I have recently acquired the deed to 6.56 mineral acres in McClain County, OK that the Huston Energy Corporation out of Enid wants to purchase in a bad way. They’re offering me almost 5k for the lot. Please understand, I know nothing about mineral rights, leasing vs. selling - and I would know even less if my mother hadn’t passed away. Huston sent a letter to my mother, and then literally two weeks after she passed away sent one addressed to me. Firstly, does anyone know what they found? Secondly, how does one even begin to look into a lease agreement with an energy company for monthly royalties and what would a fair rate be? The only thing I do know is that if an energy company wants to buy your mineral acres it’s because they found something and you should never sell until you find out exactly what that is. Any advice would be appreciated…
You are wise to hold off in replying. BP America has filed for an increased density hearing to drill four more Woodford wells there. The Millsap 6N-W-26 1HX well is currently producing. They want those extra royalties and they hope you don’t know about them.
First of all, contact BP AMERICA PRODUCTION COMPANY - Division Order Analyst
1100 N BROADWAY AVE STE 200 OKLAHOMA CITY, OK 73103-4937
and inform them of your mother’s passing. You will have to complete the probate process in order to transfer title to the correct heirs. She should have been in pay status for the well. You would have to clear the title if you were to sell as well. You need to have the executor give you a step up basis for the mineral value as of the date of death. You will need that if you decide to sell in order not to pay as much in capital gains, especially since these would be short term gains if less than a year held. Ask BP what they need in order to change the title.
However, given that four more wells are planned, your gut feeling was right. Most of us hold onto our acres if more wells are coming our way and we do not need to sell. If you do need to sell, then that is a completely different conversation and there are some tips to use.
I don’t believe my mother was receiving any money from her holdings. My wife and I had essentially been handling her finances since January and saw no deposits. Again, we know nothing about this except for the fact that as soon as the probate process is over we have 6.56 acres somewhere in OK and we live in NC. Is there anyone you might recommend speaking with since frankly, we don’t know what we’re doing? Not to put too fine a point on it, I understood maybe 60% of that original post. If it helps, her will did name me as sole executor.
Joseph: Martha Barnes’ post basically said that it appears that companies are about to begin drilling in McClain County. That is why the offers are coming in. They may be fair offers or poor offers. Mistakes when selling minerals include, too low of a price, deeding more than intended, warranting title for the buyer, sending the deed based upon a draft (which looks like a check) or promise of payment.
Regarding probate, you did not mention whether the probate is in NC or some other state. If it is not in Oklahoma, it is extremely likely that you will be told that an Oklahoma probate is necessary. This can be done without the necessity to travel to Oklahoma.
M_Barnes
do you happen to know if BP got approval on the 4 additional wells?
Which section, township and range are you asking about? If it is 26-6N-2W, then case 201807564 is still pending.
case 61-70 they are all still pending?
Yes. You can follow progress on the OCC website. If you know the case number, you can look them up online. OAP
So if the case is still pending for an increased density study, does this mean there is the possibility that the estimated value for my mother’s mineral rights could go up based on the results?
In addition Richard, the probate for my mother’s estate is in North Carolina and the clerk of court last week did tell me I would in all liklihood have to go through probate in McClain County, OK. I don’t know if you can answer this or not, but would you know if I would have to complete the probate process in NC before I could start the probate process in Oklahoma? I apologize if I seem virtually ignorant to all of this, it’s because I am. My wife and I are new to the estate & probate process in general, to say nothing of probate as it pertains to mineral rights.
I will let Richard answer his part. We are in a probate right now. We had to do the probate in the state of residence of the decedent and then file a foreign probate copy in OK in every county where there were minerals. As to the value, our engineer is doing the evaluation now. All the tracts that have increased density hearings are getting a slightly higher evaluation if the case was at the OCC as of the date of death. This particular person was way below the federal limit of $11+MM so a higher step up value is useful. In estates that might bump one over the limit, the increased density filings might not be counted.
If you have already started a probate in NC, it may be beneficial to complete that before the Oklahoma probate. Lots depends of the facts and the requirements of your NC procedure.
If there are no unpaid creditors, Oklahoma has a few options for quick resolution of probate.
I have partial ownership of this same property. I hope you held onto your rights. When BP owned the property, my tiny little portion averaged $30 a month. As of 9/23 it seems some new wells were operating and the earnings have gone to $850 a month. Lime Rock Resources now operates the property. Contact me if you see this post. This conversation was long ago. Thanks, Sarah