I am just very frustrated and surprised at what I am learning...
I found out a year ago through an energy company that my father passed away (I never knew him so it's kind of an odd situation).. and that he did not have a will but that he did own some mineral rights and they were trying to find living heirs.
So since I was his only daughter, they needed me to obtain his death certificate in order to transfer the mineral rights to me. I found his death certificate, mailed it to them and here we are a year later (seems like it's taken forever) and now I have found out that it is being split among 3 children (that again, I had no idea about... except one son that he had adopted)..
He died in 2008... so these funds have been suspended for the past 4 years. Found out it was for 704 acres of gas.. and was thinking this could possibly be a decent amount.
I find out today that the check being sent to me will be roughly $600.00. ??
That just seems like hardly anything at all... so they must not be producing much?
Then when I asked the company about the lease and how long the contract was for and if I would be receiving that information. She made it sound like that is not normally information they give out but if I sent her a request in writing, she could look it up and send me a copy... and made it sound like as long as the wells were producing that the lease would continue indefinitely?? It just didn't make much sense to me and I thought I would come here for advice...
Also... if they are truly not producing that much... I would be tempted to sell them. Just not sure what to think at this point.
Where are these minerals located (State, etc)? You might be able to obtain records from the State Agency that regulates oil and gas in regards to the lpast production of this well. Dry gas prices have been extremely low over the past couple of years and the original well production might have low production figures. These factors will have a direct impact on the royalties paid. From what you have said, the lease is held by production so as long as the well is producing, the company will hold the lease. In regards to selling, that is your decision but if you aren't in need of immediate cash, I would re-think that idea. If or when the price of gas rises, this well could provide a decent income for many years to come.
I believe Ms. Scott's minerals are in Limestone county Tx. I would say to do a good deal of research before deciding to sell, definitely get a copy of the lease.
Yes, immediately send the request in writing to them for any and all leases (contracts), division orders, and anything else for which you are now a party to - this will give you something to use to get some real information.
Dont even think of 'selling' your minerals till you fully understand their value, as there could be extremely valuable formations below those that are currently being produced. For example, 5 years ago, no one knew about Eagle-Ford, and its acreage is now worth $20,000/acre+ and more in many areas!! And now their talking about the Pearsal Shale below the Eagle Ford. - WOW!
Your mineral acres might be immediately re-leasable for deeper formations, for some really big $$, even if current production at shallower depths (perpetual 'shallow' lease), depending on wording of lease - you really need a copy of this. With all the new 'horizontal drilling', thats really only been going on recently (since 2008,2009), your dads old leases may not have taken full advantage to what the minerals might really be worth.
Ok, I will send a request for a copy of any leases or contracts. Thank you so much. Devon is not very forthcoming with information.. it's like pulling teeth to get answers from them.
Once I get some info, I will definitely do some investigating before I consider selling them.
Thank you all again for your answers and advice. I appreciate the responses. :)
I don't keep up with the bonus rates in the Eagle Ford Shale but I would guess that $20K/acre is paid on a rare occasion. There has been isolated incidents in the Bakken where it has been reported that over $10k was paid but again, these were isolated incidents. Eagle Ford Shale oil most likely trades higher than Bakken crude as transportation costs to market are probably much less. Again, I don't keep up with the internal structure of this play but that would be an important facor in my opinion.
Andrew Babcock said:
Why would Eagle-Ford acreage be worth so much more than Bakken acreage. You couldn't get $20k for any Bakken acreage that I am aware of.
I guess my point is that saying acreage is going for $20,000 an acre is...to say the least, misleading.
It doesn't serve T.Scott to hear such outlandish numbers as if she should be happy to get half that amount.
In Williams County, for a 38 stage, 2 section, well that is completed (but not producing yet) you will find landmen and brokers willing to pay $4,500ba at 20% royalty. The auction prices are nice but the royalty is not.
Do we know the size of T.Scott's acreage yet? makes a difference I imagine.
Maybe the Eagle Ford is amazingly different than the Bakken, but the savings on transportation cost would not, in my opinion, account for such a huge difference in bonus payments...( I also believe the transportation issue is temporary and improving all the time)
Also, if you know his name, you can search for county records under his name; should be able to find deeds, and oil leases; all this is public record.
Seems to me, that if there is already 'royalty' checks in suspense, due to you since his passing, then they don't need any lease to be signed by you. The minerals will be 'held by production', unless someone is trying to drill into another production strata, in case which a new lease 'might' be required; be careful sighing anything; there are lots of tricksters out there these days that can trick you into signing over minerals with a 'fake' royalty check. Ask them to send the lease, and any royalty checks due, but don't sigh or cash anything till you get it all checked out by someone trustworthy (or at least a dis-intersted 3rd party). Looks like this area is 'historically' dry gas, which is down right now, but could easily become MUCH more valuable, in near future, or re-drilled to reach liquids.
You don't need to be confused, or frustrated; you just don't have enough information, yet; this site and folks on it can help; wer're mineral owners too, and are also tired of being tricked, deceived, and 'snookered' into unfair deals by those that are withholding information from us (you hear that Chesapeake, Devon, etc . . . .) (btw, did you hear Cheaspeake CEO brag about 'getting mineral rights for pennies on the dollar what their worth . . . !!).. . .
Perhaps the check being sent to you is only $600.00 because they are paying shut-in royalties, which most leases require operator to pay when they have temporarily stopped production on a well. Just a guess for the low amount. Probably they have drilled the well and shut it in to wait for the pipeline to get there or to wait for commodity prices to climb. Either way, if they have drilled the well already, you would be foolish to sell your minerals. Find out if the well has been drilled successfully. If so, then you are likely to start receiving a royalty stream of income whenever the Operator decides to "turn on the faucet," so to speak.