30 year old lease discovered in deceased relatives files, could mineral ownership be claimed by family?

General Mineral Rights Discussion
#1

Hello-

Am hoping someone on this forum can provide some insite. I am a mineral owner in MI and am familiar with that state's rules/laws, however, this question pertains to UTAH.

We recently discovered reference to a mineral lease from 1980, held in my husband's Grandmother's name. She had moved from Utah to VA at the time that what looks like a lease extension took place. We are assuming she must have retained the mineral rights when she sold her surface rights for this lease to have been extended after she moved. I have talked to the country clerk in Sanpete County and am told there is no dormancy rule in Utah regarding mineral rights, so we assume that means the mineral rights don't go back to the surface owner without being deeded to them. The Grandmother was deceased in 1990 and there was no will, however, her son (my husband's father) had documents pertaining to a 1980 lease in his possession. The son is now also deceased. Assuming the deed was never transferred (we would have to send someone to Utah to go through the books to be sure), is it possible for acres to be lumped into a unit for which an oil company was unable to locate the owner of record? If so, does the surviving family of the deceased have any claim to the mineral rights and any activity that may have involved the property after the owner of record was deceased? The county clerk's office indicated some of the property in question is included in an adjacent lot that is currently leased. I'd like to note this does not involve many acres and is more an inquiry of curiosity than greed :)

Thanks for any guidance in this matter.

#2

Hi Jennifer, I’m definitely not a lawyer or an expert and I know absolutely nothing about Utah; however, I have read that oil production proceeds from mineral acreage may be put into escrow if the mineral rights owner can’t be located. Also, if the grandmother didn’t will the mineral rights to anyone specifically, it seems as though they would go to her descendants according to the inheritance laws of her state. Don’t know what happens when assets are discovered long after the owner’s death, it could be you’d have to reopen probate to have them legally transferred to the heirs.

“is it possible for acres to be lumped into a unit for which an oil company was unable to locate the owner of record?” This sounds like force pooling, and since (I think) forcepooling is done by a court order without the agreement of the mineral owner even when the owner is known and can be notified, it seems as though it would also be done in the case of an owner who can’t be found.

Of course, even if the acreage was force pooled into a unit that subsequently produced a profit, there may be a limit to how long profits are held in escrow for a missing owner.

If it were me (and again, it’s not like I really know, I’m just learning about O&G issues myself), I might investigate the area around my acreage to find out if there have been any profitable wells over the years in the first place. If there haven’t been any good wells close enough for your mineral acreage to have been pooled into the same spacing, then I suppose your possible rights to past production profits would be a moot point.

Then maybe you could ask questions on some of the O&G forums re: how much you might potentially realize from your mineral rights in the future if your area becomes profitable (which it might due to improved recovery technology). I don’t know, but it’s possible that it would be worth pursuing even if you have only a few acres. I don’t think it’s greedy for you to check this out - the grandmother probably wanted her family to receive something from the mineral rights, or she would have sold them with the land. Good luck! Carol

#3

carol,

Thank you so much for taking the time to reply. I will look into it further to see if there has been any actual production since the time of the lease and go from there. Thanks again!

Jennifer

Carol Byington said:

Hi Jennifer, I’m definitely not a lawyer or an expert and I know absolutely nothing about Utah; however, I have read that oil production proceeds from mineral acreage may be put into escrow if the mineral rights owner can’t be located. Also, if the grandmother didn’t will the mineral rights to anyone specifically, it seems as though they would go to her descendants according to the inheritance laws of her state. Don’t know what happens when assets are discovered long after the owner’s death, it could be you’d have to reopen probate to have them legally transferred to the heirs.

“is it possible for acres to be lumped into a unit for which an oil company was unable to locate the owner of record?” This sounds like force pooling, and since (I think) forcepooling is done by a court order without the agreement of the mineral owner even when the owner is known and can be notified, it seems as though it would also be done in the case of an owner who can’t be found.

Of course, even if the acreage was force pooled into a unit that subsequently produced a profit, there may be a limit to how long profits are held in escrow for a missing owner.

If it were me (and again, it’s not like I really know, I’m just learning about O&G issues myself), I might investigate the area around my acreage to find out if there have been any profitable wells over the years in the first place. If there haven’t been any good wells close enough for your mineral acreage to have been pooled into the same spacing, then I suppose your possible rights to past production profits would be a moot point.

Then maybe you could ask questions on some of the O&G forums re: how much you might potentially realize from your mineral rights in the future if your area becomes profitable (which it might due to improved recovery technology). I don’t know, but it’s possible that it would be worth pursuing even if you have only a few acres. I don’t think it’s greedy for you to check this out - the grandmother probably wanted her family to receive something from the mineral rights, or she would have sold them with the land. Good luck!
Carol
#4