We have been offered numerous times by many oil companies large bonus per acre and nice royalty percentages, with contracts mailed to us ready to sign and notarize. We have more than 200 acres of unused, unleased mineral rights in Moffat County, CO. At the very end of each deal offered it is cancelled as the interested party finds out that one company has rights over only ten acres and it is unused and undeveloped and they are basically holding us hostage by not releasing this tiny portion of unused rights. It stops every deal. The company has had those rights for over half a century and had to search themselves before they knew they had them. But when an oil company that has made an offer finally learns this and tries to make a deal with the company holding the ten acres they can't make a deal. How do I go about getting a legal description of what and where those ten acres are and how do I get them back? This occurred before the Pugh Clause which I believe states that if a company doesn't do some development in five years the rights return to the owner. So we are stuck. What is the best way to go about this? Thank you. David Agee. Google Earth AGEE GULCH that is where the oil is.
David, if there has been no production on those ten acres, in your place I would really want to read a copy of the lease to see if it allows the lessee to hold those ten acres......or all 200+. If you get a copy of the lease and it turns out that they can't hold any of your acres you may need to sue them for slander of title, I hope you saved all the offers as they would be evidence of damages. It must be one heck of a lease that even 50 years of no production and it still continues. I wonder if THEY still have a copy of the lease? I think nothing will be done until you have a copy of the lease. I would search the county records for the lease. If you can't find a copy of the lease you may even have to hire a lawyer to get a court to compel them to give you a copy of the lease. You are in the dark right now, think of getting the lease as a 200 watt flourescent lamp. When you are no longer in the dark you can work to some purpose, or see if there is nothing to be done anyway.
Thank you for the immediate response. We have the original lease from Sun Oil but somewhere along the way they leased ten acres to a company Kerr-Mcgee and we never knew it. They are impossible to deal with. We have no contract with them, when I phoned them they were rude, said they only dealt in Texas and Oklahoma and don't have time searching for some little ten acre lease and they do nothing in Colorado. However, they do have rights of ten acres we never knew about and they won't cut loose. What lawyer should we get and how much do you wonder would be a fair price. I'm afraid of getting one that stretches it out forever and bleeds us dry.
r w kennedy said:
David, if there has been no production on those ten acres, in your place I would really want to read a copy of the lease to see if it allows the lessee to hold those ten acres......or all 200+. If you get a copy of the lease and it turns out that they can't hold any of your acres you may need to sue them for slander of title, I hope you saved all the offers as they would be evidence of damages. It must be one heck of a lease that even 50 years of no production and it still continues. I wonder if THEY still have a copy of the lease? I think nothing will be done until you have a copy of the lease. I would search the county records for the lease. If you can't find a copy of the lease you may even have to hire a lawyer to get a court to compel them to give you a copy of the lease. You are in the dark right now, think of getting the lease as a 200 watt flourescent lamp. When you are no longer in the dark you can work to some purpose, or see if there is nothing to be done anyway.
David, great that you have the lease. Sun oil could not sell to Kerr Mcgee, anything that was not in your lease with Sun, so the lease you have in your hands should control. Now you need to read the lease and see if 1) there is any reason why the lease should still be in effect and 2) see if there is any reason why the lease should have expired on it's own terms. Under 1), I would be looking for something like the lease was for 99 years or something, since you say there has been no production. Under 2), I would be looking for a set number of years for the primary term of the lease, such as 10 years, or as long thereafter as oil and gas are produced.
One thing does occour to me and that is the lease may have granted the ten acres surrounding a dry well. That would be hard to get around.
I don't have the lease to read, so feel free to ask as many questions as you like. This case is interesting enough that I think the real professionals would be interested in chiming in.
Does the lease give a legal description? If you had that I could probably guide you on the Montana DNRC O&G Map.
I have all the legal descriptions, the ranges, etc. the last lease offer only wanted a small portion to begin with, Township 7 North, Range 90 West of the 6th PM , Section 3: Lots 7(36.96) 8 (37.95, 9(37.00 10 (35.99) Also Section 4: Lots 5 (38.67) s6 (39.97. Onlyi 101.25 Acres. But when they get toKerr Mckee Andarko they all give up. Thank you. I am in a territory I have no knowledge about whatsoever.
David, I looked on the Eser. org Colorado map( I don't know why I typed Montana before, I guess I just have Montana on my mind) and didn't see any old wells in your section, not even any cancelled permits. I did see producing wells not very far from your section. I can't imagine on what grounds Kerr Mcgee would continue to have a valid lease after 50 years and not even a permit to drill. I think it's possible that Kerr Mcgee knows the lease is expired and just doesn't want to record the release of record, after all, what's in it for them? It would be a diversion of time money and resources, albeit small, for no gain. I don't think you are up against opposition, apathy is the problem. I find it hard to believe that potential lessees would be so timid that they would not even check to see if there had been any production on a lease that old.
That would leave curative. You could file an affidavit of non-production which may help but does not return your title to the condition it was in before the lease, it takes a release from the lessees assignee Kerr Mcgee to do that. I would be asking a lawyer what it would cost to do an unopposed quiet title action to return your title to it's pristine shape. I can't think of anything better at the moment. I hope someone else could chime in with something better.
Mr. Kennedy, you cut right to the chase, which would have taken me years to do. Tomorrow I will contact a Denver Oil Attorney and explain exactly what you just said and he won't have to waste any time getting to where you already are. I appreciate your sharpness. The last company, AXIA, even told us that if we were to get that release in our hands they would jump at the opportunity and even offer higher royalties and higher bonus per acre. If I can get that done, he said, call him immediately. Why they cannot do it I do not know.
There are two small producing gas wells that we do collect a small royalty from owned by Kaiser Francis, however they have control only over the tiny area those wells are on. The rest is wide open, with the exception of the Kerr-Mcgee hangup. Being totally ignorant of all this and how it works, would you venture a guess as to at what limit of money you would pay an attorney to perform such a duty? Perhaps you have no idea. I am dealing with my 90 year old mother who is all there but when it comes to writing a check to a lawyer she is going to want to be assured she is getting what she is paying for and what she is paying is worth it. Her motive is to get all things in order to avoid any family conflicts in future and not so much the money. My motive is to help her do this as well as not giving up at the first roadblock. I think we have something there and it should be developed and my parents and my grandparents have been sitting on it since 1921 not having a clue something could be done with this. That whole area is loaded with oil. I really do appreciate your sharp insight and must tell you it is a rare pleasure to find someone who gets it right away and distills the situation into a nutshell. Kudos. If only everyone I met were that sharp. Thanks again, David Agee. PS did you happen to google earth Agee Gulch.? That drives me more crazy. The place is named after us and we cannot seem to do a thing with it!
r w kennedy said:
David, I looked on the Eser. org Colorado map( I don't know why I typed Montana before, I guess I just have Montana on my mind) and didn't see any old wells in your section, not even any cancelled permits. I did see producing wells not very far from your section. I can't imagine on what grounds Kerr Mcgee would continue to have a valid lease after 50 years and not even a permit to drill. I think it's possible that Kerr Mcgee knows the lease is expired and just doesn't want to record the release of record, after all, what's in it for them? It would be a diversion of time money and resources, albeit small, for no gain. I don't think you are up against opposition, apathy is the problem. I find it hard to believe that potential lessees would be so timid that they would not even check to see if there had been any production on a lease that old.
That would leave curative. You could file an affidavit of non-production which may help but does not return your title to the condition it was in before the lease, it takes a release from the lessees assignee Kerr Mcgee to do that. I would be asking a lawyer what it would cost to do an unopposed quiet title action to return your title to it's pristine shape. I can't think of anything better at the moment. I hope someone else could chime in with something better.
David, I didn't realize that you were receiving royalty from those small wells. If the lease for those Kaiser Francis wells is the same lease that Kerr Mcgee has a portion of, with no pugh clause, you have run into the same old roadblock.
I am really having a hard time understanding how Kerr Mcgee could block things with so small amount of acres. If I were an operator wanting to drill and another company held ten acres where I planned to drill, the holdout could pay for their part of the well or I would drill without them and collect the fairly massive penalty that the state would allow me to impose.
I don't see where Kerr Mcgee could pose such a problem if they only have 10 acres and never had production. Could it actually be Kaiser Francis who has producing wells is the actual roadblock to a new lease and development? If the Kaiser Francis wells are part of the same lease, with production and no pugh clause, it would be Kaiser Francis that is holding the lease by production, Kerr Mcgee would own a small part of the lease which would also be held by Kaiser Francis' wells.
I moused over the Kaiser Francis wells to identify them, they did not look close enough to be relevent to the description you gave. I wonder what kind of spacing those wells are on.
Mr. Agee and Mr. Kennedy,
What an interesting discussion!
I hear Axia is a good company and I hope you get everything squared around. I think it is very wise to get this cleared up while your mother is alive because issues can really get much more complicated (and expensive) after the original owner passes.
I hope you’ll continue the saga of the hostage lease holder as it all unfolds. Thanks for posting!
Dianne
Okay, this is what I have learned, please tell me if you can think of what to do next. of 101 acres, Kaiser Francis has only 15 acres of mineral rights. So we do not know who owns the rights of the other 85 acres. The Kerr-mcgee thing was bought by Anadarko and they sold it to Merit Oil, and that deal has to do with everything below 5000 feet. Merit said they cannot do anything for us until we learn who leases the top parts. No one I call can find out who leases everything above 4000 feet but nothing is being developed. That's 85 acres someone has leased of mineral rights of ours and we cannot find out who it is and neither can any oil company that has tried to lease from us has either. Now what?
r w kennedy said:
David, I didn't realize that you were receiving royalty from those small wells. If the lease for those Kaiser Francis wells is the same lease that Kerr Mcgee has a portion of, with no pugh clause, you have run into the same old roadblock.
I am really having a hard time understanding how Kerr Mcgee could block things with so small amount of acres. If I were an operator wanting to drill and another company held ten acres where I planned to drill, the holdout could pay for their part of the well or I would drill without them and collect the fairly massive penalty that the state would allow me to impose.
I don't see where Kerr Mcgee could pose such a problem if they only have 10 acres and never had production. Could it actually be Kaiser Francis who has producing wells is the actual roadblock to a new lease and development? If the Kaiser Francis wells are part of the same lease, with production and no pugh clause, it would be Kaiser Francis that is holding the lease by production, Kerr Mcgee would own a small part of the lease which would also be held by Kaiser Francis' wells.
I moused over the Kaiser Francis wells to identify them, they did not look close enough to be relevent to the description you gave. I wonder what kind of spacing those wells are on.
Thank you, I just don't know what to do. We have 101 acres and only 15 of them are held by Kaiser Francis by two small gas wells. We have a 1954 lease from Sun Oil. We are wondering if Sun Oil has the other 85 net acres of mineral rights. They are not developed
Dianne said:
Mr. Agee and Mr. Kennedy,
What an interesting discussion!
I hear Axia is a good company and I hope you get everything squared around. I think it is very wise to get this cleared up while your mother is alive because issues can really get much more complicated (and expensive) after the original owner passes.
I hope you'll continue the saga of the hostage lease holder as it all unfolds. Thanks for posting!
Dianne
If nobody can find who has legal right currently to the shallow rights and you were the owner, or heir to the owner, I would say a quiet title action would be in order, if the judge rules in your favor, which I think likely if unopposed, it would clear your title so you could lease. With what you have told me so far, that is the avenue I would pursue.
Thank you for that quick bit of expertise. What is a quiet title action and how quietly can I do it? Do I slip over to Craig, Colorado in some office and fill out a form and see if it flows through the system un-noticed or something like that? Whatever it is you can bet I'm going to do it quietly. That's my general approach to all things so that whatever I do goes unnoticed until it is too late for anyone to do anything about it. Finally one of my less favorable characteristics can be put to good use. Thanks again. Dave
r w kennedy said:
If nobody can find who has legal right currently to the shallow rights and you were the owner, or heir to the owner, I would say a quiet title action would be in order, if the judge rules in your favor, which I think likely if unopposed, it would clear your title so you could lease. With what you have told me so far, that is the avenue I would pursue.
RW. hope you are still with me. A number of unfortutane family thing came up and I somehwat dropped the ball. Last I recall Kaiser was pumping out two piddly gas wells holding up all the rights they leased to nine other companies who are not producing. Some companies have rights below five thousand feet, others have it from top of earth to five thousand feet. Her old lease with kaiser says she has all rights from top of earth to center of the earth or something. Have they not leased something that is not in their own lease. If you have time I look forward to your response and if I am barking up the wrong tree please feel free to tell me exactly what you would to. Thank again, DF AGEE
r w kennedy said:
David, I looked on the Eser. org Colorado map( I don't know why I typed Montana before, I guess I just have Montana on my mind) and didn't see any old wells in your section, not even any cancelled permits. I did see producing wells not very far from your section. I can't imagine on what grounds Kerr Mcgee would continue to have a valid lease after 50 years and not even a permit to drill. I think it's possible that Kerr Mcgee knows the lease is expired and just doesn't want to record the release of record, after all, what's in it for them? It would be a diversion of time money and resources, albeit small, for no gain. I don't think you are up against opposition, apathy is the problem. I find it hard to believe that potential lessees would be so timid that they would not even check to see if there had been any production on a lease that old.
That would leave curative. You could file an affidavit of non-production which may help but does not return your title to the condition it was in before the lease, it takes a release from the lessees assignee Kerr Mcgee to do that. I would be asking a lawyer what it would cost to do an unopposed quiet title action to return your title to it's pristine shape. I can't think of anything better at the moment. I hope someone else could chime in with something better.
David, I think you are probably barking up the wrong tree. If the first lease did not specifically exclude any rights the the rights to the center of the earth were leased and the first company merely assigned rights to part of what they leased to someone else. Wish I had something different I could say.