Interesting.....
Mom purchased property that included the minerals. It was included in a gas unit, but she did not know it. There was an oil and gas lease on the property and the original lessor isreceiving royalties from production. When he sold the property, he signed an affidavit of non-production stating the lease had expired under its own terms due to no activity on the land (required by title company). The lease specifies production from a pooled unit will extend the term of the lease. Who is now entitled to the royalties on the minerals since the tract is pooled with the land where actual well is located? If the lessee is notified of the sale and a deed is supplied, don't they have an obligation to begin paying mom rather than the previous owner? The affidavit of non-production is totally irrelevant since the lands were pooled prior to the end of the primary term, right? Mom is now, effectively, the lessor of the lease, right? Opinions/thoughts/ideas/questings
Dear Ms. Hartwell,
If there were no mineral reservation into your mother, she received the interest of the Grantor of the deed into her. If there is an existing lease, then the oil company needs to be contacted to have their records updated. This is required under the terms of the lease existing at the time of the transfer into your mother.
You would have an action against the Grantor in the deed to your mother for a return of royalty dollars received.
Things change if the prior lease had expired by its own terms prior to the creation of the pooled unit.
Each of these items are totally fact specific.
Best
Buddy Cotten
Thank you for your reply. There was no mineral reservation and the oil company was contacted. In a letter, they pretty much said "sorry, we are paying someone else and if you have any questions let us know". I guess the interest is small enough that they don't want to deal with it. What they don't realize is I won't give up until they pay my mom. Since the former owner is still receiving payments, I know the unit has not been dissolved.
Thanks again!
No one would be able to answer the last question unless they read the deed.
None of the rest makes any sense, other than the title company wanting to put a cloud on the title, which they wouldn't want to do.
If the former owner is receiving royalty payments, an 'affidavit of non-production' would appear to be false. Unless the entity that sold it to your mother didn't have the minerals and wasn't aware of any production. As Dave said, a person would need to read the deed & see what was actually conveyed to your mother.
The operator acknowledged the former owner is being paid. I have all documents of record regarding ownership (short chain of title, thankfully!) and am sending them to the operator via FedEx. The former owner signed the affidavit stating no operations have taken place on the property covered by the lease, therefore, it had expired. Perhaps he did not understand that pooling, as defined in the lease of record, will keep the lease in full force and effect as long as there is production from the unit.
A lot of it also is confusion about the chronology. Earlier, you seem to indicate that the operator was informed of the change of ownership, and that they told you "sorry". Why would they want to ignore a change, and not pay your mother? (if she acquired the minerals) You made it sound like a battle has been in the works. Now, you say that you have all of the supporting evidence, and are going to send FedEx to operator. Thought you had already done that and they told you "sorry"?
In any event, there is a cloud that needs to be removed for the title searcher, or something to indicate that non-production affidavit had no basis in fact.
I only sent the deed where my mother got the interest. I am now going to send prior deeds to verify everyone's ownership since 70's. No retention of minerals in any of them. I have no idea why they did not ask for any further information or acknowledgement of new ownership. The operator said [paraphrased] your mother is not in our records, xxx is being paid on that tract, if you have any more questions please contact us. Two sentence letter. When I was running title I came across the affidavit and it was dated the day before the sale to my mother was closed.
It still really doesn't make any sense. If they were paying X and X sold to mother without reservation, then she would be in their records. You just mailed them the deed.
She wouldn't be in their records unless they were notified of the transfer of interest, which they weren't until a couple of weeks ago when I sent them the deed. I agree, it makes no sense at all. The letter did not in any way say they would change their records and begin payment to my mother. No Division Order, no request for ratification of the lease, etc. That's why I am sending another letter with more backup
It's still superfluous. If they are paying X and X sells to your mother without mineral reservation, and you sent them that deed, that should be sufficient.