will or does he have to specify the areas which he owns?
A: He can include a "residual clause" in his will that would cover anything not specifically mentioned.

The Mineral Hub
Selling Mineral Rights Asked 02/28/2013
Q: I\'m considering selling my mineral rights, haynesville shale, san augustine, tx. I\'m leased to chesapeake. There is currently a producing gas well for which I receive monthly royalties. How much is reasonable to expect per acre?
A: Post them on the Mineral Hub and find out. The "market" is really what will decide what these are worth to buyers, and by posting them on this site they'll be seen by a LOT of potential buyers, which is obviously the best way to determine their value.

That said, you can estimate their value using the same methods buyers will use. You can find out more about those methods How Much Are My Mineral Rights Worth article in the FAQ pages of this site.

Hope this helps you out.
Frederick M. Scott
The Mineral Hub
Cleveland County, OK lease / Liability? Asked 02/27/2013
Q: My family is the lessor of 14 net acreas in Section 22, Township 7N, Range 1W, containing 79 acreas more or less. We\'ve been offered $125 per mineral acre \"bonus consideration\", 3 yr. lease, 3/16th royalty. In addition, the offer includes an option to extend an additional 2 yrs for $100 per acre \"if option is exercised\". How can I determine if this is a far price/offer? \nAlso, there\'s a clause that states \"Lessor hereby warrants and agrees to defend the title to the land herein described, and to indemnify lessee of all adverse claims thereto, and all expenses incurred by Lessee......,\" Does this leave us liable for claims against the Lessee regarding this particular lease or is this a standard clause? Thank you.
A: O'Brien Resources is the only company filing leases recently in your section recently, so i doubt they have much competition thus you're probably not going to do much better than $125/acre.

I would not agree to the extension though, unless they offer twice ($250/acre) what they are offering for the first three years. I don't like extension clauses that offer the same bonus as the original term. In this case they are basically just offering you $125/acre for a (potential) 5-year lease. Not good, as prices could go up significantly over the next five years and you don't want to be "stuck" at only $125/acre after three years if prices have gone up significantly by then.

The warranty clause has to do with your title. If you're not sure you own these then I would "limit" the warranty to "by, through, and under lessor, but not otherwise") They'll know what that means and can change their clause to reflect that. Basically it just means that you are promising/warranting that you haven't done anything to screw up or encumber your title since YOU inherited/bought them, but are not promising the title is good for any time prior to your ownership. If they'll let you strike the warranty clause entirely I'd do that though, for simplicity.

Most lessees will let you strike the warranty clause. If they don't, then I sometimes tell them that if they don't believe I own it (if they had checked title already and knew I owned it, they wouldn't need the warranty clause) then go lease from the people they think DO own it. In most cases they'll come back and lease me without the warranty clause.

By the way, sorry for the substantial delay in answering this question. It gets busy around here sometimes!

Sincerely,

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Do mineral rights go to the landowner if mineral owner dies? Asked 02/27/2013
Q: If all the other owners of the mineral rights are deceased, do the minerals all go back to the landowner?
A: In most states the answer would be no, they would go to the estate of the deceased. North Dakota and Louisiana are two exceptions I can think of.

The Mineral Hub
How can I find where my family owned minerals in the 1930's? Asked 02/26/2013
Q: How can I find out location of mineral rights property owned by our family from the 1930s?
A: If you know the county, you can search the records of the County Clerk in the county where the mineral rights are located. You'd want to search by name since you don't have a legal description. You could also go to the local abstract office in the county and search their records as well for names, though that wouldn't be free.

The Mineral Hub
Do MIneral rights have to be specified in a will? Asked 02/20/2013
Q: On my great grandfathers estate is currently being leased. The landman has presented us with an agreement to start drilling. However now they are saying my grandmother had a will that was probated. And in that will she left all properties and assests to my uncle. My great grandfather didn\'t have a will and my grandmother never specified Mineral rights in her will. Do we have a valid argument to hire an attorney to fight this?
A: I don't think "fight" is the operative word here. "Research" might be a better word, as in research your great-grandfather's potential heirs and the intestacy (died without a will) laws in the state where the minerals are located to see if your grandmother was entitled to them by state law when he died without a will.

You would then also want to check your grandmother's will for a "residua" clause, which is a statement that covers anything (i.e. mineral rights) not specifically mentioned in her will. It's likely that her will had such a clause. Most do. If you can't find her will, then since her estate was probated, there's probably a "Final Order/Decree" on file in the county clerk's or court clerk's office. It would show who got what, and also probably has a residual clause.

Sounds like the oil company wants to make sure you own these before they will agree to pay you for any production that might occur. That's reasonable, similar to that you'd want someone to have marketable title to a car you were buying before paying for it, yes? Seems like in their opinion your uncle owns these now, hence your need to research the above if you wish to "fight" this conclusion.

If your grandmother gave "all properties" to your uncle in her will, and her estate was probated, then it's likely he owns the minerals she had. Since she was the daughter of your great-grandfather, then even without a will either she and any other kids and/or or his wife would have received everything he had, including the minerals, so it's likely she did inherit them from your great-grandfather and so could of course have willed them to your uncle in her will.

In fact it's fairly common for property (mineral rights or other property) to be inadvertently left out of a will. That is what the "residual clause" is for.

Hope this helps you out.
Frederick M. Scott CMM, RPL
The Mineral Hub
Were mineral rights included in my land purchase? Asked 02/20/2013
Q: I purchased a property last July in Texas. There wasn\'t an addendum in sale contract that owners were keeping mineral rights to property. Does that mean I own mineral rights?
A: If they owned the mineral rights at the time of the sale to you, and didn't specifically reserve them in the deed or the deed didn't read "surface only" etc., then I'd say it's safe to say you now own the mineral rights.

Hope this helps you out!
Frederick M. Scott
The Mineral Hub
Why no contact from lessee about lease activity? Asked 02/18/2013
Q: My family has mineral right and an oil lease in Pottsborro . Its been some time since the company has contacted us or vise versa. Ive done a search for the company that we were dealing with, but all I have is a po box number in tulsa and nothing on the web. C.H. Nicholson was the company that had there lease. Whats my next move? many thanks
A: Is there a producing well? If not, then the lease probably just expired and that's why they haven't contacted you. No need to. If there's a producing well there you could probably find out online assuming you have the legal description. If you find there is one, then you should also be able to pull up the completion report and be able to look and see who's operating the well currently. It might not be the company you leased to.

The Texas Railroad Commission has a wealth of well information available online concerning oil and gas activity. You can look up such things as drilling permits, production information and completion reports.

Hope this helps you out.
Frederick M. Scott CMM, RPL
The Mineral Hub
Lease in effect after foreclosure? Asked 02/15/2013
Q: I purchased a property in Texas where a lease existed prior to my purchase. The original owner had a mortgage before she leased for gas. Neither document mentions the other or any subordination, etc. The bank foreclosed by sheriffs sale and property went to Fannie Mae whom I later purchased the home from. I contacted the lessee and sent copies of the deeds to show my ownership. 4 months later I received a division order. I was pretty certain I got the mineral rights when I bought it and apparently the lessee agrees. My concern is that I have read different discussions online and they are conflicting about whether or not the original lease was extinguished during the foreclosure process. Am I bound to the terms of the existing lease or can I request a new lease? The lessee is a major US gas producer and I am not signing my division order until several issues are clarified. Thank you
A: In most states you don't have to sign a division order in order to be paid. Texas is one exception, but even there they are revocable by either party after being signed. I believe 30 days notice is required.

I think in the scenario you described you probably got the mineral rights as well when you purchased the property, since the previous owner apparently had leased them prior to being foreclosed on and so apparently owned some mineral rights. You owning them now assumes she didn't sell them prior to being foreclosed on though (which as you surmised would be difficult without a subordination agreement from the bank.) If she did sell them (unlikely without a subordination agreement from bank) then it would be on file at the county clerk's office.

Once the bank sold the property to Fannie Mae, any rights they had to the lease/minerals ceased, and became yours once you bought the property. This of course assumes they didn't reserve the mineral rights when they sold to Fannie Mae (also unlikely. A productive lease follows the mineral owner in most cases though.

As to the division order, seems like you already know this, but I'd check before signing that it doesn't attempt to change any important terms of the lease (especially regarding deductions from royalty payments.) Unfortunately many that are sent out do, and I've written articles about this fairly common practice (see the January, 2012 issue of the National Association of Royalty Owners "ROAR" publication for the most recent article.)

Hope this helps you out.
Frederick M. Scott CMM, RPL
The Mineral Hub
How to figure the value of working interest. Asked 02/12/2013
Q: How do you get an appraisal of the value of oil wells for divorce? My husband and I have working interest in multiple wells and I\'m not sure how to figure their worth in a property division.
A: Working interests are often valued (when sold) using a multiple of their average net monthly income over a period of months. Depending on the condition of the lease equipment, the expected remaining productive life of the leases and the potential for new wells being drilled on the lease these multiples could range anywhere from 24 to 48 times the average net monthly income received over the past six months or so.

If needed, I'm sure your attorney could find someone to do an appraisal. He may also simply suggest that you sell the interests (thereby establishing their market value) and divide the proceeds.

Frederick M. Scott CMM, RPL
The Mineral Hub
Minerals given away contrary to will provisions. Asked 02/12/2013
Q: we recently received will stating mineral rights were to be passed down to children -and later, their children, however, one spouse took all - i\'ve checked as each plot is listed, and they are all under his name - on that, would a first step be contacting a probate lawyer (if, so does it need to be same city as where the land is), or contact a landman - and if we find the child gave them to her husband, is there recourse or is it a lost cause?
A: If the decedent's estate hasn't been probated in the state where the mineral rights are located then it probably needs to be. You'd need an attorney licensed to practice in that state, and preferably one located in the county where the mineral rights or other property are located.

If the child really did own the mineral rights, then she could have given them to anyone she wanted. If you don't think she should have been able to do that because of what the will says, then yes, I'd contact an attorney and have a short meeting with him/her to see if you have a case. Without knowing the specifics of your situation (i.e. whether the decedent's estate has been probated etc.) I really would suggest you just go see an estate or family law attorney about this.

Frederick M. Scott CMM, RPL
The Mineral Hub
Value of mineral rights in 2005? Asked 02/07/2013
Q: I was referred to Mick Scott in hopes that I might get some assistance establishing a value of some mineral rights that my sister and I inherited in 2005. There are 45 net acres in Grady County, OK and almost another 7 net acres in McClain County, OK. I\'m interested in selling my portion of the mineral rights and in order to do this, my accountant has asked me to determine what the Fair Market Value of the mineral rights was in 2005. Of course, in 2005 up until recently, I have tossed all letters with offers to purchase, that would probably have satisfied the IRS requirements as to Fair Market Value. Howver, I do have current offer letters. I\'m thinking that I have seen offer letters for as little as $2500 per acre through $5600. Naturally, I would like to minimize my capital gains to whatever degree possible, so the higher the FMV, the better for my pocket book!!! Are you able to assist me in any way? I have contacted an appraiser and he is the person who suggested I contact you. I believe that if I could even get a copy of a letter to purchase (doesn\'t have to be addressed to me) from 2005 this might help! All I know is, this whole ordeal is frustrating.\n\nThank you for any assistance you might provide.
A: Since you're planning to sell them anyway, why not list them for sale on the Mineral Hub (this site) and let us help you find a suitable buyer. While we're in the process of finding a buyer I would be willing to do some work and try to estimate their value in 2005. We receive occasional requests from banks, attorneys, and mineral owners asking us to appraise mineral rights for them. Unfortunately we don't have a lot of time for that sort of thing these days and so try to limit ourselves to Mineral Hub clients who are selling minerals on the site.

If you don't want to sell them on our site that's okay too though. It's not rocket science to appraise what they were worth in 2005. I can just do it faster than you could probably since we have access to a lot of pay sites.

You would want to look at "comparable sales" at the county clerk's offices in the respective counties, and if there were none, then you'd want to look at producing, leasing, and drilling activity in the area that was occurring in 2005 and compare it to today's to determine whether minerals were worth more, or less back then.

Off the top of my head I'd say that TODAY'S value is much closer to $2500/acre than $5600 though I'd have to do some research to see if the same holds true for their value in 2005, and their value also depends on which part of the county(s) they are in. 2005 was prior to "the bust" of course, so they may have been worth more then. I'd just have to check the specific area where they are located. For more info on how to value mineral rights you can check our FAQ page. I believe FAQ # 7 covers that.

Hope this helps you out. If you need anything else you can Contact Us at the Mineral Hub.
Bombarded with lease offers!!! Asked 02/06/2013
Q: Hello,\n\nWhat is this 3/16th fraction I keep seeing? \n\nWhat is force pooling?\n\nWho is the major company occupying section 23 Township 6 south range 1 west? \n\nthank you for your help.\n\nShaina Demaris
A: 3/16 is simply the fraction of your proportional share of the production they are offering in return for you signing their lease agreement. In addition to the royalty of 3/16 (they get the other 13/16) they will usually offer a "bonus" of so much per acre to get you to sign. You can read more about leasing in my Oil and Gas Leasing Tips Blog entry on the Mineral Hub.

I only see one company leasing that section currently, so if you are truly being "bombarded" I would expect it's from the same company (VM Harper.) They are likely a land company leasing for some oil company. Hard to tell who for sure until they "assign" the leases they are buying for their client, to their client.

Forced pooling in Oklahoma is basically an oil company's way of "forcing" you to lease (at terms dictated by the State) if you don't agree to lease to them. It's not necessarily a bad thing, but in most cases I'd rather sign a lease than be force-pooled. A company will usually only apply to force pool a drilling and spacing unit if they are fairly serious about drilling a well within the next year or so, since forced pooling applications cost money, and are usually only good for a year. Forced pooling is also covered in the aforementioned Oil and Gas Leasing Tips Blog entry.

Hope this helps you out.

Frederick M. Scott CMM, RPL
Manager at the Mineral Hub
How do I locate and value mineral rights? Asked 02/04/2013
Q: I am the power of attorney for an individual who owns the mineral rights under her property. How do we find the value of those rights?\n\nAlso, we have reason to believe that her deceased husband and his father/grandfather owned mineral rights in other locations. How do we locate all the rights owned. Thanks.
A: If the mineral rights are in a productive area then it may be worth trying to value them. This can be accomplished by searching for "comparable sales" in the same area, though it's often hard to find actual prices paid in states that don't require "tax stamps" when filing deeds. Oklahoma is one state that has started requiring such stamps, and the number of stamps purchased when filing a deed is usually a good indication of what was paid for the mineral rights.

As for locating other mineral rights that may be owned it would certainly help if you knew at least the county in which they were located. With that information you could search the "Grantor/Grantee" index books in the county clerk's office for his name. If he owned minerals anywhere in the county it's likely you could find them using that method.

For more information on valuing mineral rights you can view the FAQ page of the Mineral Hub. One of the questions there deals with valuing mineral rights.

For more information on how to find mineral rights you can view my Mineral Rights Blog entry on that subject.

Frederick M. Scott CMM, RPL
The Mineral Hub
Finding deed to inherited mineral rights? Asked 02/04/2013
Q: My siblings and I inherited mineral rights from my father. My mother did not probate his will when he died, but when my mother died we probated hers (we live in Texas). We were first contacted by a company who worked for a larger oil company 2 wks ago who collected the names of all my fathers heirs. Last week the landman contacted only 2 of the seven of us, offered them a $1000 bonus, 25% royalty, 3yr lease w/ 2 year option. The landman told my sister that he needs proof of heirship, and would get back to her regarding this, this being late last Friday. We could not find the mineral deed, although my mother told me they were paid small royalties on it in the past. My sister did get the abstract and survey numbers from the landman, as well as he told her the 2 different tracts were 180 9.5 acres total. Looking these up on the Texas RR Comm website, the tracts are contiguous. I have called the county clerk twice, and the office has not been helpful, telling me that I need a date the mineral rights were given to my father, which not having the deed I have no idea. I have since learned that I don\'t need the date to track down the rights. My sister and I plan to go to the county clerk ourselves this week. Is it possible to to find the deed with just the name, abstract and survey numbers, and once I find the rights, how do I get them transferred to mine and my siblings name?
A: In Texas you can either go to the county clerk's office and look up previous owners by name in the grantor/grantee index books, or you can visit the local abstract office and find them by looking in the tract they owned in using the legal description (i.e. the abstract and survey name.) The latter method would probably be the fastest way to find your father's deed, but most abstract offices will charge you to look at their records, whereas the county clerk's office is free. Many records dating back up to 20 years are now available online from such sites as Texas File though you will need to sign up with them first, and it will cost you a few bucks to print a copy of anything you find.

Many companies will lease heirs if they sign an affidavit of heriship (which the company will usually provide) but once the well (if any) starts producing any royalty payments may be held in suspense until the company is satisfied you have actually inherited the minerals, which may require that a probate be done on your father's estate.

As mentioned above, you can find the deed where your father acquired the mineral rights by checking the county clerks' "index books" and looking for his name, or can visit the local abstract office and look him up by the legal description.

Once you find the deed, then I'd talk to an oil and gas attorney about getting them transferred into your names. It's likely a probate of your father's estate will be required for that but as I said you might be able to get them leased without going through all that.

Frederick M. Scott CMM, RPL
The Mineral Hub
What is a "working interest" sale? Asked 02/04/2013
Q: What is a "working interest" sale?
A: Buying a working interest means you are buying a percentage of a well's (one or more) production, not the mineral rights themselves. Therefore it should be cheaper than buying the minerals themselves since once production from the lease stops, you will own nothing. As a working interest owner you will receive checks for your share of the production, but will also be "billed" for lease expenses such as equipment maintenance, and plugging costs if they decide to plug one or more wells.

If I were buying a working interest I would make sure the lease has some life left in it and is not near the end of its productive life. I would also make sure the operator is an experienced one since a bad operator can cost you money if they have lousy or very old pumping equipment that might be near the end of its useful life and thus need replacing in order for the lease to continue producing.

Frederick M. Scott
The Mineral Hub
Creek County Mineral Lease Offer Asked 01/30/2013
Q: I have received Two offers to lease a 20+ a. mineral interest I own in Creek County.\n\nDepending on how the project looks, I might be interested in participating rather than leasing. I have tried repeatedly to contact the company making the offer, but they have never returned my calls. Can you think of any other action I might take to get them to respond to me.\nI\'m more than willing to wait them out and see what they are proposing when they start a pooling proceeding.\nAs a second related question, how can I determine (a) what thek current spacing and pooling statusof this property is, and (b) whether there are any currentlyb pending applications?\nAppreciate any help!\n\nMack M. Braly
A: Could be they are just getting started and haven't decided to drill a well yet, so couldn't tell you how much your share would be. Could also be that they are planning to sell your lease to someone else later and thus have no intention of drilling a well anyway.

I'd check around the area and see who the local operators are and then see if that's the same company who's offering you the lease (or perhaps a land company hired by them.)

If they get serious about drilling they'll force-pool the section and one of the options in the pooling will be to participate in the well if you desire to do so.

The Oklahoma Corporation Commission (the regulatory body for oil and gas in Oklahoma) has a wealth of information available online relating to oil and gas activity and production in Oklahoma. You can look up such things as drilling permits, recent production information, well completion reports, forced-pooling orders, and anything else that falls under their jurisdiction.

Seismic 3D Permit Asked 01/28/2013
Q: I live in Caddo County on 16o acres surface only. I received a call from a man wanting me to sign a permit to allow 3D seismic survey. Can I refuse to sign this? The money is not as important to me as the integrity of my water well and the health of my livestock and most importantly MY PRIVACY. Are there any legal problems if I refuse?
A: You can refuse, but it likely won't stop them from doing the seismic anyway, as they likely only need one or two people to actually agree to it in order to proceed. If they're offering you money I'd take it, since you won't be able to stop them by not signing (well, legally anyway.)

You might have a valid argument with harming the cattle however. If you're really concerned about that (I would be if I had cattle) then you might check with an oil and gas attorney as to what options you might have.

Legal problems if you refuse to let them on your land? Well, possibly. They could go to court over it if you refuse and keep the gates locked or something, in which case you'd have to fight them in court which could be expensive. Again, I'd check with a reputable oil and gas attorney on the matter.

You don't want to meet them at the gate with a shotgun or anything as that would only get you in trouble. They might be annoying, but they are not "breaking and entering" as the mineral estate is in fact the "dominant" estate and so if the mineral owners want seismic done, and it requires them coming on to your land to do it, then it's likely they have the right to do that.

Hope this helps you out.
Frederick M. Scott
Manager at The Mineral Hub
Can I keep them from drilling on my farm? Asked 01/28/2013
Q: My father-in-law informed me that as long as you own the mineral rights to a piece of property that you can go in and put a well on that property if you have just the mineral rights and do not own the surface property. I want to know if this is true? The reason I ask this question is my brother just bought a farm in Ohio and does not own the mineral rights. Should he be worried that a well will be put in the middle of his corn field?
A: He need not "worry" about it, but yes, it's possible. The mineral estate is actually the "dominant" estate, and as such you can't prevent a mineral owner from producing their mineral rights if they decide to drill a well. Often however a company will work with the surface owners to select a location to drill prior to bringing the actual equipment in, and will often compensate the landowner for any damage to growing crops, fences, trees etc.

Keep in mind that the mineral owners cannot drill wherever they please, but do have a right to use as much of the land as is "reasonably necessary" in order to get to their minerals. In many cases, even if a farm is included in a drilling and spacing unit (i.e. 40-acre farm in a 640-acre drilling unit) you might not ever have a rig on your land because they can use horizontal drilling to get where they want to go under your land even if the rig is across the road from your land in another part of the unit (or even in an adjacent unit.)

In the event they can't do that, they'll likely compensate your brother pretty nicely for the "inconvenience" of having a well on his property, even though he's not a mineral owner. Oil companies don't want unhappy landowners if they can help it so will usually try to work with them on picking a location to drill. I've seen landowners that were paid as much as $25,000 compensation for a drilling site on their land, which is paid before the drilling is even started in many cases. And other terms for damages, if any, can also be negotiated prior to drilling in many cases.

A landowner who also owns the mineral rights would of course have more negotiating power than just a landowner, but that's not to say a landowner will have no say at all. Most companies try to accommodate landowners as best they can.

Hope this helps you out.
Frederick M. Scott
Manager at The Mineral Hub

How do I buy the mineral rights under my house? Asked 01/22/2013
Q: I\'m interested in buying a home in West Virginia but the mineral rights are owned by someone other than the seller. What is the process to bring the rights back to owner of the land. I don\'t want to buy land that someone can come drill on whenever they want. Thanks Marie
A: You'd have to contact the owner of the mineral rights and offer to buy them from him/her; and of course there's no guarantee they'd agree to sell. Keep in mind that just because you own mineral rights it doesn't necessarily follow that no one can drill without your permission. The mineral estate is the "dominant" estate actually, so if needed it's likely they could drill on your land if the other mineral owners (or those they leased to) in the unit (which may include your house) deemed it necessary.

Before you start panicking however, they won't be able to drill within at least 200 feet of any "occupied dwelling" and frankly most oil companies try to work with surface owners on location before they start drilling. They don't want a bunch of unhappy landowners if they can help it so they try to accommodate the wishes of same whenever possible. Often they can "slant drill" from a half-mile away if they really need to get under your land, so you wouldn't really feel the well was that close to you if they did it that way.

Hope this helps you out.
Frederick M. Scott CMM, RPL
Manger at The Mineral Hub
Grady County, OK lease offer Asked 01/16/2013
Q: Section 36, Township 7N, Range 8W, and containing 10.7813 acres, more or less, my net is 2.6953.\n\nI have been \"offered\" $1,078.12 bonus ($400 per mineral acre), 3 yr. lease, 3/16th royalty. However, there is a 2 yr. option to renew (which doesn\'t thrill me).\nThe other owners of this 10.7813 acres have signed, I am told.\nDeal or no deal? The deal doesn\'t sound too bad, although I\'m not wild about the tactics of the landman making the offer.
A: Right now it looks like Calvin Energy is the only company buying leases in your section and the surrounding sections so your negotiating power will be limited because of that, but of course you cannot be forced to lease if you don't want to; though they could apply force-pool you into their drilling unit if they get serious about actually drilling a well in the future. A forced-pooling, if approved, would basically mean the state would "force" you into an agreement with them at terms dictated by the state, which would supposedly represent the average of what they've been paying people around here. They won't apply for a forced-pooling unless they actually plan to drill a well though (a forced-pooling will cost them extra money.)

Better to sign a lease if you can reach an agreement with them. I'd ask that they get rid of the extension option, or agree to pay you more per acre for it should they choose to exercise it (say $600/acre.)

Since they've been buying up a lot of leases recently in your section and the surrounding sections (mostly 6-6N-7W and 1-6N-8W) I assume they plan to do SOMETHING with them, and drilling one of those two sections seems the most likely right now. They've only filed 3 leases in your section so far, but could be that they just haven't filed them all yet so there could be more.

As for the price, it's hard to say if that's the "going rate" really, since they're the only one's leasing currently. I'd concentrate on getting that lease extension option removed if it were me, and not worry so much about the bonus since you've only got a few acres.

One other option would be to see if they'll go for just a one-year lease and a 1/4 royalty with no bonus. That way you won 't tie up your minerals for three years, and if they do drill a well you'll have a bigger share of it. Getting 1/4 royalty and a bonus would be pushing it here I think, which is why I wouldn't even bother asking for one if they agree to a 1/4 royalty.

Hope this helps you out.
Frederick M. Scott CMM, RPL
Manager at The Mineral Hub

How can I check on my aunt's mineral rights? Asked 01/12/2013
Q: I am trying to find out what happened and what is happening to my great aunt\'s mineral rights. She passed away in 1960 and an oil/gas well was put into operation in that area in the late 70\'s. She died without any children and was never married and was only survived by her brother who never received her rights. A title search was done last year and her name was the only name found by the landman and her estate was probated with her interests divided amongst her nephews and nieces. Since the 70\'s the original oil company has bought a different company and all they will tell me is there is no moneys held in suspense. Since I know the well is still producing who would I talk to see if somehow she was missed on the original division order?
A: If her estate was probated and the nieces and nephews were the heirs, then they need to contact the oil company and make them aware that they are now the owners of your aunt's mineral rights. They would need to provide a copy of the probate to the company most likely, and this of course assumes your aunt didn't sell the rights prior to her death.

They should also make sure a copy of the probate is filed in every county where your aunt owned mineral rights, and if the probate was not done in the state where the mineral rights are located it will likely be necessary to do an "ancillary probate" in the state where they are located in order for her heirs to have marketable title to the mineral rights. A local attorney could get this done for them.

Frederick M. "Mick" Scott CMM, RPL
Do you have mineral rights for sale that are not listed on y Asked 01/12/2013
Q: Hello, I am looking to buy minerals in Alfalfa County, OK. I\'ve looked at your current listings, but I was just curious if you have any others available that are not listed. Thanks.
A: With very few exceptions, ALL mineral rights we list for sellers are posted on the "View Listings" page. In rare instances we will contact buyers directly that have specifically requested certain acreage and thus it doesn't get listed, but that doesn't happen very often. We did post an Alfalfa County, OK listing in December, but I assume you've seen that one? It's still up there. You can sort the listings alphabetically and it will come up first.

Mineral Hub
Definition of "held by production"? Asked 01/10/2013
Q: WHAT OIL OR GAS PRODUCTION STANDARDS DOES THE LESSEE HAVE TO MEET IN ORDER TO MAINTAIN THE HBP STATUS? YOUR WEBSITE HAS BEEN INFORMATIVE, AND I THANK YOU.
A: In order for a lease to continue to be held by production, the operator must be producing enough oil or gas profits to exceed the costs of getting it to the surface. If a gas well is producing less than 500 mcf of gas per month then it's probably not meeting that standard unless some oil is also being produced.

For oil it's trickier because oil can be stored on site until the oil tank is full. I'd say an oil well currently producing less then 10 barrels of oil per month would not be meeting the production standard either, unless the gas production made up for it or unless the oil well was very shallow and thus cheaper to operate.

Of course price will also play a factor in determining whether lifting costs are being recovered. If oil were selling for $200/barrel then some wells currently considered not capable of producing in paying quantities could actually make money at $200/barrel.

Hope this helps you out.

Mineral Hub
How can I estimate what my royalty payments will be? Asked 12/28/2012
Q: If I have 1.3516 net mineral acres in a 641.2 production unit with 3/16 royalty percentage and a decimal interest of 0.000395285, what might my royalty check be for a well that is producing 4,856 BBL per month and 17,395 MCF of gas per month?
A: About $154/month for the oil assuming $80 oil, and about $21/month for the gas assuming $3 gas. (Gas/oil production amounts X current price of gas/oil X your decimal interest = income for that month.)

Note that the decimal interest you provided above, which represents your proportional ownership in the well, is calculated like this: Acres you own divided by acres in Unit times the royalty fraction (1.3516 divided by 641.2 times .1875 equals .00039524.)

Mineral Hub
Are lease and royalty payments community property if inherit Asked 12/26/2012
Q: Are the Texas lease bonus or royalty payments considered community property if inherited or gifted?
A: I do not believe inherited or gifted mineral rights would be considered community property in any community property state, but check with your attorney to be sure.

Mineral Hub
Fractional ownership in mineral rights? Asked 12/26/2012
Q: I and my niece and nephew have inherited 300 acres in Prowers Count, Co. We have cleared up the title to the property with a court Decree declaring we own the 300 surface acres and 1/32 undivided mineral rights. My question is about the other 31/32 mineral rights. Can we lease out the 300 surface acres and if so how does the \n31/32 group come into play? Can they lease out their \nrights without our knowledge or consent?
A: You can lease the surface if you can find someone wanting to lease the surface (perhaps for hunting?) It likely won't be an oil company however as they of course are after what's UNDER the surface. The surface is a separate estate from the subsurface (mineral rights) estate. Any owner of any mineral rights under your 300 acres can lease those rights to someone that wants to lease them. They don't need your consent as they are not your mineral rights. Again, two separate estates.

Likely if any of the other mineral owners lease their mineral rights you will become aware of it because it's likely you too will be contacted about leasing your 1/32.

Hope this helps you out.

Mineral Hub
Sale of mineral rights. Asked 12/14/2012
Q: I received a letter from Omega Royalty Co.,L.L.C. offering $1000 /acre for my mineral rights in Section 25-13N-5E Lincoln County, Oklahoma. Is this seem like a fair offer or should I try for more?
A: Sounds like a great offer to me. I'd jump on it assuming the royalty is at least 3/16. They may be offering that much because New Dominion is planning to drill a horizontal well in that section in the not-too-distant future (they applied for a spacing order...one of the first steps when planning a well.)

Hope this helps you out.

The Mineral Hub
Proof of heirship required to lease? Asked 12/14/2012
Q: My mother passed away leaving a will. She had mineral rights. In the will it stated that her decendants would have rights to any of her property not mentioned specifically in the will. A Landman contacted my family and asked for a copy of the will. When the mineral rights were divided up by the Gas Company, it was divided up between the four children. The only problem is that two of the children are step children. The Gas Company is now requesting that we prove that we are heirs of our mother, even though we have submitted to them a copy of the will. I have called the Landman three times to let them know that the stepchildren should not be included in the division of rights. I have also called the Gas Company several times to ask what proof they needed for me to prove that I am my mother\'s child. They never return calls. On top of that, I have until November 30 to submit proof to them. How can I when I don\'t know what to submit? Is this usual for a Gas Company to do this? I find it a very bad way to do business. Thank you!
A: I'm sure they probably believe you are an heir, but they likely would prefer you get your mother's estate probated before leasing you. Having the estate probated would "validate" the will in a court of law. Many companies will lease if you simply sign an "affidavit of heirship" but apparently these guys are being picky.

When you probate an estate, or will, you are basically just getting a judge to review the estate and say "Yes, this is a valid will and those mentioned in it are the rightful heirs." The judge will issue a "final decree" or "judgement" to that effect once the probate is done. That document will formally transfer the title to the heirs, whereas without the probate the minerals are still technically owned by your mom's estate even though it's obvious you are an heir.

I find it unusual that this company won't lease you (or at least lease the personal representative of your mother's estate) after having one of you execute an affidavit of heirship, but perhaps they are troubled by the fact that the step children may try to claim some interest here and so they'd rather have the estate probated first so that the heirs are officially spelled out by a court.

Probating your mom's estate will likely cost $2000 to $3000 and take at least a month. You should contact a local attorney, who can explain the process in more detail to you (and help with all the paperwork involved.)

Another option would be to contact other companies leasing in the area who might not be so picky and would be willing to lease you based on just an affidavit they'd have you sign.

Hope this helps you out.

The Mineral Hub
Royalty rate & forced pooling cost Asked 12/13/2012
Q: First, thanks for putting together your sight and twitter feed, it is all super informative. I have recently become the go to person for a collection of family mineral interests primarily in Garvin County Oklahoma; it seems the best offers we receive are 3/16ths with widely varying bonus considerations. I\'ve been able to work offers up to a 1/5th royalty in some cases. Two questions: (1) Do you think it is realistic to get 1/4 royalties in this area -- I know 1/4 is common elsewhere but I\'m getting strong push back on that. (2) is there a rule of thumb for the cost to pursue a forced pooling? It would be helpful to know that when negotiating since that really seems to be the choice that must be considered.\n\nThanks again.
A: 1/4 is unrealistic except perhaps if you agree to zero bonus, and then likely only if you have just a few acres. As to forced pooling, they will likely have to force pool no matter the deal you make (or don't make) with them so I'd say just try to get the best lease you can and if you can't work it out then you will likely be force pooled in the event they actually are planning to drill.

Hope this helps you out.

The Mineral Hub
Selling Mineral Rights Asked 12/12/2012
Q: We have received multiple offers to sell our Mineral Rights in Robertson County, TX. We currently receive royalties and have for over a year. The well continues to produce Natural Gas. After speaking with local Landman (representing major Oil Co) they indicate that Oil is believed to be present and will start drilling for it early next year! How can I determine the best/highest value to be paid if I sell?
A: While we can only do in-depth evaluations for clients who are selling their mineral rights through our site due to the considerable time and effort required for a proper evaluation; I can direct you to our FAQ page dealing with this subject, which will enable you to estimate their value on your own fairly accurately.

Simply put, the more "active" your area is with drilling and leasing, the more mineral rights in your area will be worth.

For information on what's going on in your area, you can visit the Oklahoma Corporation Commission's website. There you will have access to drilling permits, production from current wells, and can also estimate leasing bonus amounts being paid (by looking at forced-pooling orders...which are often indicative of what's being paid for leases in the same area.)

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Do mineral rights eventually revert to the surface owner? Asked 12/11/2012
Q: If a property owner sells some or all of their property and maintains mineral rights do they own these rights forever? Do they at some point in time revert back to the present property owner and are laws pertaining to mineral rights the same in all states? If not I am in Michigan.
A: Louisiana and North Dakota are two states I know of where you can lose your mineral rights to the current surface owner (Louisiana) or to someone else who claims them (North Dakota) if you don't keep up with them. You can check the statutes in each state relating to that. They are online.

Hope this helps you out.

The Mineral Hub
What are my mineral rights worth? Asked 11/30/2012
Q: We are thinking about selling our minerals in Logan County, Oklahoma (179 acres). Need advice for their value. Thanks!
A: While we can only do in-depth evaluations for clients who are selling their mineral rights through our site due to the considerable time and effort required for a proper evaluation; I can direct you to our FAQ page dealing with this subject, which will enable you to estimate their value on your own fairly accurately.

Simply put, the more "active" your area is with drilling and leasing, the more mineral rights in your area will be worth.

For information on what's going on in your area, you can visit the Oklahoma Corporation Commission's website. There you will have access to drilling permits, production from current wells, and can also estimate leasing bonus amounts being paid (by looking at forced-pooling orders...which are often indicative of what's being paid for leases in the same area.)

Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub

Sincerely,

Mineral Hub
Abandoned Mineral Rights Asked 11/24/2012
Q: We own land which has unknown people holding 50% of the mineral rights.....these deeds are 50 years old...I know that some of these persons have been dead for a very long time....We leased the 50 % we own on 3 parcels of land..\nHow do we go about filing for the other 50 % ?\nThank You, Faye Joiner
A: You do not, unless you are in a state that has mineral abandonment laws. Most states don't have such laws. North Dakota is one exception I know of. Louisiana is another in that in certain situations after ten years the minerals revert to the surface owner automatically.

In most other states the heirs of the people who died would now own their minerals. If they had no heirs then they would still be in the estate of the deceased most likely. Really no way you can "claim" mineral rights just because someone dies.
Want to lease mineral rights in Texas Asked 11/11/2012
Q: My friend has mineral rights in Texas and I have checked with the County Court House in Texas and they are in his name.\nThe next move is to try leasing.\nWe live in the UK.\nPlease could you advise the next move.\nThank you.\nSteve.
A: Usually it's best to wait for the oil company or its representative to contact YOU when attempting to lease. By contacting them first you lose some negotiating power in my opinion. That said, there's nothing wrong with contacting a company directly if you keep that in mind.

The local abstract office in the county where your mineral rights are located could tell you who is leasing in the tract of land where your minerals are located, and could provide copies of the lease forms containing their name and address. They will likely charge you for this information.

It would be up to you to contact the companies by phone or mail and ask if they'd be interested in leasing your interests. They would of course need the legal descriptions (i.e. the Abstract name or number, Block # if known, and a Section number if applicable.)

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
Assignments of Mineral Deeds Asked 11/05/2012
Q: I have inherited eight 1/2 700 acres of Mineral Deeds within one county in SE Illinois. (New Albany Shale) Marion County. For all logical reasons I will sell them and need to sell all of the eight together at one time. I have complete descriptions of each tract and a drawing. At my age I do not have time to deal with 8 individidually. Is this normal practice? I imagine this lowers the price, but that isn\'t an issue now. Thank you.
A: You can sell all eight at once, or you can sell each property individually. Most buyers would prefer to buy all you own rather than just a portion, but there are also buyers out there who prefer "smaller" properties. It's really up to you how much you sell at any one time.

Hope this helps you out.
Frederick M. Scott
The Mineral Hub
What do NMA and HBP stand for? Asked 11/04/2012
Q: what is NMA and HBP
A: NMA means "Net Mineral Acres" and HBP means "Held By Production."

Capish?
How to determine the value of my gas wells Asked 10/28/2012
Q: I am considering selling part or all of my gas wells and need to know how to place a value on each of 19 wells.
A: Assuming you are not the operator, but are a mineral owner receiving royalty checks a rule of thumb would be to multiply the average of your net monthly income over the past six months by 36 to 48. The result would be the approximate value to most buyers, though some would offer a higher multiple if the wells are good, and in a good area.

The above is only a rule of thumb however, not a hard and fast rule, so I'd suggest you read the FAQ pages on the Mineral Hub for more information on how buyers value producing (and non-producing) mineral rights. You can find that info here

You didn't specify, but if you are a working interest owner or an overriding royalty owner the multiple may be towards the lower end of the spectrum because your ownership would cease once production ceases and thus is worth less than outright ownership.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL


Did we retain mineral rights when we sold the farm? Asked 10/27/2012
Q: My dad and his sister inherited a farm in Sheridon county ND and although the farm was sold I was told that we retained mineral rights. How do I verify this?
A: You'd want to look at the deed where the farm was sold. If the mineral rights were owned at the time the farm was sold, and were not specifically reserved on that deed, then they went with the land. by default.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL

Should we haggle? Asked 10/26/2012
Q: A little over two years ago, my wife was contacted by a genealogist trying to track down the inheritance path of mineral rights originally owned by her grandparents. My wife inherited mineral rights for 4.9 acres of land in Marion County, West Virginia. The genealogist was working for an agent of XTO. She gave this person her contact info and mailing address, and that was the last we heard for a long time. \n\nAt the time, I did some googling, and found a story about a subdivision in Texas that was approached by XTO looking to lease gas rights. The first group of people accepted the $1k/acre offered, while neighbors who held out were able to get $10k/acre. My apologies, but I can\'t find that link at the moment, so this is hearsay anecdotal.\n\nSo, two years later, and my wife is contacted again. At this point she is apparently the last signature needed to start working the land. This is through no action of hers, the genealogist had transcribed the address incorrectly, and the offer had been sent to the wrong address.\n\nNow that they are back in touch, they are very eager to close the deal. The offer is $1k/acre for a five year primary term, and 12.50% royalty. There is an option to extend for an additional three years, with a vague phrasing of \"Upon extension, the original bonus consideration of $4,909.10 is paid for the optional three year extension.\" I say this is vague because it doesn\'t say \"an additional bonus\", it says \"the original bonus\". Having read other questions in this forum I wonder if this is a bit of slight of hand.\n\nI was not terribly surprised to see that they were offering us $1k/acre, as this seems to be pretty standard for their initial offer from what I have read here and elsewhere. I am wondering if we should try to negotiate for a higher per acre initial payment. According to them, my wife\'s signature is the only thing keeping them from proceeding.\n\nAlso, should I ask them for an assay report? A friend who graduated from the Colorado School of Mines suggested asking for this when we were first contacted two years ago.\n\nI also find it interesting that the cover letter offers $4,909.10 bonus, but the contract only stipulates $1. Is that normal?\n\nThank you for your consideration.
A: The "vagueness" you refer to in the extension option is nothing to worry about. They're saying (though perhaps not very eloquently) that they'll pay you the same bonus they did the first time around if they decide to extend your lease for another three years.

I wouldn't worry about the extension language as much as I'd worry about the extension itself. I usually try to negotiate those extension clauses away prior to signing a lease, or at least get them to agree to pay DOUBLE the original bonus instead of just matching it upon extension; and that's doable sometimes, especially in relatively "hot" areas.

I would also read the Oil and Gas Leasing Tips blog entry here on our website before signing, as you'll find additional tips there.

As for the bonus, I would ask if $1000 is the most they've paid anyone in the past year, and if not, I'd ask them what was and agree to that if it's substantially more than you're being offered. If you really are "the last holdout" due to the genealogist's address error, then you probably have some negotiating power. I would also ask for a 3/16 royalty, instead of just 1/8. A 3/16 royalty is 50% more than a 1/8 royalty.

Push too hard though, and they may decide not to lease you.

As to the $1 listed on the lease they sent you, yes, it's common not to disclose the actual bonus paid on the lease itself, but you should receive a "cover letter" with it that will.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL


O&G lease expired. Should I contact Lessee to renew or wait? Asked 10/25/2012
Q: I own mineral rights in section 33-9n-16w IBM in Washita county Ok. I had a three year lease which expired in Sept 2012. Should I contact the oil company about renewing lease or wait for them to contact me? What are my options?\n
A: Best bet for most money is to wait until they contact you. If you contact them while they're (apparently) not interested then you'll be hard-pressed to get them to offer top dollar. If they were interested they would have contacted you. likely.

One idea would be to offer to lease them minerals in other sections in the county (or adjacent) you own in they may be interested in ALONG with these. Going that route may get you a better deal in Section 33, but of course it requires that you have something they want somewhere else.

Hope it works out for you!

Sincerely,

Frederick M. "Mick" Scott CMM RPL
Logan County, OK Lease Offer Asked 10/22/2012
Q: one of my clients was surprised to receive a letter regarding the \"East Prairie Belle Prospect\" in Logan County OK. I was asked to inquire about the status and ownership of 1.25 net mineral acres. NE/4 of Section 31-15N-3W. How do I find out the value or speculate the value for my client? They are offering $100 per mineral acre bonus with a 1/8th royalty provision for 3 years.
A: There have been several companies leasing in this, and the surrounding sections this year so if it were me I'd contact the ones you haven't talked to yet and see if they are interested at a slightly better price. I don't really think you'll do much better than $100/acre here, but you might try for $150 and 3/16 (not 1/8) and see what happens.

I think you could (and should try to) do better than $100 and 1/8 royalty, as some of the sections surrounding this one have been leased for $100 and 3/16 royalty.

Frankly, if your client only has 1.25 acres I would just ask for a 1/4 bonus and NO royalty as that's probably doable, and your client would end up with more money in the long run if a producing well were drilled. If you can get a 1/4 lease and no bonus, they might also be willing to shorten the lease term to only 1 year, thus tying up the minerals for less time and giving you the opportunity to lease again in only one year, instead of three.

Some of the companies you might try are GLB Exploration, Universal Land Services, Jackfork Land Services, and Continental Land Resources. Granted, the land companies are all leasing for an oil company client, but they may not all be leasing for the same one so I'd say it's worth a shot to contact them. Most if not all are based in Oklahoma and you can probably "Google" them for contact info.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL


Can I Sell Leased Mineral Rights? Asked 10/05/2012
Q: I have a client that leased his mineral rights in 2010 for 5 years (Oklahoma Property). He was approached the other day to sell the minerals. My question is can he sell the minerals even though he has them currently leased and if so how do you go about it.
A: Your client can sell his mineral rights whether they are leased, producing, or not leased. In areas where there is still a lot of leasing going on, they're not going to be worth as much leased as unleased, assuming he leased them recently. This is because he's already received some of their value through the lease bonus.

If they're in an active area they'll still have plenty of value; probably at least twice what he leased them for (assuming he leased fairly recently.) If he decides to list them with me (The Mineral Hub) then of course I'll take a closer look at the area once I know where they are and see what I think they might be worth to a buyer.

Since he's already been approached about selling I'm sure the buyer who approached him can tell him how to proceed with the sale if he wishes to sell to him. Protocol varies from buyer-to-buyer sometimes so there really is no one way "to go about it."

If your client wants to sell them through the Mineral Hub he can submit a listing on the Sell Mineral Rights page. I'll be glad to try to find a buyer for them and help him through the sales process if he wants to go that route.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL




Neighbors were leased but not me? Asked 10/05/2012
Q: I just found out that all my neighbors on land I own in Jackson County, Oklahoma, leased their minerals in 2009 and early 2010. I own 240 acres surface, 160 acres on which I own all mineral rights, 80 acres of which I own 1/2 of the mineral rights, the balance being owned by several heirs of a previous owner. The other two parcels of my section were leased, but I was never contacted by any landmen. I have been to the courthouse to determine who was doing the leasing and have phone numbers and addresses for three companies. What is the best way for me to generate interest in leasing my minerals?
A: If you'll email me us legal description I can look the section up and see who's leasing there now, if anyone. If you want to though you can just call the three companies and ask them if they area interested in leasing you since they apparently leased your neighbors. In most cases though if you weren't contacted it probably means they were not interested or perhaps couldn't locate your contact information from the county records.

Another possibility is that the spacing in your section is only 160 acres or less for each well and they were just leasing one of the quarter sections since they didn't need the whole section.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL


How do I find out what mineral rights I own? Asked 10/01/2012
Q: My grandfather owned coal mines -- I know the family has mineral rights all over the place. Seems no one knows about them until someone contacts them. How do I find out what mineral rights the family owns? Is there a national registry that you can search by name?
A: No national registry that I know of that you could use to search for mineral rights. To find out what mineral rights the family owns, you're likely first stop would be the county clerk's (or recorder's) office in the county where the mineral rights are located. This is where all the land records are kept. You could also try to find a good abstract office in the county where the mineral rights are located, as they could do the title search for you, or allow you to look through their records (which may be better organized) for a fee.

If you're wanting to figure this out yourself and would like a more in-depth explanation of what's involved in discovering what you own I would suggest you read my blog entry on creating a chain-of-title.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
The Mineral Hub


Potential royalties from land in Texas Asked 10/01/2012
Q: Hi There,\nDrilling permits have recently been issued on land in Texas where I\'ve leased my mineral rights. I found this info while doing a query on the TX RR Commission Website. On the website it states the exact same survey name and abstract number as on my lease but the \"lease name\" is different than mine. Does this still mean that I could receive royalties because of the fact they are about to drill (or already are)on the land/survey of which I own some mineral rights? It\'s all a little confusing to me, but within this survey there are about 6 wells that have been assigned a number but again my name appears no where. Thank you! Best, Cynthia Ridley
A: It's common for there to be more than one "drilling and spacing unit" within any given abstract or survey, so it's not surprising that your lease name is different from the one you found online. Often there can be several different and separate lease boundaries within a given survey, and unless they are all pooled together (something the oil company must apply to the state to do) then you will not share in any production from a lease that your minerals are not a part of.

One thing you can do to see whether your minerals have been included in a drilling and spacing unit would be to pull up and look at any drilling permits that are or have been issued within the survey/abstract your minerals are in.

Each drilling permit filed in Texas will include a MAP outline of the lease boundaries. If your minerals are within those boundaries then you will share in the production from any wells drilled there.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
The Mineral Hub


Love County, Oklahoma Mineral Rights Valuation Asked 10/01/2012
Q: My sister and I own Mineral rights to 15 acres in Love County Oklahoma . Legal Description is Township 6 South,Range 3West . section 14 :n/2of NW/4and NW/4 of NE/4.My question : Is there any drilling activity in this area and how do I go about determining the value of a lease or outright sale ? Thanks
A: Most of the current drilling activity in Love County is to the east of you, though there has been some LEASING in your township recently by Opus Resources, and a few land companies. I have not seen any leases filed in YOUR section 14 yet however, though that doesn't necessarily mean no one is interested.

To the east of you by about a dozen miles I've heard of lease bonus amounts of $750/acre being paid. You are not that far east however, and there is more activity there, so I wouldn't expect that for your lease. You're looking at between $150/acre and $200/acre probably.

If you decided to SELL your mineral rights, I think you're probably looking at $500/acre or so, but would have to run them up the flagpole (on the Mineral Hub) to see what buyers would be willing to offer. I'm not always right, but I can tell you that you are too far west of the current activity to expect the same value as others are getting 12 miles east of you.

If you don't need the money I'd just hang on to them for a few years and see what happens, or perhaps just sell half of them now, and keep the other half for later.

The Oklahoma Corporation Commission (the regulatory body for oil and gas in Oklahoma) has a wealth of information available online relating to oil and gas activity and production in Oklahoma. You can look up such things as drilling permits, recent production information, well completion reports, forced-pooling orders, and anything else that falls under their jurisdiction.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL



Drilling activity in Washita County (near Rocky, OK) Asked 09/30/2012
Q: What if any is the drilling activity in Washita County near the Small Town of Rocky,OK on Hwy 183 10 miles N of Hobart, Ok?
A: Nothing is going on currently in that area. Most of the current drilling and permitting activity is to the north by about 15 miles, between the towns of Foss, and Bessie.

There has been some leasing activity from Chesapeake and Cordillera Energy that is closer to Rocky, and not as far north, but none since 2010 in the township where Rocky is that I can see (8N-18W.)

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL


Do donated mineral rights belong to me? Asked 09/27/2012
Q: Land was donated to me by my parents. Its all in my name. Do i get the mineral rights are do my parents. no where in the legal documents it says anything about mineral rights. thank u for helping me with this question
A: You'd have to look at the conveyance from your parents to you. If the conveyance (i.e. a deed) is adequate to legally convey title then you would get the land. If they owned the mineral rights and did not specifically reserve them when "donating" them to you, then you would have received the mineral rights as well.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
What is a "listing number"? Asked 09/26/2012
Q: What is a listing number?
A: On my site, a "listing number" is the same thing as a "property number"; and is simply the number that I assign to each listing that is posted on the Buy Mineral Rights pages. You can see each property number by clicking on the title of any listing.

Some people prefer to refer to listings by their numbers rather than by their (sometimes lengthy) legal descriptions.
Receiving Lease Offers in Moffat County, Colorado Asked 09/21/2012
Q: How does one go about offering leasing rights to minerals unheld by production.? Are there agents who represent sellers such as real estate agents represent sellers of homes? We receive numerous offers from various oil companies and do nothing with them as we have no idea what is fair and have no idea if we could have another party represent us to lease the rights rather than being approached by landmen who search records and find out we have unleased rights in Moffat County, Colorado. Thank you for your time.
A: In most cases, if a company is interested in leasing your mineral rights, they will contact you, as it appears several have already done. You can however have another party represent you when dealing with them if you choose to. You’d probably need to give them a limited power-of-attorney or something so they could act in your stead, or you could simply hire an oil and gas attorney to represent you and refer all calls to him/her.

Bringing an attorney in to negotiate on your behalf may scare off some potential lessees however, as most would rather deal directly with the mineral owner than an attorney who is trying to justify his or her fee. That said, a good oil and gas attorney can be a real asset to those who are not informed and don’t want to take the time to arm themselves with knowledge of their area that would allow them to negotiate effectively on their own.

The fact that you are receiving interest from several companies indicates you are probably in a good area. If you don’t agree to a lease deal, and one of those companies decides to move forward with drilling a well, they will likely apply to the state oil and gas regulatory body for a “pooling order” that will effectively “force” you into an agreement with them, at terms dictated by the state. This is not always a bad thing (the State’s terms are supposedly “fair” but are not always better than you could obtain on your own with a little effort.)

Most mineral owners are capable of negotiating a good lease deal on their own, although it usually requires a little homework beforehand. In most cases I would suggest doing some research yourself prior to hiring anyone. You might be a better negotiator than you think once you arm yourself with some knowledge. You might want to get started by reading the Oil and Gas Leasing Tips article I wrote for the Mineral Hub Blog a couple of years ago. The general advice given is still very applicable today.

In cases where a large amount of acreage is involved, or if you don’t want to take the time to learn to effectively negotiate yourself, then you might in fact do better by hiring someone to negotiate on your behalf. Just be sure you’re dealing with a reputable landman or other professional who can actually do a BETTER job for you than you could for yourself. Otherwise, why pay them?

A good landman can often help you negotiate a good lease, and since much of their job entails contacting people such as yourself for leasing, they have a pretty good idea of how to deal with oil and gas companies and know what they will and won’t accept in a lease deal. Some will charge a flat fee, but many will charge a percentage of your bonus amount instead. You probably DON'T want to hire a real-estate agents to negotiate an oil and gas lease for you. While some are also experienced in oil and gas, most are not; just as most landmen do not have experience selling houses.

A good oil and gas attorney can also be an asset. Some are very good, and most attorneys will charge by the hour rather than taking a percentage of your bonus (probably a better deal if large amounts of acreage and potential bonus are involved.)

I would quiz anyone you intend to hire; and if they can’t convince you that they can do a better job negotiating than you, then you probably need to look for someone else, or do it yourself.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
www.mineralhub.com
The Mineral Hub
Worried about road damage from drilling operations... Asked 09/21/2012
Q: Eagle Ford oil co. has started drilling very close to my mom\'s home property. Specifically off of County Rd. 127 which is off of highway 80. This county road has two entrances off the main highway. This is a dirt road, about a mile and half with several sharp turns. My concern is that the road will be damaged due to the trucks using the longer route into the site. There is about 4 residences on this road. One entrance is closer to the drilling site, they should be using only that one or build their own driveway from the highway. Can you advice me on this? I will also ask the city and county and probably an attorney, but I would like to hear your take. Thanks
A: Since it's a county road you're worried about here, I would contact the county and alert them to your concerns as you've already mentioned you plan to do. May be too late since they've already started drilling, but you could also contact the oil and gas company and ask if they plan to build their own road to the site, or confine their trucks to the road you mentioned.

Sometimes the oil and gas companies will sign some sort of surface use agreement with the landowner on whose land they are drilling, even if they don't own the mineral rights. This agreement will cover such things as damage to growing crops, trees, roads, fences, and anything else the landowner can negotiate. Often the companies will, in addition to these things, pay a sum of money to the land owner to cover the "inconvenience" of having a well drilled. This sum can range from $5000 to $25,000.

I realize the above may not apply to your mom since they might not be drilling on HER land, but just in case they do drill on her land in the future it's good to be aware of this.

Most states also have "accommodation doctrines" in place to help make sure that the oil and gas company uses only that portion of land that is "reasonably necessary" to drill their wells. Not sure if that would include damage to public roads. You'd have to check your state laws to see what they do and do not cover, and not all states have such laws in place.

Since you mentioned "Eagle Ford" I will assume it's TEXAS CR 127 and Hwy. 80 you refer to. You might find THIS article from the Texas Railroad Commission helpful. It answers some of the questions raised by Texas surface owners.

Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
Timbercreek Mineral Company,LLC
The Mineral Hub
Is "Timber" a Mineral? Asked 09/20/2012
Q: Is timber considered a mineral, or does it just concern water, gas, oil
A: Timber is not considered a mineral. The rights to timber belong to the surface owner. Groundwater rights also belong to the surface owner.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
www.mineralhub.com

McClain County, OK Activity Asked 09/20/2012
Q: I am trying to find information reelative to drilling in section 18, township 5 north, range 1 west. Can you tell me if there has been any activity on this land? If so, please identify a time frame that this occured. I am new at this and was not able to find this information. Thank You.
A: I will assume you are referring to McClain County, OK since you did not include a county or state.

There has never been any production from 18-5N-1W that I can find, and in fact a couple of “dry holes” were drilled there in the past; one in 1957 and another in 1971. Both have long since been plugged and abandoned.

There is a small producing well in adjacent Section 19, but it barely produces anything more than “fumes” currently. It will probably be plugged at some point, or perhaps “reworked” to improve the production. It’s called the “Eslie #1” and is currently operated by D-Mil Production, Inc.

In Section 13-5N-2W, which is right next to your Section 18, Charter Oak Production is planning to drill a well, but it has not been “spud” yet that I can see. They received a permit in April however, and they have a year to drill it before the permit expires.

Hope this helps you out.

Frederick M. "Mick" Scott CMM RPL
www.mineralhub.com
The Mineral Hub
Can we be Force-Pooled in Oklahoma? Asked 09/18/2012
Q: My family has 50% of the minerals under a tract in Oklahoma. Can we be forced pooled even if oil company does not have over 50% of the minerals leased? If we are forced pooled, what will we expect to receive as payment and percentage of production? They have only offered $150 and 3/16 per acre, but we have leased other minerals within a few miles for $500 and 3/16 per acre.
A: Yes, you can be force-pooled. All they need to do is attempt to lease everyone before applying for a forced-pooling at the OCC. If you are force-pooled you will be given an opportunity to choose from several options of bonus and royalty, similar to a lease. The State (OCC) will decide exactly what those options are and if you do not choose one within the allotted time (usually 15 days) one will be chosen for you. Most often the options on a pooling order will reflect the same terms the State feels are the "going rate" for the area involved. My opinion is that $150 and 3/16 is actually about the going rate in this area, based on other recent poolings in this township.

The Oklahoma Corporation Commission (the regulatory body for oil and gas in Oklahoma) has a wealth of information available online relating to oil and gas activity and production in Oklahoma. You can look up such things as drilling permits, recent production information, well completion reports, forced-pooling orders, and anything else that falls under their jurisdiction.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
Oil, Gas & Mineral Lease bonus Asked 09/18/2012
Q: I have an offer to lease mineral interest on property in Somervill, Tx, S Lawnce League, 52 acres. Is there any way to determine if the bonus rate I have been offered is acceptable for the area?
A: Negotiating the lease terms in an oil and gas lease is much like negotiating any other contract. Most terms in an oil and gas lease are negotiable. Your ability to effectively negotiate provisions such as length of primary term, royalty, bonus, and protective clauses you might want to add is proportional to your knowledge of the area being leased. The more informed you are about the activity in your area, the better your bargaining position will be, and the better able you will be to determine whether the offer you received is fair or not.

For instance, if your acreage is within a mile or two of some recently-completed prolific oil or gas wells, you can use this fact to empower your negotiations with a potential lessee. Most companies will not volunteer information that will help you negotiate a better lease so you need to arm yourself with such knowledge. It's crucial if you are to negotiate effectively.

In addition to finding out what's going on in your area, you could also contact or visit the county clerk's office or abstract office in the county where your minerals are located and check for other companies that may have filed leases in your area recently. Their address would be on the leases they filed and you could probably find a phone number for them from that information.

These days, many sites on the Internet can provide you with information concerning leasing activity, well completions, production, drilling permits, and forced-pooling orders (in states that allow forced-pooling.) The Texas Railroad Commission has a wealth of well information available online concerning oil and gas activity. You can look up such things as drilling permits, production information and completion reports, all of which will help you determine how "hot" your area might be and thus give you a more knowledgeable position to bargain from.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
Drilling Activity in Custer County, Oklahoma Asked 09/18/2012
Q: I have spent a lot of time on the Internet trying to find any information relative to drilling in Sec 12 Township 12 North Range 17 West. Can you tell me if there has been any activity on this land? and if so, identify a time frame? I cannot find any (free) information regarding this subject. Thank you.
A: There is no current permit to drill a well in 12-12-17 or any of the surrounding sections. There is no current production either, though a "dry hole" was drilled in your section back in 1983 by Sohio Petro Company. It was plugged in 1984.

The Oklahoma Corporation Commission (the regulatory body for oil and gas in Oklahoma) has a wealth of information available online relating to oil and gas activity and production in Oklahoma on their website. You can look up such things as drilling permits, recent production information, well completion reports, forced-pooling orders, and anything else that falls under their jurisdiction.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL

Leave a Reply

You can use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>