My siblings and I have oil and mineral rights in Richland County with a lease that expires this May. My brother, who negotiated the current lease, has since passed away; so I am new to the process and would appreciate your recommendations. Do we contact the oil company of our current lease? Do we contact more than one company? Is it too early to make the contacts? What are the going rates? Should we work through an attorney? Thank you for any help you may be able to give us.
Harvey
We used an attorney. We felt he guided us for the right wording in the contract. You need some guidance from the oil company's slant in their favor. You didn't say where you were located to find an attorney. I used Mike Zimmerman in Billings, MT. His costs were reasonable and got us a fair contract. Make sure you each have your own contract. Hope this helps.
Thank you, Joanne. That does help. I live in Western Washington but our mineral rights are in Richland county, MT. Thank you for the attorney reference. So did Mike Zimmerman help with your contract for your Richland county mineral rights even though he is in Billings? Did you negotiate as a group but then get separate contracts for each owner? Do you negotiate directly with the oil company; then work with the attorney for the contract? Sorry, I have so many questions.
He used his contacts he had. We had lease that was expiring and we re-leased with the same company but there is so much in all the wording that we felt he did a better job and protected our interests. We negotiated as a group and we all paid him. I live in Billings so was able to meet with him a few times but alot was done thru email. It is very difficult to find an attorney in the Bakken area. If attorneys are working with the oil companies they can't represent an individual. I don't know how many contracts you are looking at with the family--there were three of us and we each had our own contract. We had ONE spokesperson and three contracts. We all shared the info as we received it. hope this helps.
That helps a lot and it makes sense. So the attorney used your expiring lease, but made the contacts with the oil companies himself. I believe we have eight parties that would need contracts but I am hoping that my sister will have more details there; but I will get those details before contacting the attorney. How soon before the lease was expiring did you start your work with the attorney? Thank you again for your suggestions. It gives us a starting place.
Oh you can wait till you get an offer and work from there. Thats what we did. A good thing to do till then is start exploring what the going rate is and learn as much as you can about it. Snoop all around this site. I think its the most accurate around. ALso, this link is the state of Montana site.
http://www.bogc.dnrc.mt.gov/WebApps/DataMiner/ Go to wells and put in your township and range numbers and you can see wells in your area. Also, the GIS will open a map and you can see that way.
Everyone on this site is helpful and willing to share info. This is the place for mineral owners to be.
That makes sense. I am glad that I found this site. I have a better idea about how to proceed already. Thank you, Joanne.
Hello, This is my first post to this forum. I have some questions about inheritance of the shares when there are multiple members (siblings) on the family LLC who signed one contract with the leasing company. When the current lease expires, will the leasing company agree to sign two contracts if one or more members of the LLC decide to withdraw or resign? Alternatively, If the family LLC is dissolved, and separate contracts, bonuses, and royalties are paid to each member, via a new individual contract to each member, then if one of the siblings (members) dies, does the royalty payment continue for the life of the lease term or until somebody notifies the leasing company of the death? There are currently disagreements and some members may want to avoid the conflict, CPA fees, and extra attorney fees required to make some changes, so it appears the best approach is to withdraw and resign membership. The bonus check given to the withdrawn members would be the gross share portion before any CPA or attorney fees required to be paid on behalf of the company. Does that sound right? When I run the numbers, on a net acre share, a member (sibling) comes out ahead that way, if they withdraw from the family LLC. That part is confusing, so I figured there must be fees I have not figured in the mix. Anyway, forming a company, to protect the inheritance appears to have been a waste of money, and has now caused friction regarding inheritance. Dos anyone have any experience with that situation?
Harvey M Pust said:
That helps a lot and it makes sense. So the attorney used your expiring lease, but made the contacts with the oil companies himself. I believe we have eight parties that would need contracts but I am hoping that my sister will have more details there; but I will get those details before contacting the attorney. How soon before the lease was expiring did you start your work with the attorney? Thank you again for your suggestions. It gives us a starting place.