Hi everyone,
I recently posted on here was told to come here for some needed help. My grandma lives in Bakersfield, out in middle of nowhere it seems but she wants to look into leasing her land for minerals. We are both clueless on this, just don't know too much about the process or even what company to look at. To me it seems there is just so many of them which is scary to us. Then who do you trust or even go with? I am a waitress and actually a customer gave me some information how I even ended up posting on here before I received a very nice response to my post to come here. I thought she only had 5 acres it turns out she has 8 acres of land. I am just trying to protect my grandma and help her with this. I guess the prices go by acres I heard $35.00, then $25.00. I just don't have a clue about this! I would so love any help you guys can offer us also any good companies that are not going to just come in rip off my grandma.
I don't know much, either. But I think the first thing you need to do is find out if she owns the mineral rights. A person may own land ("surface rights") but often does not own rights to what's under the ground. I did that for my mother (who does not own surface rights in Kern County, but does own some mineral rights there) by hiring a "landman." I spent about $300 figuring out what rights she owned and where and about how much they might be worth. In this case, it was a matter of two sections of land (1 section = 640 acres). What I found out is that she actually owns a very small fraction of the total mineral rights. It was common practice in the early days to sell mineral rights separated from the surface rights in small fractions. So, my mother only owns a part, maybe less than 1%, of the total mineral rights to the two sections (which unfortunately is probably not even worth enough to pay the landman's fee). You can also spend a bunch of time learning what the landman knows and try to find out for yourself, relying on country records etc. But it would be time-consuming and the results would be unreliable. Bottom line: If you think your mother owns the mineral rights because she owns the surface rights (what ordinary people simply call "owning land"), then you might be (or probably are) wrong. If you are only dealing with less than 10 acres, it is probably not worthwhile hiring a landman (who could give you definite answers, but charges per hour for research). IF YOUR MOTHER DOES OWN THE MINERAL RIGHTS, THE OIL COMPANIES WILL HAVE TO DO THE TITLE RESEARCH ANYWAY AND THEY WILL CONTACT HER ABOUT THE LEASE. (At least, that's where I wound up in this matter.)
Ashley,
I think you may have better luck over here as there is more activity and more information
http://www.mineralrightsforum.com/group/kern-county-ca-oil-gas
Ashley:
This is happening all over Kern County these days. People who did not know that they had mineral interests are being found by the oil companies (or, more accurately their landmen) and seeking leases.
If they came to your grandmother it is because title has shown that she has a mineral interest. Given this (and the information below on warranting title) I would not spend any time or concern on whether she holds title. Let the oil company worry about that.
Twenty-five dollars per net mineral acre is low. Thirty-five dollars is probably acceptable given that it is such a small interest. I am finding that the oil companies may not be willing to budge, however, with such a small interest. So, twenty-five is better than nothing. Royalty of 1/6th is standard. Do not settle for 1/8th. Of course, it is the hope that they drill and produce oil so the royalty (which is what is paid from the production) is the key term.
Finally, look the lease over. There is typically a provision for warranting title (in a very standard form used here in Kern County it is paragraph 29). You will want to cross that provision out with regard to warranting title because your grandmother would not want to guaranty that she holds title since she did not know that she had it in the first instance.
Hope this helps!
Dear Ms. Smith,
I will help you and your grandmother. No charge. Befriend me and I will privately send you instructions to get in touch with me.
Buddy Cotten