(Beckham county OK) My mother inherited mineral rights from her parents. When she passed on they became mine and my brothers, my father was still living at the time, so my brothers and I signed our shares over to him. he had a five year lease that expired in 2009..he pass on in 2008. We want to regain owner ship and understand what we have. where do we start? how do we regain ownership and where do we go to find out the value?
"Where do we start?" I suggest that you start with the lease that expired in 2009. You need to clear title to the mineral rights by making sure that a Release of Oil and Gas Lease is filed of record in the deed records (or lease records) of Beckham County. You should write to the Lessee at the address given in the lease to request a Release be prepared, signed, and mailed to you. That will take the cloud off your mineral rights overall.
Next, turn to getting the mineral rights into the name of you and your siblings, in the public deed (or lease) records in Beckham. Did your father leave a Will AND was it probated? It only counts if you can answer "yes" to both, but if the answer is "yes" then contact the lawyer who handled the probate to make sure the Beckham deed records reflect you and your brothers as the new owners. If he left a Will but it wasn't probated, or didn't leave a Will at all, then you need to get an Affidavit of Heirship form and complete every question fully in it (put "N/A" if a question doesn't apply), attach an original copy of the death certificate, get it notarized by a notary, and file it into the deed records (or lease records) of Beckham County. An Affidavit of Heirship uses the Oklahoma laws of descent and distribution to show in the record that what your father once owned is now owned equally among all of you children.
As for finding out the value, you can go to the expense of hiring a licensed appraiser or you can use the general rule of thumb that many accountants use when valuing mineral rights when preparing a Final Inventory for a probate action. That rule of thumb is to find out how much income the mineral rights have had in the past 36 months and use that as the current value. If the mineral rights have not produced, then the value technically is zero unless there is valid reason to believe a formation capable of production is beneath the land and it just hasn't been drilled yet. Remember, the value of the mineral rights generally will be valued based on at least a 3/16ths royalty since that is the most common rate negotiated in new leases in Oklahoma these days.
Just a word of advice: as long as the mineral rights are not producing they will not be taxed, so it costs you nothing to hold onto them. And with horizontal drilling technology advancing by leaps and bounds, it's entirely possible that in just a few years a barn-burning gusher well could be drilled that could bring in hundreds or even thousands of dollars of monthly income. Will you kick yourself in 3-5 years if that happens after you've sold them for $500 to some royalty-buying company?
Thank you, that is a lot of valuable information. I'll put it to good use.
Marsha Breazeale said:
"Where do we start?" I suggest that you start with the lease that expired in 2009. You need to clear title to the mineral rights by making sure that a Release of Oil and Gas Lease is filed of record in the deed records (or lease records) of Beckham County. You should write to the Lessee at the address given in the lease to request a Release be prepared, signed, and mailed to you. That will take the cloud off your mineral rights overall.
Next, turn to getting the mineral rights into the name of you and your siblings, in the public deed (or lease) records in Beckham. Did your father leave a Will AND was it probated? It only counts if you can answer "yes" to both, but if the answer is "yes" then contact the lawyer who handled the probate to make sure the Beckham deed records reflect you and your brothers as the new owners. If he left a Will but it wasn't probated, or didn't leave a Will at all, then you need to get an Affidavit of Heirship form and complete every question fully in it (put "N/A" if a question doesn't apply), attach an original copy of the death certificate, get it notarized by a notary, and file it into the deed records (or lease records) of Beckham County. An Affidavit of Heirship uses the Oklahoma laws of descent and distribution to show in the record that what your father once owned is now owned equally among all of you children.
As for finding out the value, you can go to the expense of hiring a licensed appraiser or you can use the general rule of thumb that many accountants use when valuing mineral rights when preparing a Final Inventory for a probate action. That rule of thumb is to find out how much income the mineral rights have had in the past 36 months and use that as the current value. If the mineral rights have not produced, then the value technically is zero unless there is valid reason to believe a formation capable of production is beneath the land and it just hasn't been drilled yet. Remember, the value of the mineral rights generally will be valued based on at least a 3/16ths royalty since that is the most common rate negotiated in new leases in Oklahoma these days.
Just a word of advice: as long as the mineral rights are not producing they will not be taxed, so it costs you nothing to hold onto them. And with horizontal drilling technology advancing by leaps and bounds, it's entirely possible that in just a few years a barn-burning gusher well could be drilled that could bring in hundreds or even thousands of dollars of monthly income. Will you kick yourself in 3-5 years if that happens after you've sold them for $500 to some royalty-buying company?