Hello! I’m hoping someone can help - as I’m totally new to this. I was tracked down by a leasing company to ratify rights to an existing lease due to someone passing away. I received a leasing bonus, and recently were contacted by a company wanting to purchase the property. I have a few questions. I own approximately 13.33 acres.
Do I need to pay any sort of property taxes?
Do I need to get a deed of some sort put into my name?
How does leasing work in general? Lease is up in Oct 2021, will we have an option to resign etc?
It appears that Catena Resources Operating in San Antonio has drilled at least one producing wells in your tract - CABLE 19 35 9 STATE COM #001H; API 30-025-46140. A couple wells have been drilled, but perhaps not fraced. If so, then this well will hold the lease and it will not expire. You need to do some research to see if you have royalties in suspense as you would not want your own money to pay for the purchase. You need to do some research. Did you sign a lease ratification or an actual original lease? Who is your lessee and has your lessee participated in any wells (ie paid its share of the drilling costs)? Is your predecessor in title listed as the mineral owner (maybe lost) and what do you need to do to clear the title? Do not sell until you have all the information. Contact your lessee and also Catena.
TennisDaze, Thank you SO much for all of this information! I ratified a lease with Catena.
I’m not certain what to do with the title. How do I find out who the lessee is?
When I say I’m new to this - I’m 100% clueless type new ha! Your input is so greatly appreciated!
Did you keep a copy of the legal document that you signed? If not, then ask Catena to send it to you and ask for a recorded copy of your ratification as well. That document will give a legal description of the minerals, the original lease and lessor and lessee and the recording information for that lease. You need to know the net mineral acres that you own. For example, do you own 100% of 13.33 acres (13.33 NMA) or only a portion of those minerals (10% of 13.33 gross acres = 1.333 NMA)? It is very important that you keep a file with copies of all legal documents, correspondence, division orders, check stub detail, well information etc as you will need this information in the future.
TennisDaze, I have a copy of the ratification, but it doesn’t narrow down the specific acreage.
Also, I asked Catena today about taxes being paid on the property and they advised that taxes are automatically taken out and paid, “unless I would like to receive full payment”. I’m not sure what that “payment” is, because I didn’t get anything other than the bonus payment for ratifying the lease. Any thoughts?
There should be a legal description of the gross acreage in which you own an undivided (likely fractional) interest. For example, from the title of your post, it could be NW/4 of Section 9 which is about 160 acres and you own a fractional (percentage) interest in all 160 acres, rather than 100% of a smaller tract. As to the taxes, are you talking about the property taxes or the New Mexico state income tax?
I’m concerned with property tax. I have no clue who “owns” the land. (At least, there is no title in our name).
The ratification shows: N2 NW4 of section 9, township 19 south, range 35, east, NMPM.
I’m not certain how much that may be, but I was told it was about 13.33 acres.
The N/2 of NW/4 contains about 80 acres and you only own a fractional (partial) interest in the minerals. There are likely to be many mineral owners in the 80 acres. Do you own any surface? It is very common for the surface and minerals to be severed and owned separately. The county will tax the surface and send a bill to the surface owner(s). It is my understanding that the minerals are taxed once they are producing based on the value of the well and that in New Mexico, the well operator pays that tax. Did you ask the landman for how your net mineral acres are calculated? Is the 13.33 NMA all yours or did your predecessor own 13.33 acres which are now subdivided within the family? Why are you not in pay if there is a producing well? How much money is being held in suspense to be paid to you? The operator will require clear title through the various owners into your name in order to pay royalties to you. Ask the operator for a copy of the portion of the title opinion which states what must be done to clear the title.