Production lease modification

Almarine Hogue actually gave one child a separate 15 acre tract, and divided the 90 acres among the other 7. A couple sold their interests to another one etc.

Yes, I have a copy of the will and all the deeds… I am traveling and don’t have them with me. Working from memory. The child that got the 15 acre piece I think is the one who bought out his sibling…

Some sold minerals and some just the land. My great grandmother sold the land but kept the minerals.

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Last fall, my family (Simonton)-- well, chiefly I-- began to investigate our minerals ownership. My family (with one or 2 exceptions) died out or moved away from Ritchie County 50 years ago, but we retained substantial minerals on 2 100-acre plots there. Since then, I have downloaded and analyzed about 100 land deeds and minerals leases, corresponded with oil companies (most of whom didn’t respond to either mail or phone contacts), and just recently spent a week in Harrisville (county seat) doing my own “abstract” and meeting with an attorney (Windom). I’ve now learned a great deal, but still have questions and unresolved issues. One odd opinion from the attorney is that, because the generation previous to me signed, in 2014, lease modifications (renewals) of an 1899 lease, we were locked into those terms-- 1/8 (12.5%) of oil, and $200 per year flat rate for all gas. I will refuse to accept that; if anyone knows the specifics of the law mentioned elsewhere here about a law passed later which disallowed those old flat rate royalties, please cite chapter and verse for me. Lawyer told us that, once signed, a O&G lease is unbreakable and effectively for perpetuity, since the law reads “as long as there’s production or the potential of production” on the land. We’ve never received more than about $50./year in royalties, even though some wells produced continuously since 1899 (and 4 of those vertical wells are still producing). The companies currently involved are Alliance (vertical wells), CNX (9 fracking wells on 117 acres on Black Run Road), and Antero (exploration soon on Hushers Run Road). Antero is currently constructing the infrastructure (pipelines, etc.) along Hushers Run to expand their current wellheads (we visited 2 well sites with about 12 wellheads between them). We’re told by our fellow owner and resident that Antero will begin producing on the new wells within 6-8 months. We also met and got very valuable information from a man who’s family has been in that business there for 75 years, as well as from the fella who owns the minerals along with us on the Antero plot. The latter has negotiated a 19% royalty with Antero on a contiguous plot of land. Our further problem has been that for about 25 years a distant family member appointed himself our family’s “attorney in fact” without any family member’s knowledge (that we can determine), has collected all royalties, and now says he “can’t remember” how he distributed them. In any case, I will continue to pursue this matter with the current oil companies, with my peculiar relative, and with perhaps another attorney, since I was not happy with the one we saw when there. For those of you unfamiliar with how “division orders” work: First, oil companies identify several hundred acres on which they want to drill. Since those rights often belong to more than one owner, they then form a “pool” of owners and solicit the signing of lease contracts with them. The royalties must then be divided up among the member owners of that “pool”, with each share proportional to their share of the pool. Then, the contracted royalty is figured for all the pool members and divided among them. Finally, each member owner’s share must be divided among heirs (we have about 30 heirs in our family). That often results in small percentages for each heir, often hundredths or thousandths of a percent, depending. Oh, and BTW-- one of my other relatives has offered to buy out anyone interested in selling minerals shares in Clay District, Ritchie County. Our family’s heirs are the descendants of William Simonton who inherited from his father, Pennsylvanian John Wiggins Simonton, a 200-acre “family farm” between Hebron Road and Black Run Road, and who then bought another 100 acres soon after on Hushers Run. I’d be glad to share any information I’ve gleaned which is not proprietary in nature.

Read this article.

Good article. It clarifies that the 1982 law revised the old flat rate leases-- it only applied only to new wells based on old leases, not on the old wells. That leaves us, as Lawyer Windom said, flat. Clearly, someone somewhere is getting rich by sucking the natural resources out of West Virginia. It’s incumbent on public officials-- the legislature, governor, etc.-- to take action to make this equitable. After all, the more royalties are paid, the more tax money the state and each county receive. However, I’ve been told the O&G industry spends millions lobbying the state’s government to their advantage. If mineral owners called up a large convention in Charleston and together hired a law firm to sue for their rights, that might scare the oil companies and politicians alike to take action.

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We still have the vertical producing well on our land. The production is the minimum they can report to keep the lease in force. We have believed for years that it wasn’t actually producing. With fracking going on under the verticals there should be a spike in production. It will be interesting to see.

One thing to remember is that many of the owners of the oil and gas in West Virginia live out of state and thus cannot vote in WV elections. I think the legislators are aware of that.

I was told by knowledgeable folks, on my trip, that producers know how to keep leases in force even when they’re not producing-- even tiny amounts produced qualify the lease to be continued in perpetuity, and the lawyer said the law also says this applies if the well “is potentially productive”, whatever that means. Of course, noting in fairness that the production companies enforce policies which any business uses-- they maximize profits, bending and interpreting every law to their advantage. Having served as CFO of a retail corporation, I can’t blame them-- but we owners can follow the same principle, bending and interpreting those same laws to OUR best advantage. Re your verticals, BK-- our friend told us of a 'strike" when they started 2 of the fracking drillings-- they broke through into old reservoirs of oil in dormant vertical wells, producing unexpected large oil production. Unfortunately, that happened before the “10 year” statue of limits, which leaves us out. I went to 2 well sites and visited; I was told “you’re trespassing”. My reply was, “I OWN a piece of this so I’m going to stand here, out of the way, and watch MY oil and gas being pumped out of the ground my forebears farmed on.” They backed down. I’m not scared of snakes, or Klansmen, or dog-killing drunk hunters (at least one of each of those live on my road), or even a night in jail, so I damn sure ain’t scared of no oil companies.

That’s true, but still, a bit short-sighted of them if so. After all, many owners who live out of state likely have relatives still living IN-state who might influence voting through family channels.

I think the best way to influence the legislators is to lobby them (and donate to their campaigns) as much as the O&G companies. Very difficult to do because the companies have a lot of money. However, I know that some of the legislators are paying attention to emails so we can write.

I highly recommend the Windom Law firm if you decide to hire a lawyer. He’s very experienced in these matters and is very knowledgeable and his fee is reasonable.

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Beth,

I strongly concur with your assessment of the Windom Law Firm, I have worked with all of their Attorneys on various matters over the past few years. I have never had any complaints and what they have done with the home to transform it into their office, is stunning.

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Agree Re Windom firm. Very knowledgeable about WV O&G law!

An update on my search. As an experienced (academic) researcher, I “mine every rift”, exploring every possible connection to our (former) land and minerals. Based on hints I picked up on my road trip, I explored once again the websites maintained by the state, including the “old” (pre-2016) well maps. As a result, I discovered that 5 smaller oil producers have rigs on our lands with active, producing vertical wells, from which we receive no royalties nor have we ever signed leases. Sometimes, I wonder if some of these aren’t “wildcatters”–producers who are like minerals “squatters”. That’s a question I intend to get an answer to. These are the websites I’ve consulted:
https://apps.dep.wv.gov/oog/wellsearch/wellsearch.cfm http://tagis.dep.wv.gov/oog/ https://www.mapwv.gov/parcel/

I too have found the same. I discovered it on the tax rolls and had s long conversation with Exco and got two of the three AOI numbers. Just haven’t had the time to run it all down. These are in Doddridge county.

API numbers. Autocorrect is driving me crazy.

Here is a site WVGES Downloads site where you can find (maybe) information and documents if you have an API number. Here is the link to Weekly Reports of the WV Office of Oil and Gas. Find the instructions. Once you log in, you can select “PERMITSOOG” from the list at the left, then put in the API number according to instructions. You will find at least something for almost all API numbers. Almost always there is a plat of the property and the well, but it might require hunting around. Historical info for the old wells with API numbers and very interesting. Sometimes the surface owner’s name is on the plat, so it helps to know who was surface owner for the various years.

Interesting they can put a time limit on this but can go back generations when it comes to using decades old leases they say cannot be changed.

Excellent point. Things are definitely tilted in their favor. Some of the wells I’ve found are 100 years old and still producing! I actually met the man who operated the “compressor” on one of these, back in the 1950s. My family name, Simonton, is plastered all over well sites all over that area; maybe that’s a trademark infringement, since they’re not paying royalties. NM’s point about surface owners is also a good one; I’ve sought to identify exactly where (geographically and cartographically) each plot of land is, and who owns it now, but that’s a challenge when it’s been redivided and changed hands so many times over the years. It doesn’t help that the county road maps are frequently wrong.