I ran into this wonderful sleight of hand with another member, she asked for a cumulative shut in of 2 years total and she thought they had agreed and she executed the lease and when she read it over again she noticed that cumulative had become 2 years CONSECUTIVE and of course that made the clause virtually worthless. She did call to complain and they told her "Oh yes, that does make a difference, but there is nothing that can be done about it now". Let me add, subtract change or rearrange 3 words in a paragraph and I think I can change it's entire meaning. I might be able to change the meaning of that paragraph by making a tiny change in another paragraph also. Read revisions carefully. On the other hand, you might recreate your own that reads the way you want it and return it and see if they notice. It cuts both ways.
I wanted to post some updates. First, I contacted both the Antero landman and CNX for clarification on the 97 acres vs. the 47.8 acres the Antero landman keeps mentioning in their emails. Our mineral rights are for 1/6 of the 97 acres.
CNX replied, saying "Dominion and Antero did a farm out agreement. Meaning, Dominion allowed Antero to drill on active leases that were Dominion leases. Such leases are now CNX leases. I would think Antero is only going to use the 47.8 for their well. At this time CNX isn't using the remaining 49.2 acres. That isn’t to say in time that they won’t drill on it."
Antero's landman also replied, saying basically that "The total tract of land is 97 acres… we are modifying 47.8 ac because we were unable to acquire the rest of the acreage from Dominion when the acquisition took place."
From what I can see from the OOG website maps, the wells are clustered together in one part of the property, probably the 47.8 acres.
Good news ... I received a call today from one of the other mineral rights landowners (a descendant). She has already signed a lease, and unfortunately I couldn't talk to her in detail at the time. She didn't sign a lease with the same landman that contacted us (she was contacted by 3 of them); she did say that he had contacted her, though. She lives in WV. She kindly offered to provide me with any information that I needed. She knows who the other mineral rights owners are for the 97 acres, as well as surface rights owners, etc. I was very happy about this ... I've read and heard that "strength in numbers" is beneficial in negotiations. So I will call her back as soon as I can with a list of questions.
As always, suggestions and input is wanted and welcomed!
Good news Robin! the more you know the more you are likely to get something good happen. And it sounds like fun to talk with a relative you hadn't known about until very recently. Yes very good to try to get everyone getting a good lease.
And maybe someday Antero or someone else can talk CNX into farming out again. Or maybe CNX is waiting and seeing how that is and might do the horizontal drilling themselves one day. I believe they are doing Marcellus wells somewhere, maybe not right there and don't have the equipment. Anyway something to look forward to. Lots to look forward to, really. And maybe sharing family pictures. Someone on Ancestry shared a picture of my great grandmother's parents (1860s era). Also her ancestors of course. They looked like really nice people, so it was a great joy to see it. Thanks to the internet. A lot of people in that era looked stern or unhappy. Probably from having to hold still for a photograph!
Anyway about the lease, maybe ask her if any of the others want to get together and share ideas and eventually share an attorney's fee. Just as easy for an attorney to do several as just one. And a lot more negotiating power including surface protection, which is good for your relatives.
She has already signed a lease, so it might be too late to include her with us ... but she negotiated with 3 landmen before signing with one (not the one that has contacted us). She's also been collecting royalties on the existing wells. My goal is to call her tomorrow to get more information. I did tell her that we were in the process of retaining an attorney to review and negotiate our modification. Before we firm that up, I want to gather any information that I can regarding the status of the others, whether they have signed or not.
Also, it will be good to have contact with others in the event additional lease or modification offers occur in the future (from CNX or others) .
I'm just glad that one of them responded, and that she is so willing to help. And reconnecting with family is a joy, for sure!
Yes things can go on for centuries in the oil and gas business. So even if she can't sign a lease now, as you said she might need to do something in the future.
Here is an update ... this same comment is in another post in this group (but it really belongs here).
A few days ago, I was able to talk to the other mineral rights owner who is a descendant, but the conversation was disappointing. Last fall, she received a modification from the same landman that contacted us. She said that she only has 1 acre interest. She signed and returned it. When I asked her about production costs, indemnity clauses, no warrant of title, etc., she appeared uninformed and disinterested. At one point she did say "that sounds like a good idea." She said that she also has mineral rights in Ritchie and one other county, and from them she received better offers. I asked her to please encourage the others to contact me (she knew of two, but didn't know if they had received modifications). She has limited contact with them. I was able to confirm the ownership of the surface and mineral rights of the property, so that was one good thing. And, she has been receiving royalties (not much) from the two wells that were drilled in the 90s.
She was given basically the same info from the landman (receipt of royalties could take up to 18 - 24 months from date of signing).
I am wishing and hoping that eventually, the others make contact with me.
She also confirmed that there is a lot of Antero activity in the area. One interesting bit of info was that she said that a cousin of one of the other heirs (not a relative) sold acreage somewhere in that area to Antero for several million dollars, but retained the mineral rights. This could be part of the land they wish to pool.
We are retaining an attorney (Kyle Nuttall of this forum). We are comfortable that he can represent our interests and concerns, given that we are so far away. Perhaps he can find out what the other mineral rights owners agreed to.
So ... interesting twist, isn't it? We out of state folks are the cautious ones in this situation.
I will continue to post with updates.
Update: Our attorney, Kyle Nuttall, is negotiating with our landman. This process will continue for weeks, perhaps months, depending upon how it goes. Kyle has been tremendous and I highly recommend him. One big thing I learned that our original lease doesn't deal with royalty calculations, which means that they aren't allowed to take deductions from our royalties. This is based upon a 2006 case - Tawney vs Columbia Natural Resources:
http://caselaw.findlaw.com/wv-supreme-court-of-appeals/1311629.html
We are attempting to negotiate a better royalty than 12%, and having the No Warranty of Title and Indemnification clauses covered in the modification. There are additional clauses to be negotiated that have to do with pooling.
He also said that there is a lot of activity in our area, which means competition and a pipeline to market.
I will post updates as I have them.
Thanks for your update, Robin. Sounds like things are going in the right direction. Please keep us updated.
I received an auto deposit from CNX in the amount of $485.67. This is for prior royalties on the two wells drilled in the 90s, but I will need to confirm when I get the deposit advice. I'm thinking it's for the time period that CNX had the lease (recent year, after acquiring from Dominion). Has anyone ever contacted Dominion regarding prior royalties and if so, what was your experience with them? Or, does anyone know if undistributed royalties move over from one lessor to another?
Hi Robin, do you get access to the OilDex site for Owner Relations for CNX? We do but it is a delay after the deposit before the info shows up. Re Dominion, due to a complicated mineral rights % situation my sister and I owned a larger amount of gas on one tract than the other, adjacent tract. Lease from 1989 before I inherited. Due to sloppy paperwork or something the company (different ones over the years) paid us (and our mother and aunt) the lower royalty amount and the owner of the other tract, a church, the higher % even though 3 of the 5 wells were on the part where we had the higher %. They changed it and started paying correctly but didn’t pay us back royalties. I didn’t pursue it. You should at least inquire. Good luck. I have a lot of things I would do differently if I could!
I just heard that Antero counter-proposed with a $500 inconvenience fee and inclusion of a No Warranty of Title Clause and Hold Harmless Clause. Our attorney believes we should hold out for more. I will keep everyone updated.
Don't you love that term "inconvenience fee"!! Thanks for the update and I hope you get a really good amount.
I was told a few days ago that Antero no longer pays “Bonus” for pooling agreements. But they do pay inconvenience fees on pooling agreements. No explanation tho. They do still pat "Bonus on leases.
I would say I want the royalty earned to date from production of my minerals before I will sign anything, if there is a suspense account holding funds for you, maybe Antero would help you find it. Even poor wells could produce quite a bit in 60 years. If you can't be paid for previous production, how do you know you will be paid for future production? Not an unreasonable question I think. I would want everything up to date before I entered into any more agreements.
We've already received prior royalties from CNX. Not sure if there are any prior royalties by Dominion or other prior lessees. We are looking into it.
r w kennedy said:
I would say I want the royalty earned to date from production of my minerals before I will sign anything, if there is a suspense account holding funds for you, maybe Antero would help you find it. Even poor wells could produce quite a bit in 60 years. If you can't be paid for previous production, how do you know you will be paid for future production? Not an unreasonable question I think. I would want everything up to date before I entered into any more agreements.
Time for another update. Our attorney negotiated a lease modification with Antero, and after some back and forth, recommended that we sign. It contains the clauses that we were concerned about ... No Warranty of Title and Indemnification. They are giving each of us a $1,000 "inconvenience fee." Now, there was some drama ....
First, they sent us lease modifications that were all garbled with wrong names ... mixing up the first and last names, and then mailing it to another one of us! Crazy! We contacted them and they remailed corrected paperwork, but wait ..... !!!! The modifications referred to our original lease signed in 1960, but with the names of the current mineral rights owners ... not the ones that actually signed .... which was my grandmother and her cousin. Ack! We contacted them yet again ... after a long dissertation from the landman .... he admitted those names were in error, and apologized. Now, we are waiting for a third set mailed priority mail ... we'll see if they are correct ... bottom line, carefully read your modifications for any errors!!! Don't assume everything is correct, and question anything.
Thanks Robin! Sounds exciting around there. Those landmen are very busy and I'm sure they have a lot going on, a lot of details for multiple lease situations, but still!! these are important legal papers.
You gave great advice.
Keep us posted on things.
I have read most of your post. Here is my question for you?
I have similar "found" mineral interests, although, the original leases written in 1913, basically forgotten. How is it that your rights weren't sold for taxes?
We had 7 shares of minerals (for seven siblings). Most were sold over the years for a pittance because they produced so little funds and folks didn't even bother to mention them in their wills (if they had wills?).
I am glad you are seeing light at the end of the tunnel. My adventure is only beginning. I just wanted to mention the need to pay the taxes on the shares in order to retain them. I wouldn't want anyone else to have to pay to have them redeemed like we did.
I look forward to your reply.
Hi Stephanie,
We were also concerned about the tax situation. Most of the other mineral right shares were retained (or inherited) by other family members from the time they were first acquired in the late 1800's. After discussion with a few of the current mineral rights owners, I learned that they were taxed on any royalties after they were received. I called the tax assessor's office and was told the same thing ... I would receive a "tax ticket" based upon the royalties received. It could be the next year before I received the ticket. Therefore, I expect to pay taxes next year on what I've received this year for prior royalties (not much, slightly over $500 for 2-3 years prior royalties). I still need to track down prior royalties when Dominion was the lessee (prior to CNX acquiring the lease). The reason the original lease signed in 1960 is still in force is because there have been active wells all of this time (although very small royalties). I hope this helps.
Hi Robin, I am in basically the same situation as you, we have many heirs in our family to the mineral rights in Grant Dist. We also deal with Antero. It took some time to get everyone on board with the Modification Lease because our wells had not produced much over the last 30 years or so. I have dealt with 3 Landmen from Antero, talked to Matt briefly at one point. All of the Landmen told us the same things you were told. At this point we are waiting for the division order. Drilling was to begin in October for the first well, and November for the second. I have no confirmation yet if they kept to that schedule though. We received our leases to sign in 2013, and finally got the last of the Heirs to sign the summer of this year. I am optimistically hopeful we will see alittle money from these wells. I do know everyone and their brother have tried to buy up our shares for over a year or so. Good luck to you and yours.