Mineral Rights negotiations

Montana Mineral Rights Richland County, MT
1

I have a newbie question. It is the landowner who negotiates the lease? Does the landowner also negotiate what the holders of the mineral rights get? I own 1/4 of 1/10th of a percent on three wells in Richland Co. Who decides what the mineral owners "decimal" will be?

Thanks

2

Brian, the mineral owner would make that decision, when you negotiate the lease, providing you have executive rights to your minerals. If you have ownership in 3 wells that have been active for more than 3 years, leasing may not be the best thing to do, and I would say certainly isn't the best thing if they are only offering 1/8th because you can get that much anyway without signing a lease and possibly become an owner in the future

3

Thanks for the reply. My late father owned the 1% interest in the 3 wells and now his 4 children have equal shares of that. 2 of these wells were completed in the mid 80's and the last in 2010. These were on his fathers property that was sold years ago but the family kept the mineral rights. Can you explain the last sentence of your reply? I know nothing about this. I had some company offer me $10,000 for my rights and I promply threw it in the trash. I'd rather have the $400.00 per month until whenever.

Brian

4

Brian, if you own the mineral rights, inherited without a lease, they would still owe you a royalty. If your 1% that you split had already recoverd the costs of drilling and completing and any risk penalty [ since the wells predate the latest changes to the law on non-consent, I think you would be under the more generous older law ] 100% of your part of production less the cost of production could be yours to keep. In any case you may have alot of money in a suspense account. That offer of $10,000 may have been an attempt to buy your interest with your own money, the money already owed to you.

5

Thanks. I have my call into XTO to see if I indeed have "Executive Rights" etc. and who is doing the negotiating. I will look around for more information on the older law (probably here) unless you can direct me. Appreciate all of your information.

Brian