Ingress and Egress

General Mineral Rights Discussion
1

My second question of the day...I'm on a roll.

My dad left me 75 acres, but left the mineral rights to the 75 acres equally between me and my brother.

I am in the process of selling the 75 acres.

In the contract documents there is a provision for me to keep or release the right of ingress and egress for future mineral development. I am letting the buyer have 12.5% of my minerals with the purchase.

If I let this right go, won't my mineral rights essentially be worthless?

Thanks.

2

David,

Your potential losses may go far beyond just the loss of mineral value. If you don't have an attorney seeped in oil and gas and real estate, you should get one. You may also want your brother to approve your sale if it combines both minerals and surface in one transaction. The details of how you became owner (deeds) are of paramount importance.

There are a couple of highly qualified Texas attorneys on MRF.

3

Dave,

I'm a bit unclear. Your giving the surface buyer 12.5% of your mineral interest just so you, or your lease holder, can access your minerals? Why? The oil producer will have pay the surface owner for what they need for access. Unless Texas is different than No. Dakota, I wouldn't.

Rick

4

The simple answer is, do not give up the your right of ingress and egress. Since you are conveying 12.50% of the minerals you own, that person will be able to negotiate any surface issue with a potential Lessee.

5

You are letting the buyer have 12.5% of your "undivided" mineral rights? Does your brother understand that you are letting go 12.5% of his mineral rights too? You still could deed him 50% of the minerals and let the buyer have your 12.5% .

Regardless, letting go of any of the minerals will serve to diminish ya'lls negotiating power when it comes time to negotiate an O&G lease. Keep your ingress and egress rights ... and your minerals. Otherwise, you may be opening a "can of worms." --- my opinion only!

Good luck,

Pat

6

A large can of worms. I advise you to consult an Oil and Gas attorney.

7


How is Mr. Mason letting go of 12.50% of his brother's minerals?


Ms. Pat Malone said:

You are letting the buyer have 12.5% of your "undivided" mineral rights? Does your brother understand that you are letting go 12.5% of his mineral rights too? You still could deed him 50% of the minerals and let the buyer have your 12.5% .

Regardless, letting go of any of the minerals will serve to diminish ya'lls negotiating power when it comes time to negotiate an O&G lease. Keep your ingress and egress rights ... and your minerals. Otherwise, you may be opening a "can of worms." --- my opinion only!

Good luck,

Pat

8

Thanks everyone. I appreciate the information.

9

I recommend that you and your brother keep ALL of the executive rights (the right to sign an Oil and Gas Lease), keep ALL the rights of ingress and egress, and convey to the Buyer a 12.5% undivided mineral interest in the 75 acres as a Non-Executive Mineral Interest (NEMI). That way, YOU and your brother get to negotiate the terms of the OGML for the entire 75-acre Mineral Estate, and your 87.5% pro rate bonus and royalty, BUT Buyer gets his 12.5% pro rata bonus once you sign the OGML, Buyer gets his royalty if the well produces, and Buyer gets Surface Damages if there is activity on the Surface Estate. Win-win in my view.

10

Would this work? I agree with Mr. Good Wrench, but also stipulate that you will agree to let go 12.5% of your "cherished" mineral estate providing it's deeded (reserved) in a Life Estate with you as the Remainderman. How about that?

Good luck,

Pat

11

Thanks for the replies and advice everyone. Just decided to sell to someone else and keep all the mineral rights.

Thanks again.

12

That's the best decision you could have made, in my opinion. I read and re-read your last sentence several times and each time I got the subliminal message that you really didn't want to give away your "cherished" minerals. These days, and rarely, are minerals sold with the surface.

Good deal!

Pat

13

Yep, that is an even better option than selling the 12.5% MI along with the surface, but if you were dead set on selling the 12.5% I think one of the options presented here would have been a good one.

14

I agree Pete, there is a lot of good advice in this forum. This is all new to me, and I appreciate the advice of those who are more knowledgeable on the subject.