Visiting north dakota. how to verify inherited mineral rights in divide county

Oil and Gas Leasing Help
1

We would appreciate suggestions on how to verify mineral rights ownership. We will be visiting North Dakota next week to interview O&GL attorneys and wonder if we should spend time while there investigating ownership.

We have been alerted by a landman that our family inherited 10 acres of mineral rights in Divide county ND many years ago. The landman does not have documents readily available and is unsure the 10 acre figure is correct.

We also find that there is a producing well on our acreage, and that accumulated royalties are likely sitting in a suspense account somewhere.

What would folks suggest we do to verify mineral rights ownership? We want to minimize cost, so would rather not spend money with a consulting firm. Do we go to the Crosby recorder's office and sift through records. Do we call the office first, or what?

Thanks for any and all suggestions! Bill

2

If it were me I'd call the county courthouse first, maybe they will help some. The people I've talked to are pretty nice. I'd also call that landman back for where and what he saw, and please send me a fax of what it is. If there are names or dates you can do some research online if it is not too old:

NDRIN North Dakota Records. You'll need to pay $25 a month for awhile to get the online search feature. It is a great site to use!

www.NDRIN.com

Or you might have to go to the county courthouse and look. I hope it is for real and not a scam!! GOOD LUCK!

3

Certainly find out why such a small acreage!

Any landman you see at that courthouse could set you on the path to find info

This lady is very helpful-

jodykuntz77@gmail.com
Hi Larry,
I'd be more than happy to help you with your situation. I managed to have GMX run scared without spending a dime on attorneys, but have great team to help you also.
4
Texas AFE explained http://www.rmmlf.org/proceedings/AI56Boling-FarmoutSupplement.pdf
Scroll here http://www.irs.gov/irm/part4/irm_04-041-001-cont01.html to Basically, there are two types of interests in oil and gas properties: operating and non operating. The most common types of interests are also described as working interests and royalty interests. See Exhibit 4.41.1-2. The distinct difference is that the working interests bear all the operating costs of the property. [after their share of drilling cost penalty comes out of production in North Dakota, which is also according to the % of minerals they own, and the advantage continues as long as any production continues] The royalty interests are free of all operating costs except taxes. There may be several royalty interest owners and working interest owners in a single oil and gas property . [which proves that no mineral owner is forced to sign a lease] Greed or intelligence here? You decide: http://www.examiner.com/article/the-lockout-rule.

Texan ND mineral owner Robert Kennedy <robk_982@hotmail.com>; has answers for you.
Things do happen to get a lease signed.
Supposedly, the bank drafts a lessee uses have a specific bank account number on them from which the funds will be withdrawn to pay consideration to the Lessor.
If there is no valid recorded lessor, then what?
In our case, the lawyer who formed a Trust in 1998 omitted 2 parcels on the mineral deed , the lessee never tried to find the Trust document where I was Successor, contacted my sister in Laos, convinced her to sign the lease as Trustee [which she had to return to lessee without being notarized ,pretended lessor submitted a phony affidavit to the recorder ,she had one brother receive and disburse the payments after 2 of 5 Trust members ratified the 2009 'lease' in October 2009, and she in February 2010 [with no money trail from the lessee to anyone authorized to expedite the 'lease'] ,lessee had our sister ratify the 'lease' in February 2010 as an individual, and no matter the fact that 2 Trust members never ratified the 'lease' that should have been handled solely by the valid Successor, there are 6 producing wells done as if there is a valid lease, and the producer referred a lawyer of their choice to our unauthorized sister, which lawyer then expedited a phony mineral transfer that identified only part of our minerals in February 2013, in a brazen attempt to validate it as being subject to the 2009 never notarized as to any Successor signature 'previous lease' ,with the now accurately described 1998 minerals put into a 2003 Trust our sister WAS supposedly legally authorized to act within, empty for nearly 8 years, after being formed in June 2003 and used solely for transfer of real estate in June 2006 before sold in July 2006, that I later discovered had already been deeded by our Mother to this same brother on 4/19/2000, who rented out his house for all those years without recording his deed.
5

Larry, while it is no biggie to me, You might ask someone before you post their e-mail adress on the internet.

6

More on becoming an unleased partner in wells here- http://bakkenshale.com/search/?q=AFE

7

I have seen some of the downspacing mentioned for SM Energy and it was successful from the start and I expect will be even more successful in the future when the field pressure is so depleted that the pump will be efficiently producing the shorter laterals.

Larry, we are off topic in this thread, maybe you should start a new one.

Larry Wagenman said:

More on becoming an unleased partner in wells here- http://bakkenshale.com/search/?q=AFE

8

Bill, yes you (or someone) need to go through the records at the county courthouse. Then if you wish to confirm what you own (10 net acres, or some other amount) you'd follow the chain of title on the property from the initial USA patent up to the present. Once you have the legal description you can go to this site to find out who homesteaded it, www.GLOrecords.blm.gov .

After the homesteader patent you need to meticulously follow the deed from one owner to the next (making a copy of every deed for future reference). That will show you when, or if, a previous owner might have sold or segregated some of the mineral estate before you owned it. In other words, if Great Grandpa Joe left your Mom "1/10th" of his minerals you need to know if he still owned 100 acres of minerals, or 200 acres, at the time he deeded that "1/10th" to her.

To expedite your hunt start gathering all the information you can before you arrive in Crosby. Call the landman again to see if he can provide any more info. To get started some of what you want to know is;

A full legal description. The Township, Range, Section (or Sections), and the NW, SW, etc...

The party whom you ("our family") inherited from, ie... Great Grandpa Joe Buckalew, or Aunt Alice Jones...

The date (or at least year) these minerals were inherited from that party.

Why the landman believes it was inherited. Do they have a copies of a deed, a will, or some estate papers?

If their information was from a probate or estate, ask which county and state it was filed in.

Arrive early at the courthouse and explain to them you are new to this business. If they're not too busy they'll probably help you get going.

IF you have the full legal description, you can trace the ownership through the "Tract Books".

IF you have the party's name, you can trace prior and subsequent ownership of those minerals via the "Grantor & Grantee Index".

This is not rocket science, though it is a little too complex to fully describe here but either of the above avenues may get you going. Though be sure and gather all the information you can before leaving home. Depending upon the size of the property, and the number of hands this passed through, this could be a full day's effort. Just make copies of all the related deeds so you can review it more carefully after gathering your data. Good Luck

9

Mary Beth: Thanks for the information. The website looks encouraging. Bill

Mary Beth said:

If it were me I'd call the county courthouse first, maybe they will help some. The people I've talked to are pretty nice. I'd also call that landman back for where and what he saw, and please send me a fax of what it is. If there are names or dates you can do some research online if it is not too old:

NDRIN North Dakota Records. You'll need to pay $25 a month for awhile to get the online search feature. It is a great site to use!

www.NDRIN.com

Or you might have to go to the county courthouse and look. I hope it is for real and not a scam!! GOOD LUCK!

10

Larry: Thanks! This is most useful.

The links provide a lot of background information that help me understand much more clearly many aspects of this upstream business. The second one, in particular, answers a number of questions I had as I was developing the cash flow model we will use to evaluate the economics of lease vs non-consent.

Also, your unfortunate experience with one of your deals gives us some pause, which we will bring up with the attorney we are about to retain.

Thanks again, Bill

Larry Wagenman said:

Scroll here http://www.irs.gov/irm/part4/irm_04-041-001-cont01.html to Basically, there are two types of interests in oil and gas properties: operating and non operating. The most common types of interests are also described as working interests and royalty interests. See Exhibit 4.41.1-2. The distinct difference is that the working interests bear all the operating costs of the property. [after their share of drilling cost penalty comes out of production in North Dakota, which is also according to the % of minerals they own, and the advantage continues as long as any production continues] The royalty interests are free of all operating costs except taxes. There may be several royalty interest owners and working interest owners in a single oil and gas property . [which proves that no mineral owner is forced to sign a lease] Greed or intelligence here? You decide: http://www.examiner.com/article/the-lockout-rule.

Texan ND mineral owner Robert Kennedy <robk_982@hotmail.com>; has answers for you.
Things do happen to get a lease signed.
Supposedly, the bank drafts a lessee uses have a specific bank account number on them from which the funds will be withdrawn to pay consideration to the Lessor.
If there is no valid recorded lessor, then what?
In our case, the lawyer who formed a Trust in 1998 omitted 2 parcels on the mineral deed , the lessee never tried to find the Trust document where I was Successor, contacted my sister in Laos, convinced her to sign the lease as Trustee [which she had to return to lessee without being notarized ,pretended lessor submitted a phony affidavit to the recorder ,she had one brother receive and disburse the payments after 2 of 5 Trust members ratified the 2009 'lease' in October 2009, and she in February 2010 [with no money trail from the lessee to anyone authorized to expedite the 'lease'] ,lessee had our sister ratify the 'lease' in February 2010 as an individual, and no matter the fact that 2 Trust members never ratified the 'lease' that should have been handled solely by the valid Successor, there are 6 producing wells done as if there is a valid lease, and the producer referred a lawyer of their choice to our unauthorized sister, which lawyer then expedited a phony mineral transfer that identified only part of our minerals in February 2013, in a brazen attempt to validate it as being subject to the 2009 never notarized as to any Successor signature 'previous lease' ,with the now accurately described 1998 minerals put into a 2003 Trust our sister WAS supposedly legally authorized to act within, empty for nearly 8 years, after being formed in June 2003 and used solely for transfer of real estate in June 2006 before sold in July 2006, that I later discovered had already been deeded by our Mother to this same brother on 4/19/2000, who rented out his house for all those years without recording his deed.
11

Larry: Thanks. Lots of good reading here. I appreciate it, and will have ample to do over the next several days. Thanks again! Bill

Larry Wagenman said:

More on becoming an unleased partner in wells here- http://bakkenshale.com/search/?q=AFE

12

Thanks!!

I accessed the BLM record database link you supplied and located the patent that includes the 120 acres under which our 10 acres of mineral rights are supposedly located (Divide County Border Township 161N R95W 33 ). What seems strange is that the patent refers to the Minot Land Office, rather than Crosby, which is the Divide County seat. We need to call the Crosby recorder and see where to go.

Thanks again for your help!

Bill



Eastern MT said:

Bill, yes you (or someone) need to go through the records at the county courthouse. Then if you wish to confirm what you own (10 net acres, or some other amount) you'd follow the chain of title on the property from the initial USA patent up to the present. Once you have the legal description you can go to this site to find out who homesteaded it, www.GLOrecords.blm.gov .

After the homesteader patent you need to meticulously follow the deed from one owner to the next (making a copy of every deed for future reference). That will show you when, or if, a previous owner might have sold or segregated some of the mineral estate before you owned it. In other words, if Great Grandpa Joe left your Mom "1/10th" of his minerals you need to know if he still owned 100 acres of minerals, or 200 acres, at the time he deeded that "1/10th" to her.

To expedite your hunt start gathering all the information you can before you arrive in Crosby. Call the landman again to see if he can provide any more info. To get started some of what you want to know is;

A full legal description. The Township, Range, Section (or Sections), and the NW, SW, etc...

The party whom you ("our family") inherited from, ie... Great Grandpa Joe Buckalew, or Aunt Alice Jones...

The date (or at least year) these minerals were inherited from that party.

Why the landman believes it was inherited. Do they have a copies of a deed, a will, or some estate papers?

If their information was from a probate or estate, ask which county and state it was filed in.

Arrive early at the courthouse and explain to them you are new to this business. If they're not too busy they'll probably help you get going.

IF you have the full legal description, you can trace the ownership through the "Tract Books".

IF you have the party's name, you can trace prior and subsequent ownership of those minerals via the "Grantor & Grantee Index".

This is not rocket science, though it is a little too complex to fully describe here but either of the above avenues may get you going. Though be sure and gather all the information you can before leaving home. Depending upon the size of the property, and the number of hands this passed through, this could be a full day's effort. Just make copies of all the related deeds so you can review it more carefully after gathering your data. Good Luck