Mineral owners may not even know that they inherited mineral rights from their deceased relatives or friends. They don’t deal in mineral leases on a daily basis and should not be expected to be an expert on leasing and mineral interest! They may have “needed” the money yesterday or last year. They simply want to be treated fairly and PAID in a timely manner! Oil companies usually have “partners”, the interest get’s divided in many different ways, many people are involved, that should not be an excuse.
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You seem to be wanting to transfer the responsibility for property management to the oil company which has no basis in the property other than the OGL operation requirements. As an example, you use a financial advisor when you do not feel qualified or do not want to manage your stock portfolio. This obviously is a service that comes at a cost and measurable results. In the alternative, you educate yourself, manage your own portfolio and are directly responsible for the results. Although this is not a perfect comparison, it does serve to highlight the issue.
People want to receive the best offer and the easiest title curative work for effectively next to no cost, but this is not realistic. Everyone makes economic decisions on cost versus revenue/value. If the property has value to you (such as your house), then you have the obligation to put in the work to maintain or increase the value. When you elect not to maintain or invest in the property, then you cannot expect to receive the best value.
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You do realize that its on the mineral owners to file deeds/probates etc, dont you? A title attorney can only go off what is filed of record. So when an estate/mineral owner doesnt file anything, the title attorney can only represent the given facts and treat the potential heirs as strangers in title if nothing is filed. No offense, but the argument you are making is becoming downright silly.
The oil company might not be stalling. I think oil companies have 6 months before paying royalties on a new producing well.
If 90% of the title problems are from wells many year’s old then the companies have had plenty of time to sort the title issues.
Summary of this discussion: Title work is very valuable, and very few people have it in hand to justify their arguments. I’ve had the same thought for two decades now: I don’t believe anything a person tells me about property rights, wills, trusts, or probates until I see the documentation. Most people are arguing over assumptions and have no (complete chain of) paperwork in hand to justify it.
That being said, I’ve found numerous mistakes in royalty decimals that were caused by erroneous interpretations at oil companies. Sometimes in my favor and sometimes not. If you have proper documentation, the vast majority will fix the issue. Larger companies may take more time, but I find them to also be diligent in their review. The worst problems I’ve had are small companies who prefer to play games and kick the can down the road. Sometimes they don’t employ knowledgable people. Thankfully I have good legal resources to handle those on rare occasion.
If you are newer to this forum and minerals, having a complete chain of title on your minerals (at least the ones with justifiable value) is priceless. Very rarely is proper documentation passed down, so building organized files of your assets and preparing it for the next generation is a very wise investment of your time and a little expense.
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This discussion has indeed mixed two different issues that confront mineral owners. First there is the problem that many families have little or no paperwork about their minerals. Some people simply throw out all paper and records that are older than a few years. Other times, there is no will or probate or deed which document title from generation to generation. It is not uncommon for some heir to decide that the value of minerals is too low to justify the costs of probate or ancillary probate. And they then throw out any records or fail to send them to future heirs. This is a real complication when the minerals later become valuable. If the trail goes back multiple generations to great-grandfather who does not have a unique name and the family has moved and split up into multiple families with divorces and people not communicating, then tracing the heirs and determining exactly each one’s fractional interest can become extremely difficult. And it gets more and more complicated every year - did Uncle Rob had 2 sets of children? Did Aunt Mary die before or after her parents and siblings? This happened a lot in the 1990’s and early 2000’s, as oil dropped and revenues from producing properties fell so low. It is important for younger generations to know their family history, to sit with older relatives and learn about the family and assets and decisions. And some older relatives get worried about losing control and so become secretive. Second, some mineral owners only consider this to be mail-box money and have little or no interest in spending the time or money to research title and deeds, follow well activity in the area, read on-line blogs or papers discussing leasing issues and terms, etc. It is not necessarily different from other areas of their lives. Keep in mind that the most part, everyone wants the best end of a deal, whether for a house, a car, or a mineral lease. You need to protect yourself by constant vigilance as to what is going on in your personal home neighborhood and your mineral neighborhood. That way your are as prepared as possible for what is coming. Certainly there are some bad actors out there. But for the most part, leasing agents, landmen, division order analysts, lawyers and others are overwhelmed with activity and paperwork. They deal best with owners who know what they are doing and have all the relevant documentation at hand. Best thing mineral owners can do is amass and organize all the records and pass it on in full to the next generation. Bring on the file cabinets and scanners!
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Not to be rude, but despite all your posts targeted at me and a few others, you clearly dont understand how any of this works. Hopefully youll read this and mull it over 1 more time so that it sinks in. ITS NOT THE JOB OF OIL COMPANIES TO UPDATE MINERAL OWNERS INTERESTS
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Exactly! Most landmen and some lease brokers have never seen an abstracted title from the Mid 1800’s through the near present in a paper volume. It is a very time consuming amount of work. I have one on some of my property that was done in 1981 and updated each time I’ve leased since then. Most brokers are reluctant to give the updated title. But usually the “in house landman” will require them to give it to me. Also I like to have the broker email me the lease and memorandums in addition to the paper lease. I’ve kept everyone all through the year’s as well and the Releases. My son is a CPL and a Senior Landman. Thank you for your answers and advice.
I love this discussion. I agree.
Carol, just wanted to come on here and say you are correct - at least based on my experience as a mineral owner in North Dakota. Operators (otherwise known as oil companies) can wait up to 6 months from the first sale date of oil from a new well to pay the mineral owner royalties. They can withhold payments for up to 6 months on the flush production, but at the 6 month mark all past revenue becomes due and the owner begins receiving monthly royalties going forward.
I think a lot of this is being lost in the idea that title issues are the only things that come up in disagreements betweel oil companies and mineral owners. There are just so many more issues that can come up. Most OGLs stipulate that any requests be sent via certified mail anyway, it protects both sides in a way. Ive seen issues regarding what constitutes an actual spud date for starting a well before a lease terminates (seen it be 2 days before expiration), to how many days they have to pay royalties before interest is incurred, to failure to notify unleased mineral owners of activity on their minerals. All of this gets magnified with the way a lot of companies swap lease acreage in order to get sufficient drilling units. Things slip through the cracks, and its not always just about title. End of the day, you should have copies of all communications and send official requests certified mail.
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Most quality people and professionals will give you the title on your Interest when you are ready to sign the lease if you ask. It should be part of the lease agreement! It cost them nothing to provide it to the lessor as they have researched it while they are preparing the lease.
I agree being nice is best. A mineral owner could make friends by email or phone with someone that works for the O&G company. I did this with our very first O&G company. I learned what was going on, if a producing well had several paying zones, how much they cost to drill, if it was a dry well, if salt water messed up the rig, when & where will a new one be started. It is fun!
Thank you, North Dakota. Let’s not forget the royalties held in suspense after the 6 month O&G company has to pay interest. Yay! I dont know how much interest O&G company is required to pay. Does anyone know?
Huh? It cost operators quite a bit of money to run a title opinion on a well. When you say, give you the title. What exactly do you mean by the title? The line item row in which you own that provides you with little to no info unless you really know what you are doing which does not appply here? Not many if any title attorneysoperators are handing over a full title opinion with every conveyance listed. Needless to say, at the end of the day its still on the mineral owners and not the operators to update their interests with the County Clerk, no matter how much further right or left you move the goal posts to fit whatever narative it is that you are trying to.
I think he’s referencing the chain of title that outlines what a mineral owner actually owns, the deeds, conveyances, wills going back to when the state first deeded the property to someone
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Costs them nothing? You don’t think it takes time to edit a Title Opinion down to only include a chain of title for one mineral owner? Time is money. Please remember that the next time you ask a Landman to jump through hoops for your benefit while thinking it costs them nothing.
That TO is proprietary information that is not required to be shared. If portions of it is shared, it is done as a courtesy. Please treat it as such.
Hi James,
Is it appropriate to call an oil company to ask if they’ll be expanding to a specific area?
Or is there a place to see this online?
Thank you!
Which companies arent going to send out, theyd have to spend the time to edit the conveyances so that other mineral owners arent shown. Again, all of this is on the mineral owners, despite whatever you all may say.
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