Canadian 25-13N-06W Marathon Production/Royalty Confusion

#1

First, thank-you for this forum which is very helpful to many individuals out there like us. With your help and support we can be more educated and have better understanding of rights as a mineral owner.

We signed a lease with Marathon Oil 2 years ago and production began Jan. 2018 on the Brenda Chapman 1306 1-25-36MXH. We received our lease bonus from Marathon May 3, 2017. First payments began August 2018 to 5 of our first cousins who also signed the lease with bonus at the same time with the same terms. We did this in unison as a family. Our first cousins have received checks since that time. There was a slight exception when there was some sort of subsurface equipment problem and payments stopped in 4th quarter for a bit.

We (my brother and I) to this date received a Royalty check in Jan. and Feb. only. We all own the same amount and same terms as our first cousins. We’ve asked questions to the Owner Relations Support from Marathon but are given only a case number so they can investigate it.

On April 11th, 2018 an Affidavit of Heirship was supplied and acknowledged to Marathon Oil upon request. We were placed on the Oklahoma Mineral Owner Registry as of 9/14/17 We were asked by Marathon to provide extra documentation of ownership in July 2018. We provided the information needed to them. They then requested the documentation of “Decree of Final Distribution” for our deceased father to be filed at the Canadian County Court House. We did as they requested. That document was filed January 09, 2019. After the document was filed we received January and February checks. No check this month though… so, we assume there must be another production problem.

Should the royalties that have been paid since August 2018 be retroactive to the date of production and first payment for my brother and me? I have looked up the PUN for the last 12 months which shows production and am slowly learning how to navigate through terms, rights and understanding of our responsibilities as mineral right owners. Sitting, waiting and doing nothing has shown zero results. Any advise will be appreciated at this point. Again, thank-you!

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#2

Keep after them! If you are friendly with the family, see if you can get copies of their check stubs for the missing months so that you know what you are owed and for which months. If you have the same number of acres, that would be handy, but if not, then that is okay.

Yes, you should get retroactive payments back to the date of first production. Reminding them that they owe you interest may also get their attention. Since you had a title issue, it will not be the full 12%. 6% up until Nov 2018, then a lesser amount after that. Every communication should be in writing with a certified mail return receipt. You can follow up with an email, but you want stamped documentation. (In my opinion, the Oklahoma Mineral Owner registry is not that helpful.) You must file your heirship records with the county clerk. Those are the official ones. I see that you did that, so now all parties can find the chain of title.

Using the family check stubs, you can notify MOC that you are missing the following months of payment…and are hereby requesting payment of those funds and the statutory interest.

They are dealing with thousands and thousands of mineral owners, so it can take a while to get everyone straightened out.

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#3

Thank-you so much Ms. Barnes. Your information has already been put to good use when Marathon called us by phone this morning. They were unable to fully explain why we have not been paid. I understand the account was placed in suspense until the final document was filed in Canadian County BUT, the funds should have still been accruing from the August 2018 production date and paid with interest once cleared. You clarified what I believed to be true. I have been reading up on rights and responsibilities of mineral owners.

From now on…we shall send additional correspondence in writing with certified mail, return receipt. We will gather check stub info from our other family members. The woman I spoke with this morning assured me we don’t need to do that yet. They are going to investigate it further and get back with us soon. I do understand it is a big sea, and we are just the little fish swimming against the tide. It is critical to educate ourselves and be proactive, professional and not confrontational with the companies dealt with… seek to understand instead. Your comment of “dealing with thousands and thousands of mineral owners” is spot on. We shall be pursuant but patient and hopefully all will pan out for us.

Again, this forum is an amazing asset to mineral right owners… especially new ones who have never stepped into this world. My wife and I are both retired educators of 30+ years. This is a new arena for us.

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#4

Welcome to the big pond with all of us little fishies. Your family did a smart thing to all negotiate together. You have more power that way. If you are interested, there are several other good resources. National Association of Royalty owners (NARO) is a nationwide royalty owner advocate and education group. They have a presence on the Forum. Type In NARO in the search engine. They have annual state conventions in various states and also a national convention. A good book to read is Look before you Lease by Bill Stafford. Might be a bit retrospective since you already leased, but explains terms nicely. Read the Mineral Help above and the blogs. Ask many questions. Canadian County is very active. Another useful thing to do is to search out the operators in the area and look up their investor presentations online. Gives an idea of what is going on and future plans. Read them with a grain of salt as they are trying to get investors to buy in, but they are useful.

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#5

Ms Barnes,

Marathon contacted us again today. We have found that all of us own 5 acres in Track 5 . BUT… 5 of the first cousins own an additional 10 acres in Track 6. We are all confused on why the additional acres are owned by them and we are not included.

The story of inheriting these rights is interesting… There was an African American women who was befriended by my grandmother somewhere around the 1920’s in Leadville, Colorado. Because of her color she was not real welcome, and pretty much ostracized at that time. The woman left Leadville and went back to Oklahoma. Upon her death, she left the mineral rights to my grandmother who in turn left it to her children. At the time of the original deed there were 5 children in total. 2 of the adult children died and the only ones left were the 3 daughters, one which was my mother. The 3 sisters then inherited the mineral rights.

Marathon says they see that we (my brother, nephew and myself) own 5 acres in Trac 5. The others own an additional 10 acres in Trac 6. We are all feeling baffled as to why they have the additional 10 acres and we don’t. My question is: Now what? What would my first step be to try to search the origination of the additional 10 acres in Trac 6? Marathon said it is up to us to seek and file documentation before they will acknowledge ownership in Trac 6. Any direction is appreciated.

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#6

First you have to figure out what the definition of Tract 5 is versus Tract 6. Can be done. When was the original deed and do you have a copy of it? Actually, Marathon has a title opinion, so odd that they said they wouldn’t help you. The first thing to do is to go back and ask them for a copy of the paragraph from the division order title opinion that pertains to you. “So you can put it in your records.” If you have a friendly cousin who owns the extra 10 acres, he/she should wait a few days and then ask for a copy of the division order title opinion that pertains to them “so they can put it in their records”. Then you compare them.
Back to tract 5 and 6. Does the division order have a description of the tract 5? Something like NW4 NW4 NW4. Does the division order of the cousin have a description of Tract 5 (should be identical) and tract 6-different. This is going to be a several step process.

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#7

Yes, we have a copy of the original deed dated December 12, 1939. I have e-mailed or Relations Analyst and requested a copy of the paragraph from the division order title opinion that pertains to us. I also asked for the definition of Tract 5. It is hard to decipher it on the division order we received. We will also ck with family members to compare descriptions. Hopefully that has been a step in the right direction. Thank-you.

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#8

Your advice paid off Ms. Barnes. Thank-you for your help in directing first steps. Marathon was able to produce evidence that Tract 6 which is 10 acres had been separated by our mother to our deceased sister. We were not privy to this information, nor were her sisters. This was a tough pill to swallow, and quite painful to discover for us. It was done 1 year before our mother passed with cancer.

Something so important to remember though… is that anything given as an inheritance is not to be viewed as entitlement… but,as a gift. This chapter is closed… and the past is the past. Our sister passed early and in the long run really didn’t gain. We are grateful to have been given the 1.6666 acreage of rights. A gift…

Thank-you again for your help. We now know what we have, and will continue to learn more about this mineral right world we swim within. Ebb and flow. Sink or float.

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#9

So sorry to hear that happened. It does, but you have a great attitude. These all are gifts to us.

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