Cathy (and her other half), the operator has 6 months from the date of first production to pay or there is a 12% interest penalty per annum.
I would have to familiarize myself with the actual title, but based off what you say, if her mothers will was probated in Oklahoma, and then chain of title up to her mother was clear, there shouldn’t be an issue. Your mention of affidavits has me a little concerned as affidavits of heirship do not provide marketable title.
Catherine, our well is poorest producer of the bunch. When the I’s are dotted and T’s crossed, Slawson first check was dated 4/15. The first sale was 9/25. Production 9/25 thru 2/14. The title attorney was two weeks behind which was cause of slight delay. My title was clean from the beginning. My cousins had to get the leasing company landman to prep quick claim deeds for my brothers and I to sign crossing off one of T’s. Hope Sendora gets it straightened out for ya.
I’ve asked for a subordination form from a lien holder before. Basically covering our interest in case of foreclosure. Most banks are more than happy to give a subordination for an Oil and Gas Lease because mineral development will increase the value of the property.
I used them to purchase the surface and minerals 15 years ago still owe around $25,000 on this 80 and I own another 80 not far from this particular acreage that I’ve had no problem with but different company my bank says they don’t understand what the heck they want regarding paper work, but I can say this I am extremely annoyed they may not have separated the deeds as far as mineral and surface if they didn’t I told that bank to get it separated to where it states they are leaning on the surface only or I would move property to another bank I paid 600per acre, land across the road from me sold for $3000 per acre a couple months ago so moving banks wouldn’t be a problem (they say they don’t deal with mineral it is only surface so I told them check copy of deed, waiting for them to get back to me, and waiting on Devon to call me back, I had a call into Devon with questions, you have to give them 2 days to call back so I take my division order papers to work In case they call back, and what do they do? They call while I’m in the meeting with corporate people from my company.
It’s hard for me to play this game with Devon I’m over 2 cardiopulmonary dept’s at 2 different facilities owned by the same company so for them to call just whenever it suits them is a little outrageous to me.
It has been years since I was in the field landman game, but it was usually my responsibility as a landman to get the subordination taken care of with the bank and the mineral owner, but I guess that was the good old days.
However it does sound like you are going to have to do the pushing on this. As I said before, generally a bank will issue a subordination rather quickly and easily. Your bank should have a subordination form in-house that they could execute for you to give to Devon, if not, ask Devon to give you a form.
As Jordan stated, more than likely, the mortgage covers your minerals by default if nothing else. In addition to the mineral concern for the oil company, lets say there is a drilling rig or pumpjack (or even a lease road) on your surface when a foreclosure happens, the subordination should protect the companies equipment and right to continue using surface locations.
I see, ok virginia I will look it over close like I said I work with a few banks with rental properties if I have to move the land to another bank just to clear this up they would love to have the business and I will be sure its surface only (it’s really up to Chisholm trail farm credit what I do with that) they are leaning on if I have to . the next couple days will tell me more I think.
Thanks Me Baade I’m thinking it’s the loan docs. Causing this little ripple, I’m thinking it was not specified surface only back when I bought it. If so I’m going to fix that before I sign by having current bank change the paper work to specify surface only. maybe in a couple days we will here back from Devon and know exactly what they are talking about. I’m not starving or anything the money can sit there for awhile. But I am going to get this loan thing straightened out for sure and quick cause I’m not going to have the bank signing my division order, or maybe I just need to reassign some resources and pay it off.
When the operators lease, they get one title opinion which is not as rigorous as the division order title opinion. The second opinion is more in-depth (and often done by a completely different analyst) because it is for the companies buying the oil and gas and then paying royalties, so they want to be sure they pay the correct parties. You technically do not have to sign the DO in Oklahoma, although it is a good idea to confirm that you have the same Royalty Interest (RI) as they state so that you are paid correctly. They need your Social Security or EIN number on the W-9. Also, this is the time to claim your interest payment if they are late and past the 6 months date of first sales.
If you have clear title (from the second opinion) you may claim 12% interest from date of first sales. If you have a cloud on your title, you may claim 6% interest until the title is cleared up. Request from the division order analyst (name is often at the top of the DO) a copy of the portion of the title opinion that pertains to you and the items that need to be “cured” (fixed). Your issue will usually have a number attached to it. You might need a death certificate or a mortgage statement, etc. Be sure and send them everything they need, put your owner number on your letter. Give them about “200 ways” to contact you and send it by certified mail return receipt so you know they received it and you have a paper trail.
If you do not contact them at all, then your funds may be put in suspense for three years at the company if they do not have your correct address. If they do have your correct address (don’t assume they do-the leasing agent and the paying company are usually completely different entities), they are supposed to start paying you with whatever RI they have until you clear everything up.
The DO will also state whether they will only pay you if the funds add up to $100 or $25 or whatever is stated on it. You can tell them the number. It is best if the DO is on the model NADOA form. If you receive a DO that is pages long or has extra verbiage on it, you do not have to accept it. Make sure it says “this DO does not change any terms of the lease”. See the form listed below.
Todd, I’ve talked to this guy before and he is pretty knowledgeable. (See question and his answer). If you click on The Mineral Hub link then on contact you will find his phone number. He answered my call right away and answered all my questions too. His grandparents were from my home town in OK.
http://en.allexperts.com/q/Energy-Industry-Oil-2441/2011/12/subordi…
I see i was talking to the lean holder ( Chisholm trail farm credit ) they told me they don’t understand what what they want and would be happy to call them because they want to keep the loan , I told him I would move it to another bank specifying surface only or just pay it off they have made good money off me over the years and understand that I am also going to reinvest this mineral interest in more land and cows or I will be taxed to death, so I said sure go ahead it was then I told them to look at my paper work of the loan if it doesn’t specify surface only we needed to change that ( I don’t remember was to long ago. Devon’s terminology of this document they need is a directive allowing me to receive all royalty payments or Chisholm Trail Farm Credit needed to sign the division order that’s the message Devon left me while I was in the meeting, so maybe it’s the subordination agreement Devon is talking about, and confusing the bank cause the bank did mention the subordination agreement
It looks like I will maybe have to take a day off work and run around and try to get all this taken care, if I can’t, may just need to hire attorney to look out for my interest I used a attorney to look over my lease some years back, but wasn’t all that impressed, anybody know of any others out there they liked or thought did a descent job? I think I’m going to sign a lease in 34-18N-2W if the lease offers get high enough or I’m going to just wait and be pooled.
So virginia what is the normal time frame to have division order signed and returned? And what is the consequence?
I think they are allowed to withhold payment until there is at least $100.00 due in royalties? Also the wills in question were probated in Kansas,Cowley County, Arkansas City. However there was a previous well, Bobby Tindal I think his name was the operator, paid my own mother and Cathy’s mother for several years, and there was never a question what-so-ever. It was a vertical well but I believe it is capped now.
Jordan,
You are right on stating that Todd can not remove the minerals from the mortgage, but he stated he may pay the mortgage off, then he can. Also, the oil company has 6 months from the date of the first sale of oil & Gas. And only with a clear title is it 12% interest, otherwise it’s only 6%.
As far as not signing a division order? The oil company may not be required to pay interest after the title is cleared if you fail to sign a division order. And after 3 years (I think that is still right) the oil company has to give it to the state for holding.
Jordan Murray----it all started at 6 mo. when we got the division order and a letter from Slawsons Ok. City office with a page 35 0f 97 pages of comments by their lawyer wanting more proof that she owned the mineral rights that the books in the court house at Guthery said she owned. The lady that signed the letter said if we had any questions to call her. After I called her twice she wouldn’t talk to me anymore and turned it over to a land man from Slendaro ??? which they must own. We got death cert. for grandma who has been dead for 50 years amoung other things and on and on. It has gotten to the point that it is seemingly stupid and ridiculous. If it was that important why didn’t they clear up the title before they felt save in drilling? It is not a good well and I suspect they are trying to recover as much of their money as they can before paying the mineral owners. I have asked on the foeum if antbody has received any royalty payments from the Ruffed Grouse but have had no replys.
Thanks Mr Murray, forgive me but what is HBP?
Mr Murray, so Devon’s terminology for the doc. Is for the bank to sign a directive stating that the payments come to me, I take it that you think this is probably the subordination agreement? Thanks.
M Barnes, We seem to be typing at the same time. Thanks for sharing your vast knowledge!
Martha
Ralph Harrison at Mecklenburg-Harrison in Kingfisher does a lot of work in Logan, Payne and Kingfisher County. I would call him at 405-375-6484. He has done good work for several folks on this forum…