I inherited some mineral rights about 10 years ago and wondering how and what docs to keep.
Leases - I’m keeping leases in alphabetical order by county. Is this the best way? Can I toss expired leases? I understand some leases can be extended…how do I know if a lease can be extended? I don’t want to toss something that could be still in effect.
Division Orders - I’m keeping DOs in alphabetical order by company. Is this the best way? If another company acquires that interest, starts making payment and issues a new division order, can I toss the original division order? Sometimes I run into the situation where a new company starts making payment, but does not issue a new division order…is this right? How do you handle that from a paperwork standpoint? Perhaps I should organize division orders alphabetically by county?
3, Sometimes I get calls from landmen asking about percentage owned. Do most people keep a spreadsheet with this information. It seems like this information is what is used to calculate the DOI on DOs so it would be good for me to keep track of. I’ve started asking operators this info and updating a spreadsheet with it.
Do what works best for you! My mom organized alphabetically. I am a geologist so I organize by location. Each one works.
Many of us keep our tracts by State, then county, then by township, range, section. Or by abstract number- depends upon the state system.
I never toss anything. If I don’t want the extra paper, I scan them and file digitally and store in the cloud. If you are in production, absolutely, do not toss that lease. You are in the secondary term.
Look at the date on the top of the lease. If you have not been drilled in the primary term, then see if you have any offers from the lessee to extend. Note: many of us do not allow extensions on leases.
Division Orders- I keep mine in a sub file for the tract with any information that I have on the well(s). Never toss them out. I have found them to be useful when another company purchases the interest and may have a different decimal amount. Sometimes, the new company does a new title search and reveals different information or sometimes the amounts are the same. Always keep that paper trail. I have new operators send new division orders and some that do not.
Yes, it would be very useful for you to keep a spreadsheet of what you own. Design it whatever way makes sense to you.
I also keep a spreadsheet of who is paying me, name, address, phone, email etc. What tract or well they pay on-property ID, owner number, and what months and what amounts they pay. Some folks use external software, but others do not. I like knowing when they pay and can notice when a check goes missing.
I keep a running spreadsheet for activity. All calls, all letters, anything that I read on the forum that is useful info near my tracts.
I keep a list of useful websites and logins if I need them.
The more organized you are, the more prepared you are!
If you have french fries under the seat of your car, you may not be inclined to keep these types of records. LOL. But try. Get some legal sized manilla folders, one for each section that you own properties in. On the tab, put the State, County, Section, Township & Range.
In the file, put a copy of your source deed, eg, mineral deed, trust deed, probate, etc where you come into title. This copy should be a copy of what is recorded in the county clerk’s office where the minerals are located. Keep copies of the oil and gas leases that your minerals are subject to. Again, the recording information should be on the lease. If you have Division Orders, put a copy of the executed DO in the file as well. I also like to keep in the file copies of any pertinent government filings, ie Oklahoma Corporation Commission filings. Those can be voluminous, so toss those that aren’t pertinent to the interests today.
Lastly, keep a legal pad sheet of paper with notes that will help you “remember” what has happened with this property so you can use it to refresh your memory when you get correspondence about this particular
property. I like the 3 tab files as they are easier to find the file you want. If you are lucky enough to own in several states, arrange alphabetically, then by county, then by “range”, then by “township”, finally by section.
Thanks Martha and Todd. Great info. I’m going to dive into organizing this fall and start with the DOs, separating them by location rather than company (which is how I’ve been doing it). After that, I’ll start on spreadsheets to track ownership and activity info. I may ping back here when I get to that step.
Dorothy
Congrats on your efforts. So many people “misplace” interests by not keeping track of them.
I suggest that you engage the services of an estate planning attorney. He or she will probably recommend that you deed the interests into a revocable trust. If done correctly, you will still have all the income, you will not need a separate tax return for the trust, and your heirs will inherit without the need for probate. A trust also allows you to protect the assets from you children’s creditors, divorcing spouses, etc. Visit with an attorney in your state.