I’m a new Mineral Rights owner who recently signed a lease with Devon through TODCO PROPERTIES. When it came time to pay me, they informed me that they can not now pay as there’s still an outstanding paperwork trail from 1964 that they can’t verify. Why would they tell me this now after we negotiated for some weeks and I signed? I have no way of figuring out this paperwork from so long ago apparently connected with my grandmother. Does this sound like a scam?
Sounds like a scam to me.
What kind of check did they give you? A draft check or no check?
What were the restrictions on the lease?
Was it subject to good title?
What specifically are their title objections.
It not a scam, but they have the lease, which is what they wanted, and you have to clear up the title to get your money if you agree to defend the title in your lease.
Carla,
Sounds like your minerals don't have a clear title. They can not pay you till they can clear your title, hopefully you didn't guarantee a clear title. Once they can get the title clear, they will pay you. You need to find out what they need from your grandmother's paperwork and you may have the answer.
I was able to clear one of my mineral title with a simple answer, as I know my grandfather estate wasn't probated. Then we were able to clear it up.
DO NOT SELL YOUR MINERALS IF THEY OFFER TO BUY
What is your grandmother's name?
Hi, thanks for all your insights. I guess my big question is if the company knew there was some issue with my title, why wouldn’t they have brought it up months ago when we were negotiating? They obviously knew about this all along but didn’t clus me in. Also, how can my signature on a lease be legal if I’m not the rightful mineral owner in the first place? Wouldn’t that put the validity of the agreement in question? I think it odd that they waited til I signed and then brought something up that looks like it’s a long shot. This is why I’m suspicious.
Do you have an interest ? If you do you leased it. They just wanted to get it leased if you had it if you don't they will get it in the pooling if nothing else.
Sometimes they lease on a cursory check of title and when they start looking closer they find title issues. If they really thought you had some interest they would have paid to lease and recorded it, then if a well came in they'd rely on a title opinion to determine if they pay royalties. They didn't record a lease in your name, ask them to return the lease to you. If you believe you should own very many acres do a quiet title. They are not out to steal your minerals, scam you or even purchase them, these are both very reputable companies not crooks.
Carla,
Is the court house where your minerals are close to you. If so, you need to go to the county clerks office and check to see if you really own the minerals. Or you may have to hire an attorney to research it and then QT it.
I will agree with Mineral Joe, the oil company you are talking about has a good reputation, so I don't believe they are trying to scam you. Also, you need to check and make sure the lease never got recorded at the county clerk office.
This is a quick summary of how leasing work. A landman goes to the co. Clerk offices, does a little research and gets all the information, nothing in deepth to find out who may own the minerals. Then he tried to get a lease for a company. Once he gets a lease signed. It is turned over to the oil companies attorney to do an indepth title search. When they find that the chain of ownership has a break, something not recorded, or anything like that. Then the oil company holds the lease till the owner clears the title unless they have marked the part out about guarantee the title. Then the oil company decides if they want to go to the expense of clearing the title in order to get the lease. Since the oil/gas attorney's are really busy right now, that could take a few months instead of days.
This may be different at different companies, so use the information only as a general guide.
If after 30 days, you have not received your money for the lease, you have the right to ask for them to return it. But, if the company has agreed to clear your title, I would forget about asking for the lease back. In some cases, clearing the title can be expensive. You do need to ask the oil company what they feel is wrong with the title and see if you can find the information they are looking for. Sometimes it's as easy as having an affiliated signed.
The title to the minerals passes automatically with the death of your ancestor.
However, if a probate is needed to make the title marketable some companies could wait to pay you the bonus until the title is cleared to the satisfaction of the company doing the drilling. Most companies pay the bonus regardless of whether the title is marketable.
I am in agreement with the suggestion to ask for your lease back. You can have someone else lease it.
The title problems could have been known before they leased you.
Do you know if your lease has a warranty clause in it? If it does then you have guaranteed the title and you will have to pay to resolve the title problem. You can either pay them to fix it or you can hire an attorney yourself. Once the title problems are cleared, they are going to have to pay the bonus, they owe you.
Where are these minerals located?
How many acres do you own?
Are these minerals under production?
You need to request an explanation of exactly what the title problem is and what they want you to do about it.
The answers to some of the questions I have just posted will tell you how much your mineral interest is worth, so you can determine what you need to do.
Feel free to contact me offline if you would rather.
Carla,
Was you grandmother's estate probated? In Oklahoma, mineral and land needs to be probate usually, their are a few exemption. If it wasn't, you can usually do a couple of quick times to clear the title, when I say quick, that is 2 to 3 months, not years at least. Also, do you live in OK? That may also change how you can do things.
How much minerals acres are we talking about? Sometimes the cost to clear a title is more than what the minerals are worth.
Hi Virginia, I don’t know if my grandmother’s estate probated as 45 years ago and never received paperwork one way or other. I’m out of state so not inclined to hire attorney to clear title. It’s 320 acres. Right now, inclined to forgot whole thing. I was contacted by company in question-cautiously underwent timeconsuming process contacting consultants in OK, etc before signing lease. I do think companies should have legal research/paperwork in order before offering leases to potential mineral owners. This whole matter has been very unpleasant.
Carla,
This does not need to be unpleasant and sorry to hear that your experience has been that way.
You do not need to forget the whole thing as there may be an opportunity for you to make a little money at least by leasing and then potentially in the future through production.
Please don't give up.
You mean 320 acre gross right, not net?
Carla,
If you have 320 A of minerals, it would be worth you while to hire an attorney and get it cleared up. I live out of state also, but you can do a lot of research on line and if it's not free, it's a small charge to be able to print things off. Go to " www.okcounties.org Then put in Logan, they are on line. I can't remember what is the first date of the on line recordings, but I know it's at least 10 years. Also, you may call the Logan Co. Clerk's office and tell them your legals and if they have time, they can see if there is a probate recorded for you grandmother. The cost of a copy of it is very reasonable.
Is there some other family member that is involved in this mineral? They may have a copy of the probate.
On your lease, did you mark out where you would guarantee the title?