Howard+Borden County royalties buyout offer

[Jaye]

Hi all!

To get started–I’m doing this research for my wife’s 96 year old grandmother!

When her uncle passed away in 1986, he left all of his mineral rights and royalties to his sister, who later left them to her and her 2 siblings. They collect royalties fairly regularly/steadily from one in Kansas, but she (I’ll just refer to her as Grandma from now on) had no idea about any others.

Fast forward to last week–a strange phone call from an unknown man, telling her that she is partial owner of oil wells in Texas, and his company would like to purchase ther rights. He had a pretty substantial amount of information about grandma, and must have buttered her up pretty good because she’s not usually one to not question peoples intentions.

He didn’t leave any of his info with her, no name, no company, no dollar amounts. He just asked that she verify her address.

At this point, as someone with a legal and law enforcement background, this screamed scam city. I see elderly folks scammed almost daily, my own grandparents included. Other family members confirmed they were also called about this, one (younger and very intelligent that inherited it later) said its a scam and not to bother. The other had the same conversation as grandma.

Lo and behold, paperwork shows up via FedEx at her door yesterday. “High Sky Holdings” would like to purchase her rights for $2,500.

The contract is pretty basic, something that anyone with a legal background could draw up. Of note though, it mentions suspended funds/accounts, etc.

Going back to the beginning—grandma didn’t even know this royalty agreement existed, so she’s never been paid anything from it. If this thing has been paying for the last 40 years, I’d imagine there’s suspended funds somewhere, right?

It also doesn’t describe the property outside of the Royalty Deed dated XYZ from X person to Uncle, recorded in the deed records of Howard county etc.

Well, turns out I was able to locate the deed, and her Uncle certainly did purchase a small portion of mineral rights. 20/31957ths of 1/8th of all oil, gas, and other minerals in the following lands…

And this is where I really need help and I’m out of my depth. I’ve been staring at maps for hours trying to find these specific plots, but some things are best left to the experts.

It says the lands are situated in both Howard and Borden counties…and are as follows:

Southwest one-quarter (SW/4) of Section 37, SW/4 of section 36, Block 32, Township Three North, T&P Railway Company Survey

North half (N/2) and SW/4 of Section 42, N/2 and SW/4 of Section 41, N/2 and SW/4 of Section 40, N/2 and SW/4 of Section 31, N/2 and SW/4 of Section 32, N/2 and SW/4 of Section 33, Block 31 Township 3 North, T&P Railway Company Survey.

Containing 3,195.7 Surface Acres, more or less.

Royalty Interest only no right to develop, etc.

It also mentions Fullerton Oil Company and its successors have exclusive right and privilege of development (though I’m sure they’ve been bought and sold a dozen times since)

Can someone please help me map out the above, and let me know if there are actually any wells in place that should be producing royalties? I tried to use the Texas GIS website but when I pull up a plot, I can’t click on the wells, etc. I think it just needs finesse from someone that does it regularly LOL

I’m wondering if this has been paying out for the last 40 years into a suspended account (because nobody knew) and that’s what they are after. Either that, or someone has been pocketing it all and not telling anyone LOL

Thanks in advance–what started out as an assumed scam may not be after all–or at least not a traditional one. But if they’re offering $2,500 for it, there’s got to be something more to it…

[NMoilboy]

Hey.

Its right on the Howard/Borden border. Here. I think, assuming I jotted it down correctly.

It sounds like she owns 2 NRA. (being 2/3195.7 of 1/8th). 2NRA there is probably worth closer to $15-20k. That’s it.

Looks like all of those wells in those tracts are operated by Murchison, contact their land department and ask about suspended funds. If you have a name (of who owns this) I’m sure somebody could look them up in the tax rolls to see if Murchison thinks they own it.

[George_D_Cato]

NMoilboy is correct. Your interest is worth far more than $2,500. Do not sell until after you have determined any amount that has been suspended and what your decimal interest is for all production. That way you can determine what cash you get immediately and what your current income would be. Only then can you put a price tag on you interests.

[M_Barnes]

In addition to the above advice, it would be wise to check the unclaimed funds through the Texas Treasurer’s office. Use all of the ancestor’s names and grandma’s. In many cases, the funds are escheated to the state after seven years of production with no one claiming the royalties, so older funds might be sitting there.

There are many “buyers” out there who try to buy for small amounts because they already know that the funds are sitting in the state coffers waiting for release. Also check the state of Delaware, just in case. Some companies are domiciled there and funds end up there. They have a shorter timeline in Delaware and if the funds are not claimed, they go into the general revenue fund. Other states hold indefinitely. Also check any other states where the ancestors lived, just in case again.

[Jaye]

@NMoilboy

15-20k.

Wow! Thank you all so much for the work you’ve done–this lays it out so much better than any of the tools I was able to put together!

I contacted Murchison and they confirmed that the royalties are still being dispersed into a suspended account for the original deed holder!

It appears that when he passed away, nobody knew about this land and royalty deed so it was never dispersed within the family when they went through probate, etc.

Unfortunately, his other oil interests were left to his siblings including Grandmas mom–and she has since passed as well. So I think to settle it all we’ll have to dig through his will/probate filing, and then hers as well.

The kind woman at Murchison helped walk through a bit that if probate was done in CA, it’s actually a fairly simple process, but we’re still in the stages of collecting where probate was filed, both for the original holder, and later his sister (grandmas mom).

But it sounds like there could be a pretty real amount of money being held, considering it’s been going into a suspended account since his passing in 1986.

Is there a way by chance to estimate the production in the area and compare it to the number of wells on that property, etc? It’s sounding like royalties on 2NRA, multiplied by nearly 40 years…Even at $100/mo it’d equate to nearly $50,000! But I have no idea what that area produces.

I think we’re going to set up a family meeting to discuss it all and see if we can’t find the proper paperwork to get this dispersed properly within the family.

I have a call in to the company trying to purchase it, but no call back yet. I’m not surprised, now that we’re actually looking into it, I’m sure they know their offer was a lowball.

I actually think they’re trying to skirt the other family members by getting just 1 heir to sign it over, and whoever signs first gets the $2,500–luckily we’ve contacted most of the heirs that could possibly be involved and everyone knows not to sign until we do a little more due diligence…

Thanks so much again! I’m sure I’ll be back with an update for you all soon

[NMoilboy]

The wells here haven’t produced all that long. First wells online in early 2019. I guess I was bored, here is what these lands have made to date. Seven 1/2 mile wide units named after Fun Lovin Criminals it appears. I think about $15k in suspense and wells prob make $550/month right now. Assuming you can squint to read the numbers