What are my rights

Ownership and Title
1

A friend's Grandfather was Patentee of 480 acres in Johnson County, Wyoming. In Warranty Deed for sale of Surface following was included

"reserving to the Grantor, Herman Nelson, his heirs and assigns forever, one-half (1/2) of all bonus and rental payments which may be received or derived from the leasing of the interest now owned by the said Grantor in the oil, gas and other minerals in said lands and also so reserving one-half (1/2) of the landowner's royalty which may be received for derived from the production of any such oil, gas and minerals."

My interpretation of the above is that the executive rights for leasing is vested in the Grantee and that the Grantor has a perpetual non-participating royalty interest in the land but I don't know what that interest is.

The tract is under lease until 2019. The Ponderosa Deep Unit document indicates Grantee (Lessor) with 100% of leasehold and no indication of ORRI or other interest holder.

Whose responsibility is it to compensate the Grantor their share of lease bonus payment.

2

Deed interpretation depends on Wyoming statutes and case law and only in context of all the language in the deed. So no one can give you a definite opinion of what was retained by Nelson without all related information. You also need to research the deed records to see if there were any other assignments in the chain of title, whether by the grandfather or other heirs. Usually an oil company will pull the title during the leasing process. Errors can be made. Certainly your friend, if he has inherited, or another heir can contact the oil company to ask. But he should first get an understanding of what he owns by pulling the deeds and probate records and calculating his percentage. The oil company is likely to ask for some evidence of ownership before responding. He may want to consult a Wyoming oil and gas lawyer to help him with this.

3

Thanks. In the 1970's industry issued OGL's to the Nelsons; but in the 1980's the lessee filed Ratification & Rental DO's. It is obvious my friend has some legal work to do to get some kind of title. There has not been any probates from Nelson to his two children and from them to my friend. The OGL of record is for a 3/16th (18.75). I have talked with a couple of other landmen and they are not sure if Nelson heirs get 1/2 of the royalty negotiated if a successful well is drilled. The only other one I have seen that is similar the landowner's royalty was stipulated as being 12. 5 %

4

Gerald,

Your friend does indeed have a lot of research to do before he or she can understand the rights. Some questions jump out at me. (I've 35+ years of experience managing minerals)

  1. Was there a valid lease a the time of sale?
  2. What lease was ratified? Who was the lessor?
  3. What part does any lease have in the Deep Unit?
  4. Has the Herman estate received any DO payments?
  5. Did leasing agents research revenue rights when taking leases?

In any given year, I am involved in a few mineral potential assessments in Wyoming involving many thousands of acres. In my opinion, your friend needs to determine residual rights first then determine how to take advantage of them. I can recommend a couple of people who specialize in Wyoming mineral title research and documentation. Send me a pm and we can go from there.

Gary L Hutchinson

Minerals Managment

5

Thanks, I will talk to the friend, do a little more research and give you a call. I live in the county seat where minerals are located

Gerald