Advising a family member

Oil and Gas Leasing Help
1

To quickly summarize, my mother-in-law inherited the mineral rights to some land in Oklahoma. A few days ago, a man from Sundance Oil called her asking about, what I assume, was leasing those rights.

I have little detail of the offer, how much land, etc. All I was told was that the representative was needing to verify she was the heir to the rights so she needed to provide a death certificate on the original owner and her husband.

From what I understand through my wife who talked to her directly, the lease offer was for $5,000 (again, I don't know how many acres this is for) and 1/9th in royalties.

I am having to hear everything second-hand through my wife and hope to get more details soon but we're treading carefully as not to overstep into her business. She is a trusting soul and is likely to allow herself to be taken advantage of.

My questions are this:

1. I am trying to get my wife to convince her mom that leases and royalties are negotiable and that she needs a lawyer/expert to be involved. What is the criteria for whether or not we get a lawyer involved (how many acres)?

2. Can we sit tight and wait for Sundance to mail her the offer before contacting a lawyer? II am assuming this document would have all the details on the amount of acres, location, etc. which would then give us everything we need to research whether or not the offer was fair.

3. Is there a estimated amount of money lawyers charge for such negotiations?

Thanks in advance for any tips.

2

You don't need a lawyer.

They have land men who are supposed to research all this. They get their information from the courthouse.

You can go with whomever contacts you first (or wait for a better offer, if there ever is one.).

Just be sure it's not already leased. They are supposed to check on this, but sometimes they get sloppy. Once I leased with a company and months later I received a letter from a lawyer saying I needed to repay the money that they'd made a mistake. $3,000+...... That was soon after I inherited the deeds from my mother's estate. Now I really try to keep everything on each section in it's own file. I write everything on the folder...phone calls, etc.

3

Thanks for your reply.

It appears that the mineral rights might be split among a lot more people than originally thought. We don't know if some are even alive anymore. I suspect we have quite a bit of work to do as I assume everyone will have to agree to the same terms.

4



Jeff Fuqua said:

Good luck. You may need a lawyer. I am in the process of setting up a family trust so that the mineral rights/deeds are not split up anymore. That way it can pass generation to generation...of heirs. Thanks for your reply.

It appears that the mineral rights might be split among a lot more people than originally thought. We don't know if some are even alive anymore. I suspect we have quite a bit of work to do as I assume everyone will have to agree to the same terms.

5

Jeff,

I haven't saw a lease in Oklahoma for 1/9 (or less that 1/8 for that matter). In Oklahoma leases for less the 3/16 RI make up less the 5% of all leases filed. In the last few years anyhow.

6

Thanks for the reply. I just found out it is 3/16.

7

Some more info...

This property is 10 acres in Logan County, OK.

11-16N-3W.

I joined that group but would appreciate any insight on activity in the area and what are usual lease amounts per acre, length of lease, etc.

Thanks.