We recently found out that our names are on a “clouded title” and have been told by the company trying to buy from us that we only own the leasing rights. This O&G company apparently bought the land and mineral rights from a relative and now they are trying to get a “clear” title with a “quit claim deed” from us to take our names off of the title. Question is how can we find out what the value of what we have is and whether it would be best to keep the leasing rights or try to negotiate some kind of settlement with them? The property is in south east Borden county but north of JB Thomas lake, and we don’t know if there’s any wells or production in that area or not. It’s for an area that is 326.75 acres, and the company says they will begin prospecting operations. Is hiring an O&G attorney the only way for us to find out the value of what the leasing rights are worth? I’m sure we have many questions, but we really don’t know where to start and who can answer our questions other than the company trying to buy us off of the title? Please help if you have any knowledge of this kind of thing. Thank you
A quit claim deed is really worthless in Texas. Don’t let them scare you. 326.75 Acres is a lot of land and mineral rights. Do you have any idea of the % of the mineral interest you own? How could you own the leasing rights and not own minerals or royalty?
You need to obtain copies of the deeds to determine exactly what you own before negotiating with the prospective purchaser. Leasing rights can be separated from the minerals, most commonly when the owner X sells a portion (such as 1/2 minerals) of minerals to buyer Y and X retains the right to lease the minerals sold to Y. This is not the same as a traditional NPRI. Y’s minerals are under the lease terms as signed by X and Y is entitled to see the lease. So you need to look at the deeds to see how the minerals have been assigned over time. For example, did X sell surface and 1/2 minerals to Y, but retained the leasing rights? Then did X sell the remaining 1/2 minerals to Z, but retained the leasing rights. Then X (you) have the leasing rights. Ask the O&G company for the deeds to prove that you only own leasing rights and not any minerals. Read the original deed creating the leasing rights carefully as the seller X may have also retained the lease bonus or other rights. You also want to figure out if the O&G company owns 100% or only a portion of the minerals which were owned by a relative. Also, if the minerals have been subdivided into multiple owners, then you might control leasing rights for a lot of mineral owners. Is the O&G company the future operator or only going to lease out to a 3rd party operator? You have to gather a lot of information before you can value the leasing rights.
No, a quitclaim deed is not worthless, it is complete waiver of whatever your rights are. Before you sign away any rights, consult with an oil and gas attorney who can do a quick title search and find out what you really own. Are you really going to trust these people who are trying to get you to waive your rights to tell you what you own?
Lake Thomas straddles the line between Borden and Scurry County. Saying just north of the lake is a big area. If you can post more detail on the location of the mineral interest (County, Block and Section) someone can help you pin down the status of production there.
Below is the current Railroad Commission map of that general area. The green dots are vertical wells. The ones with a line through them are no longer producing. It looks like there are several horizontal wells near or under the lake.
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