According to a landman who sent us a Serial Register Page from the BLM, he says the SRP shows that we have ‘100% Record Title’ still in my dead Grandfather’s name!
However, it is a ‘naked’ Record Title he says. He says a ‘naked’ record title is only a liability for us because all Working Interests have been already conveyed out decades ago, and the lease is not bonded.
He wants us to convey (give not sell) the naked record title to the oil and gas company he works for because it would clean up the title, AND his company can bond it. By the way, this company this landman works for is the company that has been paying us ORI for several years.
What questions should I be asking him?
Ask for a clear detailed explanation in writing of the situation and liabilities, including the legal description so you can look up wells. I would be concerned that the ‘gift’ might result in loss of the override. You should also check to see if there is new activity in the area which may add to your OR.
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Thank you TennisDaze!
The landman said that any ORRI that was carved out of the Working Interest decades ago would not be affected. In other words, our ORRI would not be affected - he says. I have the Lease number, and done my homework; I know all the wells, including the new permits in the area.
Does “says” mean verbal or written statement? Is the written statement officially from the operator? If you have been receiving an OR all these years, then your grandfather or successor may have opted to farm out or assign the WI and reserved an OR. That assignment may be in the original JOA or other agreement among the WI owners at that time. Do you know whether your grandfather was ever a WI or did he only receive an OR? You should have any paperwork reviewed by a NM oil and gas attorney to determine and verify the legal affect. In particular, you will want to be sure that you receive OR for any future wells, not just existing wells, drilled under the lease.
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None of the above is relevant to owning record title interest in a BLM lease. You have no benefit to holding it. Assign to the operator and move on.
Thank you for your input, Permian.
Thank you TennisDaze, yes he was a WI owner and did retain and receive ORI. We’ve quieted some title issues and are receiving ORI in some tracks, but the ‘naked’ title news came as a surprise, hence my question on how to approach the operator’s request to convey it to them.
If it really is of no value, and we are not giving up any right to claim ORI that has not YET been ‘discovered’, then…