Does anyone share interests, i.e. mineral rights, with J.L. Davis? He has refused to lease with anyone. Does anyone know anything about him?
Perhaps he's waiting on the price to escalate if the wells around you turn out to be big producers.
Or maybe he wants to be a partner with Firewheel.
Either scenario could be good for Mr. Davis..
I also have refused to lease any of our minerals. I am willing to risk loosing the small bonus offers to wait and see how the wells produce. If it is as good as they think the bonuses should go up comparable to the eagleford shale leases. $10,000 an acre and min 25% no cost royalty. In 2008 the offers in the barnett shale went up to $30,000 an acre .But I don't think that is coming back. Also a word of advise if Chesapeake energy comes into the picture, do not deal with them. Biggest corprate theives out there.
Just a note, and I was told this by an oil and gas co, a lot of people will not sign leases waiting on production, however when the oil co, go in and make a reasonable offer and they still refuse, they can petition that they made a reasonable offer, and they will be granted access because it is engergy..and will put the royalties in an account, so that can also happen.
Usually whom ever owns the land and part of the minerals has the biggest say..
That is called forced pooling and it doesnt go quite like that and can be very good for the mineral owner.
It would be used to bring in small unsigned tracts so as not to block the the company from being able to access other signed minerals. It really comes into play with these horizontal wells. This way if there is a 5 acre hold out in the middle of a unit the company can force pool it and drill and accessing all other mineral owners interest.
If you owned a large enough tract 100% they can not force you to let them drill.
There is some ambiguity in my situation, as to who has executive rights, and who has the rights to leasing bonuses. IF Mr. Davis has rights to both, waiting for higher bonuses would not do us any good. Could we lose out altogether on production by his refusal to lease?
Yes we have minerals that it is unclear if it is a royalty or mineral rights. Mineral rights gives you the executive rights but royalty does not. Back in the day a lot of reservations or deeds mention something like one half the usual one eight royalty, which back then one eight was top royalty. This wording has hurt us because the intent was to keep one half but with todays royalties at 25% we get shorted. If you have enough net mineral acres you have the right to access them and Mr. Davis can not stop you this is another case where force pooling comes into play, now if it is only a couple acres the o/g company will probly just go around it. Mr Davis is pro bly very smart on the subject and will do it right.
Diana Taylor Laws said:
There is some ambiguity in my situation, as to who has executive rights, and who has the rights to leasing bonuses. IF Mr. Davis has rights to both, waiting for higher bonuses would not do us any good. Could we lose out altogether on production by his refusal to lease?
We have 240 net mineral acres. There is wording that we get 1/2 the production, with nno mention of royalties.
Toni Everett said:
Perhaps he's waiting on the price to escalate if the wells around you turn out to be big producers.
Or maybe he wants to be a partner with Firewheel.
Either scenario could be good for Mr. Davis..
Diana Taylor Laws said: It will be good for Mr. Davis, but how about for us?
Toni Everett said:Perhaps he's waiting on the price to escalate if the wells around you turn out to be big producers.
Or maybe he wants to be a partner with Firewheel.
Either scenario could be good for Mr. Davis..
Diana I have not heard of the 1/2 production wording, but in my mind that could go either way if you do not want to hire an attorney to argue that it is minerals, instead of royalty you must wait and see what determination the O/G company comes up with. Im sure this wording has been dealt with before and there is a ruling. Have you been approached to lease? If not they probably are looking at it as a royalty only. I wouldn,t worry to much about MR. Davis. he will more than likely strike a better deal than most.
Diana Taylor Laws said:
We have 240 net mineral acres. There is wording that we get 1/2 the production, with nno mention of royalties.
Diana: My family has as bunch of interests in Mitchell and surrounding counties. Most were created by Mineral Deeds wherein the mineral rights (or parts of them) were transferred from one person to another. In some cases I have found "Royalty Deeds" wherein the rights to the Royalties were sold to the family but not the actual minerals. In those cases, the mineral owner had leased the minerals and then sold an interest in the current and future royalties. The amount of those royalties is determined by the original lease. So, if a lease was initiated in 1965 for 1/6 royalty and the mineral holder sold 1/2 of that via Royalty Deed, the royalty deed holder would be entitled to 1/12 of the royalties until the lease terminated. Some of these old leases have remained active either by continous production, drilling, or by activation of very generous "shut in provisions." The bottom line is, look carefully at the "deed" from which you obtained your rights. Is it a Royalty Deed, Mineral Deed, Surface and Minerals, or whatever? I am an Attorney, but not an Oil & Gas Attorney and regularly seek professional advice from Oil & Gas Attorneys which has saved me money and made even more.
These properties have actually been in our family since 1881, at which time we owned both the surface and mineral rights. My family grew cotton "back in the day". We sold the surface property and half the mineral rights back in the early 1980's. There was actually no mention of royalties; in fact, it stated that the seller (our family) is entitled to "half the production".
George, It is real timely that you bring up the subject of royalty deeds.
Went to the abstract office today to update some records and I found where a trust company in Oklahoma had filed a Memorandum of Trust and a Conveyance and Assignment giving 5 individuals mineral interests in May of this year. The assignment is for two separate pieces of property where my brothers and I have 100% mineral ownership, that we can trace easily. I followed the trail of records back to a Royalty Deed executed in 1949, which my grandmother conveyed to a man. The Royalty Deed expired in 20 years (1969) if there was no oil or gas production. There hasn't been.
Since 1949, the man my grandmother made that conveyance to had sold it, or made assignments from it, and now it comes into the hands of those 5 individuals, eventhough I don't think it has validity.
How do you handle that situation? My brothers suggested contacting Devon's land department (they have our lease) and see if this filing changes anything their title work shows, so we are going to do that. I wonder if we should write the trust company a tactful letter and tell them we think the Royalty Deed on which we think they base their ownership has expired? If we don't take care of it now it will be given to the heirs of those 5 recipients. Maybe we see what Devon says and get our attorney to pen a letter to the trust company or the individuals?
There was another parcel of land where we only own a part of the minerals, and this same man did a similar thing, but it didn't involve my family, so I didn't pursue it. I am starting to think he may have sold minerals he didn't actually own to unsuspecting and trusting people.
George D. Cato said:
Diana: My family has as bunch of interests in Mitchell and surrounding counties. Most were created by Mineral Deeds wherein the mineral rights (or parts of them) were transferred from one person to another. In some cases I have found "Royalty Deeds" wherein the rights to the Royalties were sold to the family but not the actual minerals. In those cases, the mineral owner had leased the minerals and then sold an interest in the current and future royalties. The amount of those royalties is determined by the original lease. So, if a lease was initiated in 1965 for 1/6 royalty and the mineral holder sold 1/2 of that via Royalty Deed, the royalty deed holder would be entitled to 1/12 of the royalties until the lease terminated. Some of these old leases have remained active either by continous production, drilling, or by activation of very generous "shut in provisions." The bottom line is, look carefully at the "deed" from which you obtained your rights. Is it a Royalty Deed, Mineral Deed, Surface and Minerals, or whatever? I am an Attorney, but not an Oil & Gas Attorney and regularly seek professional advice from Oil & Gas Attorneys which has saved me money and made even more.
And I forgot, the language in the Memo of Trust is worded like their interest is a "mineral interest". From an expired royalty deed. Doesn't that seem odd?
George D. Cato said:
Diana: My family has as bunch of interests in Mitchell and surrounding counties. Most were created by Mineral Deeds wherein the mineral rights (or parts of them) were transferred from one person to another. In some cases I have found "Royalty Deeds" wherein the rights to the Royalties were sold to the family but not the actual minerals. In those cases, the mineral owner had leased the minerals and then sold an interest in the current and future royalties. The amount of those royalties is determined by the original lease. So, if a lease was initiated in 1965 for 1/6 royalty and the mineral holder sold 1/2 of that via Royalty Deed, the royalty deed holder would be entitled to 1/12 of the royalties until the lease terminated. Some of these old leases have remained active either by continous production, drilling, or by activation of very generous "shut in provisions." The bottom line is, look carefully at the "deed" from which you obtained your rights. Is it a Royalty Deed, Mineral Deed, Surface and Minerals, or whatever? I am an Attorney, but not an Oil & Gas Attorney and regularly seek professional advice from Oil & Gas Attorneys which has saved me money and made even more.
Toni,
Many people do not understand Royalty Deeds (Including Trust Companies). Make sure and look at the language of the deed carefully to make sure the 20 year term was absolute, (As opposed to 20 years if no production, but if there was production, 20 years after production was initiated or ceased. Seems odd that your family would sell royalty interests if there was no lease or anticipated production. Even more strange that someone would buy such an interest. (Who knows what was going on in 1949). If you leased with Devon, they may have already discovered that old royalty deed and determined that it had lapsed. You may not know that based on your agreement with them because generally the mineral rights holder retains all of the executive rights (and hence the right to all of the lease bonus), and you wouldn't know about the royalty owners until the division order was published. Might be worth a call to Devon (or the Landman you dealt with). If you start getting vague or confusing answers, turn it over to your lawyer - he'll charge you, but it will be worth it to make sure you have clear title to the minerals and the royalty interests.
George, There had been a 10 year oil and gas lease in 1946 between my grandfather and a Mr. Casebolt. The man in question was given an assignment of lease from Mr. Casebolt, along with some other folks. Then after my grandfather died, the man in question negotiated the royalty deed with my grandmother. There was a well drilled, but it was never produced. There was a flurry of oil and gas activity during that time, but anything drilled on us was called "a dry hole". There was another oil lease with another company in 1956, then another in 1974, etc... Looks like assignments of lease, and royalty deeds were pretty common. I guess it was a good way to get investors to help fund a leasing and drilling project.
I had been in the process of confirming with Devon what our ownership was, because in the old lease we had warranted title, and I had worries about having to pay money back if we were eventually paid on something we did not own. Devon had showed we had 100% on those tracts, but of course that Assignment from the Trust in Oklahoma had not been filed. So I guess the place to start, would be as you suggest, the Devon landman I talked to previously. If he confirms our ownership, I might write the trust company a nice letter, after our attorney reads the royalty deed and makes sure I didn't interpret it wrong.
Thank you for your help, I really appreciate it : ) Toni
George D. Cato said:
Toni,
Many people do not understand Royalty Deeds (Including Trust Companies). Make sure and look at the language of the deed carefully to make sure the 20 year term was absolute, (As opposed to 20 years if no production, but if there was production, 20 years after production was initiated or ceased. Seems odd that your family would sell royalty interests if there was no lease or anticipated production. Even more strange that someone would buy such an interest. (Who knows what was going on in 1949). If you leased with Devon, they may have already discovered that old royalty deed and determined that it had lapsed. You may not know that based on your agreement with them because generally the mineral rights holder retains all of the executive rights (and hence the right to all of the lease bonus), and you wouldn't know about the royalty owners until the division order was published. Might be worth a call to Devon (or the Landman you dealt with). If you start getting vague or confusing answers, turn it over to your lawyer - he'll charge you, but it will be worth it to make sure you have clear title to the minerals and the royalty interests.
Toni, Mr. Casebolt leased many properties in West Texas in the 40's. I thought I recognized the name and looked at my files for Mitchell County and found a lease by Mr. Casebolt which was subsequently sold to L.E. Edwards and J.D. Thompkins, who then assigned the West 80 Acres of that lease to my wife's Uncle (Paul F. Lawlis). The property (All of Fractional Section No. 25, Block 13, H&TCRy. Co. Survey) was owned by the Wulfjen family (one daughter married a man R.E. Harrell) and leased to W.D. Casebolt in 1946. In 1947, Paul Lawlis assigned the West 80 acres of the lease to S.F. Hurlbut but retained an interest described as "an oil payment in the amount of $120,000.00 payable out of 1/16 of 7/8 of all oil and gas which may be produced.
Paul Lawlis later assigned his retained interest to Lawlis Minerals, Inc which now has three owners, my wife's mother, and two cousins.
I have found several interests which derived from Mr. Casebolt. Small world.
new well permit guys sec 89 blk 26
| Status # 749742 API # 335-35741 | OP # 216378 - DEVON ENERGY PRODUCTION CO, L.P. Pending Approval ,Submitted: 10/11/2012 ,Filed: Online | WULFJEN C - Well # 1H 08 - MITCHELL County | New Drill Horizontal |
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