Replies to This Discussion

Permalink Reply by Gary Carter on July 31, 2012 at 13:56

Kay, I assume you don't live in the area. If you did, you could make a trip to the courthouse and get the copies of the leases. Alternatively, you might be able to get the disbursement firm to give you some help. Best case would be if they would send you a copy of the division order title opinion along with the lease. Doesn't cost much to ask.

If you are not adverse to hiring a landman to research it for you, there has got to be several available. I'm not really in that camp, although I've done that kind of work on my own account, however there are some on this board that could steer you in a direction or two.

Permalink Reply by GoshDarn on July 31, 2012 at 14:01

Kay:

Since you're receiving royalty checks, you could contact the operator or operators who have your family land under lease and ask them to mail you a copy of your lease.

In the past, such requests have been known to be fulfilled by certain O&G land offices.  (Then again, in these strange times per operator consolidations and buyouts -- don't be surprised if you're stonewalled or sandbagged.  {But, y'know, it doesn't hurt to try.  Maybe you'll get lucky.  Maybe you're fortunate to have a reputable operator.})

You can also go to the county courthouse (where all leases are kept on file) and ask a helpful clerk to track such down and make copies for you.  You'll need to take the section, township, and range of the land in question, and possibly any deed info (or tax records) so as to be sure you can explain the exact location of the land to the clerk.  It's also helpful to have the exact legal name/s of the family member/s who owned the land when such leases were signed (and a rough date of such signing, if possible).

Finally, if the above attempts fail, you can hire an indie landman and thus pay him/her to do the research for you.

Good luck.

GD

 

Permalink Reply by Kay Turner on July 31, 2012 at 14:48

I was told by each of the 4 companies that I receive checks from that the leases would be so old and would have passed through so many different names that they would be almost impossible to locate. That was pretty much verified by a man who owned a title company in Columbia county.... He also wanted to buy my leases. How badly do I need to locate them?

Permalink Reply by Gary Carter on July 31, 2012 at 14:56

I would think that if you're getting paid, there is a documented chain of title throughout the changes of ownership. That should be indicated on the division order title opinion, if you can pry a copy from them.

Permalink Reply by GoshDarn on July 31, 2012 at 18:45

Kay:

As to "how badly you need to locate them" -- I can only give you a rough spitball guesstimate of why there would be a need to get copies of the old leases, per my over 25 years of signing leases (with numerous operators, both big and small) and thus now managing two rather complex mineral estates for both sides of my family tree in NW Louisiana (being as both of my grandfathers were farmers).

The short answer is, if no one in your family has ever complained or has never noticed any irregularities in the royalty sums (beside normal depletion and standard deductions) -- then the need to get copies of the old leases isn't a critical must-do due diligence.

Now, if you have some sort of suspicions, possibly thinking something does not smell right, or if you proceed to do some quick internet research on your family's operator/s and thus find any sort of recurring brouhaha by other royalty owners who are suing or who are being upset with a crooked operator or if your neighbors are complaining about the operator/s -- then you have to think about the cost-to-return on spending more time and effort to get your hands on the old lease/s.

In my family's case -- when the Haynesville shale came a callin' and when the big money and super wells heated everything up and sent "the fever" through so many folks . . . there was a clarion call to dig up the old leases that were signed by the previous generation since a good bit of our land was under hbp (held by production).

So, a lot of time was spent digging, digging and stirring up the old leases.

Guess what?

Nothing changed.  There were no so-called smoking guns (more or less).  The operators were paying as they should be paying under the terms of the old leases.

That said, over the years certain operators have made mistakes on the administration of minor issues and have been admonished to pay up what's owed (possibly through dumb unintentional errors), but these were small technicalities (in general).

So, per my own family's experience with numerous operators -- once the payout royalty deck is set up and once the land title is properly divvied up via an accurate division order, the only possible fight can get down to the percentages of the associated deductions and also the associated "fair" wellhead price of the commodity/s being extracted.

Oh, and there's one more caveat.  If you're referencing a good many acres with a somewhat hefty royalty pay -- then it never hurts to spend some of that "mailbox" money on nailing down the facts with a pro researcher/lawyer to make sure that it's all on the up-and-up.

In other words, if it's several thousands of dollars each and every month (just for yourself) -- then why not spread out the cost to hire a pro (between all members of your family) and simply ask a good O&G lawyer how much he/she would charge to trace the particulars down and write you up a report?

Note:  The key would be not to pay by the hour, but to have the pro agree to a "fixed contract" price (to be shared by all members of the family who are receiving royalty pay).

Plus, you could also save some money (and not use a lawyer) by hiring a good landowner friendly landman to do the research.  If you were in La., I could tip you to a few lawyers and/or indie landmen (a few who are both landmen and lawyers, all rolled into one).  But I'm not up to speed on Arkansas.  Maybe Mr. Aubrey Sanders can advise you (and that's one GHS member you can trust, IMHO, since Mr. Sanders is both a landowner and an honest O&G insider).

Now, if your royalty income is say maybe around $600 a month or so or less -- possibly the cost to hire a pro would not be too cost effective since the likelihood is (if you're dealing with a reputable operator/s) that nothing dishonest is going on.

Never easy.

Best of luck to you and yours.

Take care.

GD

 

 

 

   

 

 

Permalink Reply by Kay Turner on August 1, 2012 at 1:49

Thanks so much for taking the time to reply. I didn't understand a lot of it but I'm gonna try to learn more. I am mostly dealing with Bonanza Creek. Haven't seen anything negative on them so far.

Permalink Reply by Big Little Oil on August 1, 2012 at 2:30

Guy "pretty much" verifies that "the leases would be so old and would have passed through so many different names that they would be almost impossible to locate" and then solicites you to buy those very leases he describes as arcane.

 

This is a huge red flag against doing business with this "title company" man and ever believing anything he told you. This guy assumes he he came across a sucker.

 

If a company is sending you royalty checks, then they and the state have a very clear definition of the lease obligations. Bona Fide copies of the leases are available from your counterparties and the state and local governments.

Permalink Reply by Skip Peel - Mineral Consultant on August 1, 2012 at 2:37

I agree with BLO.

Permalink Reply by DavidR on July 31, 2012 at 14:08

A couple of things I can think of....

If they're "producing" interests, you should be getting tax statements from Columbia County on them.  You may be able to find some useful information here:

http://www.arcountydata.com/search.asp

Non-producing are more complicated because you may not be getting tax bills on them so you might not even know they exist. Ideally, the will under which you inherited the property will have these details or perhaps the will of a relative before would. 

When you know the name of a well, the Arkansas Oil & Gas Commission site here:

http://www.aogc.state.ar.us/JDesignerPro/JDPArkansas/default.htm

May have data on them, although some of the information on really old wells is sketchy.  Anyway you go about it is time-consuming.  I found it easier to start with the producing interests because they're easier. Also, we were lucky in that my wife's family had created a document years ago that detailed how all the mineral rights were split up and that document had been recorded at County Records.

Good luck to you running this stuff down.

DavidR

 

Permalink Reply by Kay Turner on August 1, 2012 at 16:55

I have no plans to sell. They have been in my family this long and I'm not gonna be the family "fool"! My dad would come back from the grave and haunt me for sure... And they didn't even come through his side of the family. But he was always very protective of them and said they would be worth something someday! I don't live that far from Magnolia and will probably spend some time there this fall and see what I can find. Trouble is I still won't know anything about them or what to do with them! But at least I know where to ask! Thanks for all the advice everyone! Do any of you know anything about Bonanza Creek?

Permalink Reply by DavidR on August 1, 2012 at 17:13

Kay you may want to check recent AOGC reports here:

http://aogc2.state.ar.us/WIPE/

(Click on the folder for each year).  Bonanza Creek has a ton of activity in Col Cty and has for the last year or two.  I don't know that it will help you other than giving you some sense of what and where...

Permalink Reply by robert edwards on August 1, 2012 at 18:34

kay, i am in the same boat as you.  i inherited land in union parish that my family owned.  they left louisiana in the late 20's, early 30's.  have shallow production on land but have a hard time finding out info from companies that lease.  you have been given good info by others and i think the courthouse is the best place to start.   louisiana has been very cooperative,  oklahoma is another animal, as far as o/g companies.  not your problem but check in courthouse.  i know about swn and devon, a little bit, but not bonanza creek.  good luck to you.

• ‹ Previous
• 1
• 2
• Next ›
• Page