So lets say hypothetically I signed a lease, but hadn't completed a probate. It was obvious I was the heir, but took the bonus money and didn't realize the whole probate thing. Now another company wants to lease and is saying that since the probate wasn't done I didn't own it to sign a lease to begin with. Is this true? How does that all work? This is in North Dakota.
Cara, your first lessee can lease from you as the heir apparent, and it is a valid lease. If the first lessee has not recorded your lease the second lessee could beat them to the punch and record first, as ND is a race to record state. The second lessee would have your lease and you would have to return any payment from your first lessee. Cara, For your sake I wish you would take my advice to slow down, study, get help. You can tangle your mineral affairs to the point that you will have to pay lawyers out of your own pocket to untangle it.
Thanks for the advice! So what would be a bad lease? Just not paid enough or the terms were bad?
I agree with Joels post above. If you get multiple offers from multiple entities you can post all the offers and all the entities, and nobody could tell who made what offer. Who is leasing in my area and how much are people getting offered are two of the most common questions. I don't have a problem with saying who offered me what, my business can stand scrutiny by the general public. I have 2 parcels yet undrilled but no offers on them yet. One parcel in Dunn county has been permitted multiple times for the last 2 years and changed operators , it is currently spaced by Enerplus, if I am made an offer I will post it in the Dunn county forum as I did with my offer from KOG at the end of 2010 for $3,000 an acre and 20% royalty with the drillbit in the dirt. Information is a two way street, if I don't know where your minerals are in ND I cant tell you how your neighbors well has done, and frequently people already have wells drilled and aren't aware of it yet. The operator doesn't tell you that they already drilled the well because you might get the crazy idea that they owe you money for your oil or that you might negotiate harder for better lease terms. Keeping things secret is usually to the oil companies advantage and not the mineral owners. If you are in ND and you think your claim may have lapsed, I wouldn't say a word until I had a fresh statement of claim. If your claim is good your ownership is public record, and I think it's highlly unlikely that anyone will sneak up in the dead of night, dig a 10,000 foot hole and carry off your minerals. In fact you can't get a lease offer until someone knows where your minerals are and that you own them.
Joel, I take issue with your comment above regarding landmen. Below is that comment. " Check everyone who responds to you against the landman list on this website, take what a landman says with a big block of salt, not all are bad, most are sadly." (Quotation taken from Joel"s statement above).
I’ve been a landman since 1979 and the vast majority, like 97 percent that I’ve encountered over the years, were hard working, ethical and persons of high integrity. It is unfortunate that you have had such a negative experiences. I would be interested to know how many landmen you have known, in what capacity and what took place for you to have such a tainted attitude. If you are referring to the persons/companies who attempt to obtain minerals far below market value and prey upon uneducated mineral owners, this is done unfortunately by a variety of people and professions, including but not ltd to lawyers, geologists, engineers, other mineral owners, and yes, sometimes landmen. But to make a blanket statement about landmen as you did is most unfair and highly offensive to this landmen who adheres to high standards of integrity and ethics. I am here to help people. May consider purchasing minerals if someone is interested in selling but this certainly doesn’t mean that I am “bad”. Have you been to an AAPL meeting, seminar, Nape, or other venues where you would be exposed to large numbers of landmen? I think not based on your statement. It seems your exposure to landmen has been severely limited and thus, your generalization is highly unfair. By the way, what is your profession?
Ms. Wilbanks, I will not defend Joel, in large part because before I came to this forum, after having dealt with dozens of landmen for my property in ND, I would have said he understated the case. I used to literally tell when a landman was telling lies by the fact that their lips were moving. When I dealt with KOG on the one lie and you're out rule, it didn't take me long until I was talking to Lynn Peterson (president) himself. I have encountered some landmen here who I believe are ethical, but then I have never had any landmen here trying to lease my property. I can say that I'm certain that 100% of the landmen I have dealt with who were trying to gain control of my mineral acres in ND were not ethical. All I heard out of them were lies and when I would not lease to them, they tried to gain control of my acres by committing fraud. Between my brother and I we executed 3 leases and we were never paid bonus for any of them. I got one lease released by informing the lessee I was going to sue, one I am in the middle of a lawsuit right now, and we will start the final suit for fraud after the current suit is finished. Ms. Wilbanks, I'm thinking you have never worked what I consider the landman sewer of ND. We are talking about ND in this thread. Ms. Wilbanks, does not the very title of this thread tell you anything ? A landman, telling Cara, that the lease she has already executed and received bonus for, is not valid, because the probate hasn't been concluded yet. Do you think that landman is telling Cara the truth ? I'd like to ask the question, do you Ms. Wilbanks, think the landman telling Cara the lease isn't valid is an ethical landman ?
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RWK: I’ve never worked ND. Where are these unscrupulous landmen coming from? How sad. Trying to get a piece of the pie in a very hot area by any means. I am VERY sorry to hear that. Honestly, I’ve not been out in the leasing area in several years. More recently I was in-house preparing land for drilling. I am not sure what to think about Cara’s case. It could just be an ignorant landmen. Friends that are still out in the field in hot areas have advised me that there are swarms of warm bodies being placed by greedy brokers who claim to be landmen and yet are totally clueless to the ins and outs of our profession. RWK, I would be interested in knowing more specifically what lies were told and the act of fraud. I am now remembering unscrupulous persons in the courthouse who would be looking over my shoulder trying to see what section I was working most likely with the idea of buying leases to turn or retain with a working interest. Some companies also had their people going through trash bins outside the hotel to gain location information. On the other hand, I’ve also had mineral owners who have claimed interest in minerals where title stopped yrs prior and no will or probate could be located and then later determining there actually was a will, a probate, in which the individual received one dollar and other heirs were named as successors to the mineral title. This one individual was a highly respected attorney and had been leased for years as the sole owner to mineral interests scattered throughout the country. The atty signed off on an affidavit of death and heirship as the sole and only heir to this interest. Once determining the actual heirship I contacted the oil company as well as the various other landmen who had leased this man over the years with the hope of stopping the flow of money to this horrible person. I also contacted the actual heirs to the estate, explained to them what was going on, what they needed to do as far as filing instruments in the various counties to evidence their ownership. Further, I offered to do the work for them for free I was so upset about this situation. I guess where there is money to be made there will be some unscrupulous individuals. I hope everyone experiencing unethical and illegal practices by landmen/companies will utitlize the resources available in an attempt to stop these incidences, ie BBB, etc. This forum is a great place. RWK, I tried unsuccessfully to find your post on Diamond. When I worked for a mineral/royalty company, I was the first landman/division order person to interact with accounting. I developed a black list of companies who would unnecessarily and wrongfully withhold revenues, etc. I gave the list to acct’ing and they would report to me each month whether they paid and if so they would copy the revenue detail for me to review. If they had not paid, I would call them each month. I worked relentlessly against these companies and recovered a great deal of revenue plus the statutory interest.
PS. If they are members of the AAPL you can report their unethical and illegal practices to them and their membership may be revoked if they determine your claim is valid. Please do this. Although I would guess that the vast majority of these parasites belong to the professional associations such as AAPL which requires very high standards of us to maintain a membership in good standing. The more reporting that is done against these companies the better for all mineral owners. Also, I have never lied to a mineral owner when leasing. My reputation was at stake and it certainly is not worth jeapordizing. You never know when you might be back at these mineral owners door seeking another lease. I also warn landmen that may appear to be unscrupulous that I own extensive mineral interests, many unleased, and that they should keep that in mind in their dealings with me.
Ms. Wilbanks, my recent post on Diamond Resources can be found in William Kemp's "Kiowa county lease offers; anyone using attorneys to represent their interests w/land companies ?" My responses are on the second page. If you have difficulty finding it , it's fairly recent on my home page, only have to click the more button one time, possibly two if I make many more posts before you look.
Mr Williams are you telling me all the people who are having their royalty held up for lack of a probate, who have signed leases, many who signed leases I think they now regret, can get out of their leases because the minerals were not yet properly conveyed to them before the lease was executed ??????????????? What about intestate laws ? Wouldn't Cara have trouble with the warantee of title clause if it were not struck from the lease she first executed ?
Cliff Williams said:
Back to the issue at hand...
If the lands and minerals have not been properly conveyed to you personally then the estate of the person who owned the minerals IS the owner holding the executive rights. Any leases that are signed by you would not properly convey the minerals to the oil and gas company. The second company could be right.
Landmen don't have to be evil, bad, or liars to just be misinformed and wrong about our complicated laws. The fact is that landmen are working in a world of laws that they have not personally studied and some have picked up more than others over the years.
Shoot, for that matter many posts on this forum have as much or more in the way of error than what I hear at AAPL events. Being an attorney who concentrates on oil and gas I help local landmen, landowners, mineral owners and find that they generally all have a good heart and are interested in doing the best job they can.
If a company is hesitant or just not willing to share information with the landmen and the mineral owner demands answers to questions the landmen just do not know it creates a real mess.
Landmen that have been in the business for many years are generally the more honest and straight-forward. Newer landmen just don't know all the facts yet but they are learning them. With the number of title opinions I write, I read landmen comments and interpretations of documents every single day and some documents they understand and some they just don't yet understand.
I'm for a little compassion all the way round and that is why I'm here. I try to answer the mineral owner and landman questions as straight forward as I can.
Cliff Williams
Cara, in Oklahoma, if probate proceedings have commenced, and an executor appointed, we would obtain a signature from the executor or personal representative to the estate. After that we would obtain an Order approving lease which was simply having the probate judge confirm. Under the warranty clause if Cara received compensation but was not an heir or successor to the estate she would have to return them.
On behalf of the oil companies, without them the mineral owners would not be receiving any compensation. Ideally the negotiation should be a win-win for both sides.
Cara, in the lessor space of the lease how was it worded? Cara as exec … Of est of …, dec’d?
Thanks everyone. This is pretty confusing. My attorney mentions the similar grey area and I did not warrant title in the lease. For the time being I don't think I am going to sign any other lease or if I do make sure it is worded as such to acknowledge the situation.
Cliff, that depends on the attorneys knowledge. Not all people/attorneys are made equal. If you have a real/estate/title atty you should be in good hands. Its really not a complex matter in Oklahoma, though.
Mr. Williams; I am very impressed with the knowledge and your willingness to help answer questions and clear confusions here on the forum, and so I am hoping you have any ideas where I might seek a position either within a law firm in No. Dakota or with a brokerage firm to do landman work? I have 14 yrs as legal assistant, 4 yrs lic. title agent, and 1.5 yrs exp and schooling as landman, and I prefer title searching. I hope this is not an inappropriate way to seek contacts for a position.
r w kennedy said:
Mr Williams are you telling me all the people who are having their royalty held up for lack of a probate, who have signed leases, many who signed leases I think they now regret, can get out of their leases because the minerals were not yet properly conveyed to them before the lease was executed ??????????????? What about intestate laws ? Wouldn't Cara have trouble with the warantee of title clause if it were not struck from the lease she first executed ?
Cliff Williams said:Back to the issue at hand...
If the lands and minerals have not been properly conveyed to you personally then the estate of the person who owned the minerals IS the owner holding the executive rights. Any leases that are signed by you would not properly convey the minerals to the oil and gas company. The second company could be right.
Landmen don't have to be evil, bad, or liars to just be misinformed and wrong about our complicated laws. The fact is that landmen are working in a world of laws that they have not personally studied and some have picked up more than others over the years.
Shoot, for that matter many posts on this forum have as much or more in the way of error than what I hear at AAPL events. Being an attorney who concentrates on oil and gas I help local landmen, landowners, mineral owners and find that they generally all have a good heart and are interested in doing the best job they can.
If a company is hesitant or just not willing to share information with the landmen and the mineral owner demands answers to questions the landmen just do not know it creates a real mess.
Landmen that have been in the business for many years are generally the more honest and straight-forward. Newer landmen just don't know all the facts yet but they are learning them. With the number of title opinions I write, I read landmen comments and interpretations of documents every single day and some documents they understand and some they just don't yet understand.
I'm for a little compassion all the way round and that is why I'm here. I try to answer the mineral owner and landman questions as straight forward as I can.
Cliff Williams
Ms, Stewart, I think Mr. Williams has been absent for over a year.
Okay, I am just trying to find respectful Landmen in ND that can guide me to find abstracting work. Thanks so much for your response.
Ms. Stewart, there is a landman forum. If you mouse over forums near the top of the page, the dropdown should give you the selection. I would think you would have better luck there than buried in the thread of someone else.
Sorry to show up late to this thread, but would the doctrine of "after acquired title" apply once the probate is approved by the judge? In other words, A signs a lease for three-year Primary Term, then a year later realizes that he did not Probate the Will in which he was bequeathed the minerals, then does so, wouldn't that first lease be valid as long as the Will is accepted for Probate and the judge signs off on everything before the end of the Primary Term?
Thank you so much for your help and direction..thanks so much!
r w kennedy said:
Ms. Stewart, there is a landman forum. If you mouse over forums near the top of the page, the dropdown should give you the selection. I would think you would have better luck there than buried in the thread of someone else.
I know, AAT appears to have never been considered at all. I also I believe that through the intestacy laws that title passes even if it may not be considered marketable title. It is a recurring theme that people in ND lease the minerals they inherited and the operator requires them to complete probate/s to collect royalty. If the leases were not valid until a probate were done, I would think that I would have heard of the court cases.
Pete Wrench said:
Sorry to show up late to this thread, but would the doctrine of "after acquired title" apply once the probate is approved by the judge? In other words, A signs a lease for three-year Primary Term, then a year later realizes that he did not Probate the Will in which he was bequeathed the minerals, then does so, wouldn't that first lease be valid as long as the Will is accepted for Probate and the judge signs off on everything before the end of the Primary Term?