My family owns mineral rights on acreage in Waller County, Texas, on which a well was drilled and completed in 1984, but never produced. I’m told it was never produced because of “issues” which prevented the installation of a sale line. My two questions are a) Could we be owed “shut-in” royalties for the period of time that the lease remained in effect by virtue of the completed well? And b) How can I get a copy of the original lease - i.e., are these leases recorded in the county clerk’s office? Any information or advice will be greatly appreciated.
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If the well never produced, what exactly do you think you would be owed? The county clerk will have your filed OGL, but if the well never produced, getting a copy of it would be a waste of your time.
Bob, thanks for your response. However, most leases I have seen/signed have wording that calls for the operator to pay shut in royalties in order to hold the lease, if they have a well, but aren’t producing. It’s usually not much money, but if we’re owed something, I’d like to get it. Unfortunately, we don’t have a copy of the lease that was in effect during the period in question. I’m hoping that having a copy of the lease would help determine whether or not we are owed anything. That’s why I was asking if the lease might be recorded somewhere.
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You can find the info on it online. Go to the county clerks and go to public records search. Everythjng will be in there. I just went through similar circumstances. If you are owed any kind of royalty its up to you to do your due dilligence on the property. They might of put more wells on the property. You can only go back a few years on money owed though. Good luck.
The Waller County Clerk/Recorder’s Office should be able to provide that. If they won’t, pay one of the Abstract Companies and they should help you out for a small fee.
You can also go to Texasfile.com, search Waller County, mineral rights, then type in the last name the lease is in, and it will pull up the lease, any assignment documents, etc. For a few bucks, you can download and print the docs.
Shut in royalty payments require a producing well from the base lease. You stated that the OGL was taken in 1984 and the well never produced. Not trying to be rude, but since the well never produced, you arent entitled to payments from a 40 yr old lease/well that never had production.
Given the year of the lease it was in place, you probably won’t find it online. But you should definitely go to the county clerks’ office and dig into those piles of public records to find yours.
In terms of the shut-in royalty payments, you would be eligible for it only for certain period of time defined by the lease term. After that, again, according to your lease term, you might reclaim your acreage and release it if your acreage is not held by production of any wells…
Therefore, obstaining a copy of lease is the first and the foremost action you need to determine the best course of action moving forward. Good luck. Let me know if I could help better. I’m an engineer not a landman though. 
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You must not know much about oil and gas leasing! These people are entitled to have their lease administered properly. If it never produced, then the leases should have expired, don’t you think? If this lease was yours, what would you do just let it sit there with no income or actions of any kind?
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The lease may not have expired if it’s HBP (Hold By Production) by other wells on this lease.
Disclaimer: I’m an engineer, not a lawyer or landman. Please take a grain of salt on my comments.
Several notes. If a lease has expired under its terms, then it is expired whether or not a release is filed by the lessee(s). It is best to follow all your leases and request a release. However, quite a few companies just will not cooperate. You should create a spreadsheet with list of minerals and lease status, with notes as to which depths are HBP. Also, Texas has a 4 year statute of limitations which applies to a lot of oil and gas matters. For example, you only have 4 years to dispute underpaid royalties. It is likely that this also applies to shut-in royalties and a question to ask your oil and gas attorney. If the shut-in royalties were not paid timely and there were no other producing wells holding the lease, the the lease will have automatically expired and nothing would be due. If the lease acreage was HBP by other wells at that time, then the failure to pay shut-in royalties would not affect the life of the lease. But this is where the statute of limitations would come into play. And in this situation there is a 40 year gap.
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Jneves
A point I don’t think has been mentioned is that oil and gas leases themselves are rarely recorded.The only exceptions I’ve seen in Texas are where the State, or some other government entity, held part of the mineral interest, or a lessor for some reason specificly negotiated that the lease be recorded.
Rather than filing actual O&G leases in the deed records lessees generally record only lease memorandums including just the basics…name of grantor and grantee, effective date and lease term. That allows the lessee to meet the requirements for establishing public notice that the lease existences without having to disclose particulars, like royalty amount or provisions, like the Shut-In Royalty Clause, they want to be confidential.
If a lease memo was recorded rather than your full lease, and you already know the name of the Lessee, and/or the operator who drilled the well, seeing a recorded lease memorandum probably won’t help you.
I agree with the suggestion others have made about trying to get a release from the lessee, but with the amount of time that has passed the orginal lessee, or parties they assigned the lease to, are probably out of business, or the lease files destroyed. Your only option to document that the lease has expired may be to record an Affidavit of Non-Production.
You seem to understand that pinning down the particulars of your lease regarding shut-in payments, at the best, isn’t going to result in significant money, but you are still motivated about pursuing this. Waller County deed records that are available online only go back to 1994 so someone making a trip to the County Clerk’s office in Hempstead may be required to determine what was recorded. If that’s not convenient then calling the Clerk’s office and explaining what you are after might be the logical starting point. Some offices will do a limited type search for a fee, or possibly suggest a nearby title company that can help you.
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Well, I did 20-30 division order title opinions in the late 90’s and have leased numerous properties, but yes you know more than me! “Entitled to have their lease administered properly”? What exactly does that mean? Yes, if the the lease never produced, the ogl expired on its own terms, meaning that they wouldnt be entitled to shut in payments, that was my point from my first post on this that clearly went over your head. If it was my lease, given the time that has passed and lack of companies offering new leases on the property from 1984 that never had production on it (from the post) I wouldnt spend time nor money on it and wait for someone else to lease it. Since you know it all, what would you do for a property that had a dry hole drilled on it 1984?
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The time to make the demand for shut in royalties needed to have been made in 1984-85. The statute of limitations has run. Wonder what caused this question to rise up after 40 years. There was knowledge of the well having been drilled and a reason for non- payment - no pipeline. We have had wells with no pipelines. The oil was pumped to tanks and then collected by ACE Gathering as required. If a well is profitable, the producer generally finds a way to get the oil sold.
I thank you all for all the responses, but I’m no longer pursuing this matter. Many of you wonder why this question arose after all these years. It started last year when I called the operator to try and get a copy of the lease (we couldn’t find it in our grandfather’s files). The call was prompted after my cousin got a $13K payment for 20-year old royalties that were in suspense because they didn’t know how to find the heirs. During the conversation, the operator rep told me that the well had been completed, and was capable of producing gas, but the cost of getting ROW and laying a sale line was too expensive. We knew about the well, but didn’t know why it was never brought online. He said that the lease had been allowed to expire, but didn’t know when. He said he would send me a copy of the lease, but never did. Anyway, since the statute of limitations appears to have expired, I’m dropping this one. Thanks again everyone.
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if you give me a well name and survey I can possibly help…I am a 48 veteran geologist…try to help folks for free most of the time…if you are not familiar with the systems it can be daunting…
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