In 2009, we (my brothers & sister) were given the mineral rights on some land that was owned by my aunt & uncle in Montague County. We all signed a lease with EOG Resources. Last summer we found out that we would be receiving checks for production on 2 units, that had been producing since July 2011 (this is the first we had heard of it). Since we don't live there, we really weren't 100% sure exactly where these wells were. My sister made a road trip & she saw wells that were located in an area that it made sense "this must be them." A few weeks ago, after hearing that there could be some new production on the horizon, I decided to have a look for myself. It turns out that the units my sister described, weren't even the ones we are being paid on. These were called the "Hansen Units." I did drive on around the property & found the rig where there will be new production. But now I'm not even sure if it's on land where we own any mineral rights.
I have a couple of questions:
1) We understood that we owned about a 1/3 share in the mineral rights on this property, but our checks from EOG show our interest as .00127742 on one unit & .00011954 on the other. I was also told be EOG that there are 85 owners!! We thought we were splitting it with two cousins. :( How do I find out what our actual mineral interest % is & is there something that shows how it differs on each tract of property? According to the mineral deed, we own mineral rights on two tracts of land.
2) On these Hansen units that we aren't being paid on, do I just assume we don't own any of the mineral interest on those units, or is there something I should be doing to find out why we aren't included? As mentioned earlier, these units are right on the property of where my aunt & uncle used to live. And according to the Montague County Tax Appraisal website, my cousin is being paid on this unit. Unfortunately, she has alzheimers & is an assisted living facility...so I hate to be asking her questions about something that might just confuse her.
It sounds like your land has been pooled with other owners. You can look for the unit designation at the clerks office if you can’t get EOG to give you the information.
The division orders from EOG should reflect the well names, which would allow you to easily research the wells on the Texas Railroad Commission website. Bear in mind that division orders are based on title reports done by EOG's lawyers, and they are usually correct as far as true percentage of ownership goes, and typically go back in time usually to the original patent grant, but there have probably been occasional errors. And, as Mr. Caldwell said, you have probably been pooled with others, which may greatly reduce your share of mineral royalties. Looking at the P-12 's for these wells as posted on the Texas Railroad Commission website may give you more information about the pooling and the actual acreage that shows you own or participate in if you are still a land owner, and if not, your name probably won't even show up on the P-12. And, as Buddy Cotten educated and enlightened me with our family's wells, there is always the unexpected or unknown "non-participating royalty interest" (NPRI) royalty owners that eat up lots of royalty shares you thought you might be due, but really aren't, because others that owned the land prior to your family owning it may have reserved mineral interests. Oil wells can be exciting at first, then quickly disappointing especially when you experience the rapid, natural decline in oil production of most of the wells in Montague County. And then, you will always have to pay taxes - school and county taxes for your portion of the minerals. If you need help navigating the Texas Railroad Commission website, let me know. I can post some notes that might be able to help you.
Not sure if I should continue this on the topic but let me present my situation and see where this goes. I have mineral rights in Montague County with my 2 cousins with EOG. We originally received a DO but EOG says they were sent out in error. The wells in question were completed in October time frame of 2011. We still have no DO's as of end of March 2013. We received Tax Assessments from Montague County for tax year 2012 and we paid those for fear of having tax issues with the county. Now EOG says the what they reported to Montague County was wrong. My issues are:
Income was reported to Montague County for 2012 and we paid those taxes. Those amounts are wrong.
We have not received any 1099 from EOG for what was reported to Montague County. I guess this was not reported to the IRS.
Normally I would report that income on my 2012 taxes that was reported to the county. Since I was not paid and do not have a DO I cannot report the income EOG reported to Montague County.
How should I handle this?
A point I would like to make: If I know when I signed the lease with EOG what I know now I would have done things a lot different. There is absolutely nothing good I can say about EOG. They refuse to give us any information or time line for a DO. It's going on 17 months now with no payment.
Does anyone that know or have any suggestions about the taxes. The wells are Wales Unit 1H,A-2H and Welsh Unit and Unit 2H
"The interest is to remain in suspense until all curative instruments are obtained and ownership is verified". We have offered time and time again to provide documentation but they say
"To give a little background on the mineral title associated with this land, the last document filed of record in the Montague County Courthouse was dated January 5, 1953. Your clients, among many others, failed to file the appropriate estate documentation to put anyone on notice oftheir ownership.
Instead, we have taken it upon ourselves to invest time and money to gather all appropriate documentation to verify ownership. We have informed Richard Byrd of this issue and are currently energy opportunity growth having our attorneys render a second supplemental title opinion for this tract of tand, because both the original title opinion and the first supplemental title opinion were unable to verify ownership."
I have filed nothing - I didn't even know I had these minerals until I was notified by EOG originally with the lease offer. I have asked time and time again if there is anything I can do and I get no answer, just excuses and complaining from EOG. You would think since they reported earning to Montague County for 2012 that they would have things figured out. Going on 17 months.
Thanks for the replies. Sorry to be so clueless about these things, but I was never able to find anything on the Texas Railroad Commission website to give me answers to original question. Could someone please provide a link? Maybe I'm just looking in the wrong place. These were the Hansen Units (see original post).
New question: I've been trying since February to find out more about the new wells that I saw off Allison Road. I only knew that one of them would be called the "Burks A Unit". A lady with EOG told me they should know more by mid-April. Since that time, I've sent 3 emails & left 2 voice messages that went unreturned. Finally, a lady called this morning & left me a voice mail. She said they were waiting for the "Revenue Dec" pages, & that we would be notified with the "Division Orders." She mentioned the "Burks A Unit" & "Townsend A & B Units". Is there anything I can do to find out more about these units (like our ownership %) before I receive the Division Orders?