Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on October 18, 2012 at 3:09

Few wells would be drilled in parts of Texas if a permit or actual drilling had to wait until all ownership interests were tracked down.  Think about the fact that you had no prior knowledge of your father-in-law's ownership interest and why that might be.  Texas laws allow the mineral estate to be severed from the surface estate in perpetuity.  If the minerals are not being produced the heirs pay no taxes.  Several or often many generations pass and knowledge of ownership is forgotten.  Also the ownership interest is divided with each succeeding generation.  It is quite common for ownership interests to be very small fractions of the original whole. The minerals from an 80 acre farm sold in the 1920's with half the minerals reserved, or 40 net mineral acres, could be owned by 80 heirs who each own an undivided interest equal to one half acre. Let's say the 40 undivided mineral acres with 80 heirs is one twenty-sixth of the acres in a drilling unit and much if not all of those other twenty-five/twenty-sixths are similarly undivided interests.  Texas like all states with significant hydrocarbon production wishes to maximize its revenue from drilling wells and therefore creates regulations and laws that recognize the time, expense and due diligence involved in tracking down and contacting 100% of the ownership interests in a drilling and production unit.  Now go back to my first sentence and imagine that a significant number of the mineral acres in a unit are owned by families that did not file successions or judgments of possession down through the generations basically leaving no paper trail by which to track down current heirs.

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Permalink Reply by gummipuppe on October 18, 2012 at 4:07

Thank you for your reply.  Please understand that I am not shooting the messenger but I am angry with the shenanigans these oil companies get away with.  We own other property which has been drilled recently almost three years into our lease.  The oil company "forgot" to pay us more than $100,000 until one year after others were paid and we found out about it by coincidence.  We knew there were mineral rights, we did not know they were being leased.  It was a matter of 160 acres. Not exactly a forgotten sliver in the corner of someon'e property.  I am writing this to show others who are just starting out in this oil business visa the big boys how treacherous some of these oil companies are.  We had to get an attorney to get our money. (without interest).  As for this 20 acres, surely they had to track the records in order to get a permit in July.  Our names and addresses and phone numbers have been up to date in the court house for three years since they pulled the stunt with the other property.   Are you saying that they can get a permit without pulling records to do so and then drill without any contact until they are done?  Do I not have leasing rights?  My father in law's name is on the pool on the permit.  He has two heirs.  Your answer to me is that they are really put through the wringer finding everyone connected.  I call that the price of business.  Even though I apopreciate your reply, it is all for the company and none for the owner.  What you are saying is that they drill a hole hoping to collect millions, and then offer $1,000 per acre, while others collect $3,000 to $5,000 per acre.  Forgive me, but I don't see their rights to that.  They put a well right in the middle of a 20 acre tract, 280 being in the pool.  Surely they could have found us.  They did yesterday.What I understand from your reply is that they can take the rights to drill, not pay you, extract the oil / gas, not have to contact you at any time, during and after and just ignore the lease owner until they get around to it just in case there are too many heirs.  So, one has no rights as to who you lease to?  We have to take the company that gets there first even though they are very low bidders?   Incidentally, my father in law died 25 years ago, and there was a very good papertrail to the Cotulla court house.  We are one generation after he bought and sold the property.  As far as why we did not know, is that my father in law died in 1988 and forgot to tell us.  The oil company did not forget to look it up, they just forgot to pay us again.   My other question is that we have executive rights.  Should I just throw those out the window and let them do what they want at the cost they want?  Again, thank you.

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Permalink Reply by Skip Peel - Mineral Consultant on October 18, 2012 at 4:16

When you provide insufficient details in a question you shouldn't complain that the answer is not accurate.  You obviously have significant mineral holdings and are unfamiliar with Texas mineral statutes in which case you need experienced professional assistance.  I suggest that you engage a qualified O&G attorney.  Leasing minerals is not a morality play, it is a business transaction.  Don't expect the industry to look out for your interests.

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Permalink Reply by gummipuppe on October 18, 2012 at 4:38

  I am as confused as most of the people who get taken here,.  I did not say that your answer is not accurate.  I said your answer to me is pro company only, for whom you work  I wanted to know how other people handled this.  I certainly do not ask an oil company to look out for my best interest.  That is absurd.  I asked a question on this forum.   The last comment you wrote made sense but I would like to go to an oil and gas attorney with my eyes open as well.  This forum is for the consumer,  let's call him David ) not Goliath.  It is to gain information, for those of us who feel we are in a sinking boat at times.  It is supposed to provide information.  We are supposed to share without being judged by not having  "enough oil and gas knowledge".   You went to school for this, we did not.   I have had comments on how well I asked the question.  Where is the insufficient detail?  The first company "forgot" to pay us.  Would that not make you suspicious?   I brought that up because you call their actions "due dilligence. and a hardship"  I am sure it is illegal but did not pursue it because  no one likes a fight like that.  I thanked you for your reply.  It did not answer any of my questions such as what are my rights and how do I go about finding out how far along this is and why I was not contacted.  Here was the question:  Can an oil company just start a well, then ask you if it okay months later and negotiate bonuses when they get around to it?  Has this happened to anyone else?  How can I find out how far along this is?  Thank you!

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Permalink Reply by Skip Peel - Mineral Consultant on October 18, 2012 at 4:58

I have never worked for an O&G company, directly or indirectly, in my career.  I work for land and mineral owners.  In a manner of speaking I am the industry's adversary in that I perform research and provide lease negotiation strategy for lessors.  This forum is for anyone who cares to participate within the rules of the site.  And it's owner, Keith, is interested in a balanced approach to providing fact and opinion from both perspectives. 

I will be happy to offer an opinion once sufficient detail is supplied.  You are bringing up multiple issues without including facts needed to provide an answer.  Concerning your last question please provide some detail.  Is the drill site on your mineral interest?  Or were your minerals simply included in a drilling unit?  Were your minerals in an original unit or were they included by a later expansion of the unit boundaries?  What company offered the lease?  What company is drilling the well?  In what county and survey are the minerals located?  I would refer you to the Texas Rail Road Commission database group here on GHS if you care to learn how to track drilling.  Since that takes a while to master I suggest that you contact a knowledgeable member in the E TX groups who can help find out the current status of the well in question.  I would suggest jffree1 or dbob.

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Permalink Reply by gummipuppe on October 18, 2012 at 5:09

Can I email you please?  Thank you 

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Permalink Reply by Skip Peel - Mineral Consultant on October 18, 2012 at 5:26

I posted by email address on your page.  In doing so I noticed that Ben Elmore is a "friend".  He can provide the professional assistance that I recommend.

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Permalink Reply by gummipuppe on October 18, 2012 at 5:43

yes thank you.  That was my intent.  I just wanted to know how other lease holders handled this before I spent money. 

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Permalink Reply by Skip Peel - Mineral Consultant on October 18, 2012 at 5:59

Every case is unique.  I suggest doing as much as possible to gather the basic facts yourself.  You can also hire an independent landman to help accomplish that task because they are less expensive to engage than an experienced O&G attorney.  When you have all the basic facts in hand an attorney can answer your questions and suggest how to proceed.  Once you have the facts and a little help from a landman you may understand your situation better and determine that you do not need an attorney. 

Permalink Reply by Krkyoldhag on October 18, 2012 at 3:36

You explained this as well as I have ever read. I have a friend in Marshall that has learned of ownership of several areas she owns mineral rights all over Texas.  Her father had bought, loaned on, sold and held mineral rights all over Texas back in the 50's.  The amazing thing is that the oil companies have been able to find her.

Some of these rights she didn't know about til Division orders were mailed out.

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Permalink Reply by gummipuppe on October 18, 2012 at 4:43

Thank you very much for your kind reply.  My frustrations with this forum is that one should know the answers before one asks questions.  I have been on here for three years when no one had heard of Eagleford.  There were a lot of lease holders, totally confused.  We all muddled through it.  Then came the people who profit from this.  Lots of opinions that are not pro lease holders.  have a wonderful day.  Thank you

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Permalink Reply by Dion Warr, CPL on October 18, 2012 at 12:26

Krky:

Chances are that owner entries for your friend's father (and her as his heir) are present in records and BA databases of a myriad of companies that have drilled all over his former stomping grounds.  In these cases, where an owner is prolific enough to have become virtually "known to everyone", companies who are setting up new pay decks will attempt to match owners in their databases and come across all the current information that they need - they've paid them time and again.

Even when new companies acquire interests in and around producing properties from the older companies, these records (with the most current addresses available on file) will survive the transfers. For direct heirs of such individuals (particularly if the ancestor kept good records and inventory of their mineral conveyances), the worst thing that they might generally have to put up with is the occasional check made out to the deceased, at which point one has to respond to the payor with the facts about the deceased along with copies of probate or affidavits of death and heirship, send it back, and wait for the transfer orders to execute and return before receiving proper payments.

Gummi's case is different.  It would appear that Gummi's in-laws had spotty records of such transfers and possibly no list or inventory of mineral interests owned by the father-in-law in the vicinity.  It could very well be likely that such interests alluded to here had not been leased, explored or produced in a number of years, therefore there is no "familiarity" to either the family nor the O&G players as to the interest.   Thus, these interests are subsequently uncovered by more in-depth and diligent abstract and mineral title searches which are performed at a time closer to anticipated exploration and production.

 

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