I recently learned that my father has inherited (new to us) mineral rights from my late grandmother’s brother. As his POA, I tackle the oil and gas paperwork.
All probates from him to my father are done and filed, and it’s just a matter of time before we get the specific details of his newly inherited mineral rights.
My question is: what are the best steps to take in sorting through and dealing with these new mineral rights? How do you determine any involved oil companies, and if anything is owed to us from past (or present) drilling, etc.?
In the past, when my mother passed away, I just took a passive approach of waiting for oil companies to contact us with what they owed; this time, I’m interested in a more active approach–if it’s practical/possible to do?
Joining NARO, the National Association of Royalty Owners is a great place to learn about active management of mineral rights. They have conventions, classes, webinars on important management topics. They have special classes on Mineral Management 101. Many of their experts are members of the forum. Introductory memberships are a great way to check them out for a year. The National Convention is in Houston Oct 16-19 this year. OK chapter is hosting a townhall in Tulsa on Oct 29. Texas has townhall meetings throughout the state. If you are im another state, they also have events.
The best way to get started is to sort all the minerals by state, county, township, range, section (or block, abstract and section in TX). The using the state websites, track down all wells and operators. Much of the information is free. NARO just gave a set of webinars on how to use the state websites to glean information to find your wells and missing royalties.
Have you also checked the unclaimed funds in the state where your parents live(d)? Funds may be there.
Thanks Martha! I’ll follow through with your suggestions–I have indeed already checked the unclaimed funds where my parents lived and found only some minor items (which I since cleared and received), so I should be good there.
As a follow-up, I was told by legal counsel that all the relevant oil and gas companies connected to properties in the probate will automatically be notified, so apparently nothing more needs to be done on my part:
The probate will disburse its mineral interests and the oil companies will take note and reflect that information. You might see your decimal interest and/or royalty payments increase a little after everything is done (30-60 days after the probate is final).
The oil companies won’t know about the probate if they aren’t notified by you or your attorney. Once a well is drilled and they have a title opinion, they don’t go back and continuously check the county records.
It is the mineral owner’s responsibility to notify the operators of the change in title. In some cases, the executor will do that, but best to make sure that you double check. It is not the operator’s responsibility as they do not have the staff to check for title changes.
Your attorney may be right in limited circumstances. But in the vast majority of circumstances, they won’t know about the change of ownership until you send them the probate document.
Further, the oil and gas lease recites that any change of ownership must be provided to the oil company.
No change in the ownership of the land or royalties shall be binding on the lessee until after the lessee has been furnished with a written transfer or assignment or a true copy thereof.
I agree to each of these replies (thank you!)–good advice–and I plan to send notification of the title change(s) to each oil company just to be on the safe side.
Active ownership for a mineral owner can take many forms. Best practice is to make sure your contact information in the county is current, have a solid record keeping system, and perform regular reviews of your properties. This will place you in the active market and allow you to gain greater market intelligence. There are several great tools available for free through State sources. Best advice I consistently received from seasoned mineral owners is be patient and invest your time. Good luck.
Thanks James–I just received the recorded Final Order/Decree today, so have already e-mailed a number of oil companies on my list.
Will be interesting to see what happens in terms of owner interest increase, and at least some accrued revenue held in suspense from one company has already been confirmed.