My father purchased what I’ve been told was a working interest in Midland, TX. It is about 3.75 acres in blk 52, section 37, ts2.
We’ve had offers from landmen the past few years as my father did not have a will and my stepmother has a life estate and my sister and I are remaindermen. I checked that section and it looks like Pioneer has active gas and oil production in that section. I think my dad has unclaimed money with the state of Texas but not sure - and I don’t know if there are any royalties owed.
My stepmother is wanting to sell because she needs the money. I have to agree to sell, so she can get anything (my sister isn’t willing).
I don’t understand exactly what we have or if we are owed anything…if we should/can work directly with Pioneer, or if we are getting a lowball offer. I’ve had 2-3 people approach us in the last few years.
First contact Pioneer and ask for information about the wells and what is required to get in pay. It is important find out if the rights are depth-limited or whether you have an interest in the new wells.
Second look at the deed records under your father’s name (or name of his company if he had one) to see what he acquired. Also see if there is an assignment or deed out of your father. These records can be accessed on-line if you do not live there.
Third, if he died without a will and probate, was there an assignment from him to a trust? Is title still in his name? Then Texas law will determine how asset passes and there may not be a life estate. An attorney will need to advise you. Pioneer will require title be clear before any revenues are paid.
Fourth, if he had a working interest, then he would be charged his proportionate share of well costs and be due his share of revenues. This is not the same as royalties and is taxed differently. But the big question is whether the working interest is based on unleased minerals or on an ownership in a piece of a lease of a third party’s minerals.
Do not sell until you understand what you own, how much net revenues are in suspense and payable once title is cleared, and whether you own other rights.
I also went on the RRC site and saw permits at the edge of the tract with what looks like horizontal lines running through.
I just can’t imagine that there isn’t anything going on and that this company is just buying things to hold them?
Thank you!
There is a lease (Evans) from years ago - he bought his little piece in 1967.
I was told that all we have is a “depth severed working interest” and that he sold all of the royalties before he passed.
I’m told the permits and horizontal wells do not go through our tiny piece, and if the current operating wells were anywhere near we’d be paying bills and getting paid…I would believe what I’m being told but I know this same company acquired a bunch of similar pieces in another survey and entered into a non-operating agreement with Pioneer.
He died without a will or a trust.
This is confusing. If your father owned a WI in Mr Evans’ lease, then your father had no royalties to sell. The royalties would be owed to Mr Evans, the mineral owner. Did Mr Evans sell or did your father sell? This is why you need to pull the deed records to see what you own. It makes no sense that the landman and company X want to buy a leasehold with no interests in any wells. If Pioneer is the operator of all the wells, then you need to talk with Pioneer. You are going to have to clear up the title.
So…if title isn’t clear and they have ownership incorrect, what would be the ramifications? Money would have to be returned and the transaction null and void?
I would like to clear it up so I understand but my family only sees $$$.
If title to the working interest WI) is in your father’s name, then you have to take the legal steps to transfer it to the heirs. Until that is done, then any funds due will be held in suspense by the operator. The WI is a real property interest, like a house. Think of it this way, if the house is in your father’s name, then you cannot sell it as his heir without establishing that title has legally passed to you and that must be done in the deed records by documents legally transferring the house to his children. You will need to work with an oil and gas title attorney or estate attorney to get this done properly. That is why you need to take the steps to find out what your father owned, by getting documents in and out of your father’s name and talking with Pioneer, if it is the operator.
I work in mortgage, so that makes sense. My mother passed without a will so her spouse received the house as life tenant and when he refinanced we all had as her children signed our rights to the house to him before he could complete the transaction.
It seems this is the same - she could sell half of what she is entitled to if I agree, because when she does it is mine. It doesn’t seem there needs to be a transfer to her as life estate…until she wants to sell it.
I’ve found the records in midland county. The original was an assignment of oil and gas lease between Connally Oil Co. and my dad as grantee. 1/32 undivided interest with the legal reading the south 160 acres or the east 240 acres with a drilling depth of 9500ft, along with royalty interest. My dad then assigned to Parker and Parsley, with a legal of the north 80 acres of the east 240 acres, but it appears to be the surface rights to 200ft and 70% royalty interest. In 2016, he conveyed this same to a landman prior to his passing.
Based on my knowledge whatever is remaining is my stepmother’s due to community property laws but she needs us to agree before she does anything.
Your step Mother could sell her interest without you and your sisters consent. You or your sister can keep your interest or sell them.
“Bundle of Sticks” apply in Texas
You need to discuss this with a title attorney. Not clear whether this was community property or not as it will depend, at least in part, on whether your father acquired the WI while married or single. And title will pass in accordance with Texas law as there was no will. You cannot get any clear answers without an attorney reviewing all the documentation and facts. No one can sell anything until title is established.
I’m told that they won’t buy hers without one of us selling - it’s literally 1.25 acres per person and they don’t want her piece without ours. She could only get half of what they are offering if I sell, all of it if my sister decides to sell as well.
He bought it while he was single, that I do know. They didn’t get married until the early 80’s. My sister and I are his only children. He was stubborn and didn’t want to get a trust or a will, because it meant he would admit he was going to pass (like we all do). He sold the mineral rights literally right before he died - they were recorded after - he didn’t have a lot so was getting together what he did have. Apparently Landmen have been contacting them over the years and he just never did anything.
From this statement, it appears he sold the producing overrides and kept the non-producing deep rights, which in that case you would have no funds to recover because they were sold.
There are companies out there who speculate on these non-producing rights and bank them in hopes to participate and put up the money to drill wells in future development, when/if it comes.