Has anyone ever had an oil company interested in purchase pay for the probate/summary administration? If so how do you make sure that the probate is completed timely so you receive payment prior to first production pay out to the oil company?
Can only speak from own personal experience. We've had buyers offer to pay for some work since they have lawyers and we did not. I think it depends on how motivated the buyer (oil company) is. My experience is in Oklahoma and we did have to go through a probate there. In OK a summary administration probate is fairly quick, I think it was completed in about a month. Seems it would be in the buyers best interest to complete the probate and other matters as quickly as possible. The sooner they get all the paperwork out of the way the sooner they get at the minerals. When you talk of receiving payment are you talking about payment from the oil company for purchase of your mineral rights? What is the connection between the probate and first production payment you talk about?
Think twice, you must have valuable minerals.
Typically the oil company wants first production monies, correct?
If you have signed an agreement to sell and the title curative (which includes probate) hasn't been completed, once the first production monies are ready to be distributed, where do the funds go? Trust or does the seller hold until the title curative (probate) is completed? When do you sign the mineral deed? upon receipt of the funds of the sell?
Hope that makes sense.
Will do. I would just like to have things in order. It's me my sister and mom. Some want to sell others not. I'm the gather of info:)
I may be missing something here but once you sign an agreement to sell and the buyer has done their due diligence (searched the title, etc.) and the deed is clear, you sign the deed and from that date on the buyer/new owner gets everything that comes out of the well, you would no longer have any interest unless you didn't sell 100% of your mineral rights. You mention "first production" which tells me that there is a new well or will be a new well. If there was any production before you sell you would get your percentage of it but if you sell before there is production the new owner (oil company) would get it (providing you sold all your interest). As far as payment schedule (in Oklahoma) it is about 5-6 months from first sale (first production of a new well) before the oil company has to start paying so the first check is large since it's for several months production. One question here would be, is the oil company (the company drilling the well) and the new buyer the same entity or are they two different entities? As for signing the mineral deed, the buyer probably would want it signed a.s.a.p. so that they will start getting the production money, as for getting paid, most people are going to tell you that you should be paid at the time you sign the deed or very soon after so to do this some will want papers signed at the bank and the money change hands at the same time OR make an escrow agreement through a lawyer or other reliable agent (middle person) who will hold the signed deeds until the buyer pays the money. I don't know if that answers your question.
Don’t be too impressed by an offer to pay for the probate. It isn’t as expensive as some would have you believe. The cost can be shared by those who are to inherit. Some attorneys will work on for some amount of acreage if payment is a problem.