Current signing bonus and royalty rates for Ritchie County, WV


#1

I was looking to get some information on the 2018 going rates for signing bonus and royalty rates for oil and gas leasing in Ritchie County, WV.


#2

I was recently offered $1750 bonus and 18% royalty for a Clay district small tract.


#3

Was that $1750 per acre or in total? Thanks for your reply.


#4

$1750 per net mineral acre. The landman said the company would not budge from that number. I am not sure about that. Things are getting a little busier lately. The tract in question is somewhat west from the active area, so probably before lone the price starting offer will get higher.


#5

Patty,

Bonus rates are fluctuating quite a bit in Ritchie County right now, you will find anywhere from 3,500 - 500 ; NMA, all depending on location and production company. I would strongly suggest you concentrate on the royalty rate, deductions and other terms, than the bonus rate. EQT regularly takes as much as 50% in deductions from mineral owners.


#6

Hi, do you have any knowledge of current marcellus shale lease bonus rates for Union District, Ritchie County, West Virginia? I received an offer today for $1,000 per net acre for all right title and interest in a 13 acre leasehold with payment in 120 business days from Antero Resources. Any suggestions , ideas, or local attorneys to consult?


#7

Hi, my family is currently working on a lease offer with Antero in Clay District, Richie County. I don’t know how that area compares to Union District. We haven’t finalized anything yet but current offer is $1,751 per net acre. I am not sure what an ‘all right title and interest’ means. I haven’t seen that exact wording in our offer. We are using the law firm Dinsmore & Shohl (Christopher Plybon) and they have at least 5 offices in WV. We are working with the Huntington office. Good luck!i


#8

Thank you for the information. I haven’t decided what to do. I think their offer might be on the low side. Antero is NOT offering any royalty, but a straight purchase of all our rights and ownership in and to the minerals (oil and gas). Best wishes to you for an equitable transaction. Please, if you don’t mind, keep me apprised of your outcome. Again, thank you.

Joel


#9

Are you wanting to sell or lease? I have had many offers over the years to sell but none from Antero. That does sound low for either sell or lease. We don’t want to sell because it is a family inheritance handed down from my great-grandfather.


#10

Sell. Antero advised that their title examination revealed we owned a tract held by production. We thought we had sold all of our oil & gas interest in West Virgina in over 103 wells at the end of the 1980’s. Missed this one tract. A total surprise to us, but it appears they are correct. So we are evaluating whether this offer is equitable and what their next one to five year development plans will be. Please stay in touch. I hope & pray you make a good decision. Thank you.


#11

Taxman, Is this is Royalty Interest or a Working Interest? I have concerns that it is NOT a royalty interest, someone needs to have been paying the property taxes on the parcels, otherwise they would have been sold at the tax auction.


#12

Regarding property taxes, I was told by Antero that my family and I (who are mineral rights owners, not land owners) are responsible for property taxes. I’m from Florida and that sounds strange that the land owner isn’t the one to pay “property taxes?” Does anyone know if this is correct? I’m assuming if correct that it is not the same per se as true property (actual ground) taxes, but rather that perhaps they call it property taxes as you own the “property” of the mineral rights??


#13

Yes Angie Muse it is correct that mineral rights that have been separated from the surface (“severed”) are (or should be) taxed. Some counties in West Virginia seem to feel that they do not need to do this until there is production on the tract and thus revenue going to the royalty owner but other counties, such as Ritchie, are following the state law. Sometimes when “grandpa” sold the farm and moved away he kept the oil, gas and mineral rights (or some combination of these) and sometimes this slipped through the cracks of getting taxed. When a company such as Antero does a title search to start leasing with the plan to drill, they discover these rights and trace the owners to the present day. If the mineral rights (shorthand for oil gas and minerals although sometimes “minerals” means NOT oil nor gas) were taxed, the tax should go to “grandpa” at his new address. When “grandpa” passes away, sometimes one of his children keeps paying taxes in the name of “grandpa”, not changing things. The trouble happens if someone (“grandpa” or someone else) stops paying the taxes, either because of a move without remembering or knowing to notify the county tax office, or because the heir thought the mineral rights were useless and paying the tax was a waste of time, or something. Back to your original idea, the surface owner should be getting a separate tax ticket for the surface interest. Hope that makes sense.


#14

Hi Nancy,

Thank you so much for the very detailed, easy to understand explanation. When I asked Antero about this, they said I would be receiving a tax bill in the fall. I’m assuming the other mineral rights holders will as well? Also, this may be a crazy question, but I’m truly not sufficiently informed in this area, so my question is, if the tax bill is for example $1,000…is that split between all mineral rights heirs?

Thank you again for your help! I truly appreciate all of the information.

Angie


#15

Hi Angie, Usually the county property tax bills come out in about the second week of July, and any changes happening after July 1 of 2018 would come out in the July 2019 taxes. I am not sure what Antero means about a tax bill coming in the fall. You might ask again, get clarification about just what tax bill they are referring to. I am assuming your interest is in Ritchie county since that is the topic here. If not, there are other places to find out something about the other counties. Ritchie County Tax website This is the website for Ritchie county taxes. You can search by name and a few other ways. If a property, let’s say oil, gas and mineral rights on 50 acres, is still in the name of “grandpa” or “heirs of “grandpa””, all together, going to somebody as “in care of”, then it will just be one bill. If the interest has been divided up among heirs of “grandpa”, for example he had 2 children, each of them had 2 children, so one of those grandchildren would own 1/4 undivided interest in the 50 acres (undivided because it is not divided into 4 tracts of 12.5 acres each, with each one of the 4 heirs owning only one 12.5 acre tract but owning instead all 4 heirs own all the interest together, each 1/4 interest) anyway if the interest has been divided, then the tax should also be divided. Each of grandpa’s grandchildren would get a tax bill for 1/4 OGM on 50 acres, and the total would be 1/4 of the total tax on the full 50 acres. This can of course change if someone had a will and left the interest to someone else, or some other scenario. I am not sure that I have answered your question. Do you have something else in mind? Does this make sense?


#16

Hi Nancy and Angie, My great-grandfather sold the family farm but retained the mineral rights. When he died he left it to his two sons equally (one being my grandfather) and when my grandfather died the rights ultimately went to my mother. My siblings and I inherited them when my mother passed away. The tax bill continued to come to my mother’s address in the names of all her children/heirs named in her Will until we changed it with Ritchie County, WV to start coming to my address. I have paid the tax bill on behalf of myself and siblings since my mother’s death in 2002. All this time we assumed the heirs to my great-uncle’s half of the farm were paying their tax bill. I found out differently when I received an offer to purchase our rights by a representative of the new owner of my great-uncles half. We declined and that got me to look into what happened. I found out that his heirs stopped paying the taxes and the interests were sold on the “courthouse steps” for delinquent taxes and it happened just the year before I got the offer to purchase our half. We were very upset that my great-grandfather’s legacy was now partially owned by someone other than family. Long story short - pay the taxes or risk losing your inheritance! You can actually speak to someone directly at the office where the tax bill comes from. They were very helpful and sympathetic to what happened but they also said that they are under no obligation to inform any other owners of the parcel that taxes were not paid, even though we were half owners. I forgot to say - we always get the tax bill in July and pay it right away, even though the bill says you can pay the first half September 1st and the second half March 1st (for the following year’s taxes,.) We always pay in full when we get the bill. Maybe that is what Antero meant in reference to the fall.


#17

Good information, Patty. I suggest that you plan to get the interest of your mother transferred to you and your siblings separately, or form some kind of family LLC. To get it transferred to the individuals, you need to have documents filed in Ritchie county about your mother’s estate. Call the Ritchie county County Clerk’s office and ask to speak to the clerk who handles probate. I have heard that she is very helpful. There are different procedures depending on where your mother lived (in WV or out of state, if in WV, in Ritchie County or another county) and the size of her estate. It will help the next generation to keep things in order. It is sad that so many properties are lost at tax sales and that there is not some better way for things to be done, but that is the law in WV. They have procedures to send notices to the last known address of the name on the tax ticket, but sometimes the address is wrong. Mostly it is when someone dies and the next generation either does not know about mineral rights (especially true if there is no production from the rights, thus no royalty money), or the next generation does not understand the importance of paying taxes and changing the records at the county courthouse. If there is royalty money involved, there is also the requirement to get things changed with the company. Most require that a copy of the will be sent to them. I forgot if they require the copy to be from the county where the minerals are, or from where the person lived. Changing things with the tax office is very important, but the real solution is to get it all changed with the county clerk.


#18

An additional couple of thoughts. One, there is a discount for paying the full year’s taxes by September 1. Two, there is a requirement that delinquent taxes must be advertised in the local paper for 3 weeks in the late spring, then again in the fall before the tax sale. Even after a tax sale, there is a grace period for the person to redeem the taxes, but it is more expensive than just paying the taxes in the first place. There are two papers in Ritchie County, both weekly, and both run the notices about taxes. Ritchie Gazette and the Pennsboro News. A good way to keep up with the present day home of our ancestors.


#19

Thank you for the info about the newspapers. It is unfortunate that my family was not educated on all of this before taking over from my mother and we are all in Virginia so would not have seen the Ritchie County locals papers even if we knew to look. My great-uncle had moved to Maryland and so his heirs were located there. We did not have any contact with that side of the family once my mother passed. Regarding the tax bill - we have just formed a family LLC and are in the process of moving our interests into it prior to signing a lease agreement so next year the tax bill will be in the name of the LLC. We have spelled out in our Operating Agreement about what is to happen when one of us dies. And I would love to buy back the other half of our parcel but not sure how to go about doing that other than send a letter to them, which I have done with no response to date. Hope for them to not pay their taxes? LOL, Not going to be lucky enough for that to happen!


#20

Patty, tough go that some of your families interest was sold and not kept intact. The courthouse does not care who has or who loses their interest. The only thing they care about is getting the money from the taxes. Since they have the records online they can look up who owns and who owes pretty quick. I contacted a mineral interest buyer past month who bought some of the families interest. They probably hoped no one would find out and therefore never pay a dime of taxes on what they bought. They know now that someone is aware. This mineral interest stuff has stressed out a lot of folks trying to figure who owns and who is paying taxes. We are planning on getting our interest separated and getting our shares on separate tax tickets. Right know we have the tax tickets for 4 tracts. Not much fun contacting all the heirs asking them to help pay. Some I contacted told me they didn’t owe any taxes and they paid their income taxes. Lol. They didn’t say much when I told them they would not be getting their royalty checks If… the mineral rights taxes didn’t get paid.