Home Owner...Help in Getting a Lease Contract

Drilling is being done near my home and I, along with about 50 other home owners, have not been contacted to lease.  What steps should I take to get a lease agreement.  Home owner: The Briarcliff Addition T16N, R14W Section 8.  Thank you. 

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Permalink Reply by Ron Jon on April 30, 2010 at 7:26
Are you positive that you own your minerals?
Permalink Reply by Eva. J. Harris on May 2, 2010 at 9:47
Last I checked.....unless my deed paperwork is wrong and I pray not.
Permalink Reply by The_Baron on May 3, 2010 at 3:42
just because your deed makes not mention of minerals, this does not garuntee that you own your minerals.

As i said above, I have no knowledge of you chan of title or you situation. I just wanted to bring up the possibility that you are part of a larger servitude that could have had prescription interupted somewhere elses on the servitude.
Permalink Reply by Ron Jon on May 3, 2010 at 13:02
Eva:


If you do own you minerals, I agree with Skip; be patient and keep your head down and wait for them to find you (if we are talking about a subdivision lot & I assume we are). However, if you are worrying about it, I think it would be worth it to determine if you own the minerals or not. Then you'll know if there is anything to worry about at all.

1. Do you know what section your in? If so, would you post?
2. How long have you owned the property?

With the answers to these questions someone might be able to do a quick search on SONRIS and tell you what the chances are your minerals are tied up in an existing servitude.

Ron
Permalink Reply by The_Baron on May 4, 2010 at 8:02
I have done a quick look... The subdivision was developed quite some time ago. Not much production close by, but as I said I have nont done a good look at the title to see if there is a larger servitude involved.
Permalink Reply by Nadine333 on May 5, 2010 at 8:02
I was told that I could receive 100% of my royalties if I did not sign a lease. That is, once the well has paid for itself. I was also informed that I did not have to lease, and that by law, I am to receive all information on the drilling activity. Once the well is producing, and is paid for, I should receive a check for my share of the gas.
This should be less than a year from now.
Permalink Reply by The_Baron on May 5, 2010 at 8:15
Search this site for UMI (unleased mineral interest)

You will receive your share of production, minus expenses (the well will have monthly expenses in addtion to location, drilling and completion costs) and supervision. The large operators are masters at maximizing their money from UMI's....
Permalink Reply by Skip Peel - Mineral Consultant on May 5, 2010 at 8:19
Nadine, please keep in mind that low gas prices will delay payout and high decline will deplete much of the production before you begin to receive payments. And those payments will contain periodic deductions for the continuing operation of the well. Going unleased (UMI) is an option that's not for everyone. Especially those with a modest number of mineral acres. Many of us have participated in past discussions on this subject and you will find a wealth of opinion and fact in the archives. We are still waiting to hear personal experiences from those members who have made the decision to take the UMI route. It may take another year or two to get some meaningful feedback. Good Luck.
Permalink Reply by Mac Davis on May 5, 2010 at 11:44
Some people will tell you that if you are not leased, the production company will cheat you out of most or all of the royalties you are legally entitled to. If you want to challenge the production company's numbers, you will have to take them to court. Taking them to court probably won't pay off unless you have a big plot.

I haven't been through this myself, so I can't say how true it is. There are a lot of liars with ulterior motives on both sides of this question.

Definitely don't be in a hurry to sign a lease, especially if you have an acre or more. Especially, don't be in a hurry to sign the standard lease form. The "standard" lease forms are designed to cheat you.

How many acres do you have?
Permalink Reply by Love Horizontals on May 5, 2010 at 8:12
If you and your fellow neighbor homeowners have confirmed you own the minerals, then the best financial approach is for you to all unite and form as large a block of acreage as you can. The larger the block of acreage the more negotiating leverage for you, the lessors. Then collectively have your own oil and gas lease written for the oil company to sign versus the other way around.
Permalink Reply by Skip Peel - Mineral Consultant on May 5, 2010 at 8:27
Groups can provide advantages however the membership should be limited to the section or sections that a company wishes to develop. Too many groups have had negative experiences by placing their emphasis on numbers. Location is more important. Including mineral tracts that are located outside of the section or sections that the O&G company is interested in developing in a group can have unintended and negative results.

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