I was wondering if leasing companies or landmen know for sure if you own the mineral rights to your property ornot when they contact you about a lease. Last year we had 3 offers to lease our minerals from different companies. I did not know if they do the research before they contact you or wait till the lease is signed.
Not all Landmen are capable of making the correct assumption
The landmen do research on the records available at the County Clerk's office. This info is utilized when making an initial offer to lease your mineral area. If a well is drilled on your property, a more extensive research is conducted to verify your actual holdings in the spacing unit in regards to royalty payments, making sure the titles are clear.
Emily,
It is the landman's job to get the signature of the "apparent" mineral rights owner on a lease. The bonus amount in total, is the offering for the contract and may not reflect the actual quantity of the mineral acreage. The lease language usually coveys all (including after acquired acreage) the lessor owns within a gross legal description.
It is best for the mineral owner to know what he or she actually owns before agreeing to a bonus amount. The lessee doesn't care until there is good production and an expensive detailed tile search is completed. It is the owners responsibility to know what he has if he wants to be treated fairly.
Gary:
One thing to add here is that most leases will have some type of warranty clause hidden in the first part of the lease. Before signing the lease, the mineral owner needs to make sure that clause is disabled some way. A separate clause in the addendum addressing this issue is my preference.
Gary L. Hutchinson said:
Emily,
It is the landman's job to get the signature of the "apparent" mineral rights owner on a lease. The bonus amount in total, is the offering for the contract and may not reflect the actual quantity of the mineral acreage. The lease language usually coveys all (including after acquired acreage) the lessor owns within a gross legal description.
It is best for the mineral owner to know what he or she actually owns before agreeing to a bonus amount. The lessee doesn't care until there is good production and an expensive detailed tile search is completed. It is the owners responsibility to know what he has if he wants to be treated fairly.
Gary L HutchinsonMinerals Management
That really hasn't been my experience in the real world. It is the landman's job to get the signature of the record mineral rights owner on a lease. The bonus amount in total is typically based on the actual quantity of the mineral acreage. It is best for the landman and mineral owner to know who owns what, but often the landman is in a better position to know since that is their line of work. The lessee usually cares right away or when the lease is paid for, what the net mineral interest is. They don't want to wait until there is good production before they find that out. They don't need those types of problems.
Be very careful as you read replies on this site. Here you have a non-landman telling you what a landman's job is. He is speaking out of school. Only a real landman knows what their job is. The reply given here is an unqualified one.
Gary L. Hutchinson said:
Emily,
It is the landman's job to get the signature of the "apparent" mineral rights owner on a lease. The bonus amount in total, is the offering for the contract and may not reflect the actual quantity of the mineral acreage. The lease language usually coveys all (including after acquired acreage) the lessor owns within a gross legal description.
It is best for the mineral owner to know what he or she actually owns before agreeing to a bonus amount. The lessee doesn't care until there is good production and an expensive detailed tile search is completed. It is the owners responsibility to know what he has if he wants to be treated fairly.
Gary L HutchinsonMinerals Management
The research is usually done three times. Preliminary research before they contact you. Sometimes more research before they pay you for the lease. Finally, they check title again before they drill. However, I have seen many mistakes made at all three levels, so it is important to try to strike warranty clauses from your lease where you are being asked to warrant title.
Thank you all for the information. According to our deed , we own the rights. However I have been reading that might not be the case. SSometimes they are sold but deeds do not change. Just seeing if I might want to dig some more myself or see if they might alreadyhave. Thank you.
Makes for interesting reading to hear how's it done. Don't believe any of that to be true across the board. However, one thing is true. When it is turning to the right, they don't want the deputy coming to their rig with an injunction and telling them to shut it down because of a bad lease.
Wade Caldwell said:
The research is usually done three times. Preliminary research before they contact you. Sometimes more research before they pay you for the lease. Finally, they check title again before they drill. However, I have seen many mistakes made at all three levels, so it is important to try to strike warranty clauses from your lease where you are being asked to warrant title.