Fractured Families = Less Money


#1

Below is an article I wrote for the NARO ROAR for July 2018:

FRACTURED FAMILIES = LESS MONEY

BY: WADE CALDWELL, PRESIDENT, NARO-TEXAS

Almost daily, I visit with mineral owners who have divided ownership within their families. Many of these families have fractured relationships, allowing operators to come in and deal separately with the family members. The truism of “divide and conquer” is never more applicable than these situations.

Operators are all too willing to use these unfortunate circumstances to their advantage and to the mineral owners’ detriment.

Fractured families mean less money for mineral owners. Families which continue to negotiate together will generally do better in the long run. The more net mineral acres being negotiated means more leverage. More leverage equals better deals. Working together in managing minerals can help maintain, and even mend, relationships within families, beside the obvious economic benefit.

The causes of family fractures are too many to list. Old injustices, real and perceived, lack of estate planning, lack of trust, lack of communication, and sometimes a plain lack of effort to stay connected, all contribute. There may well be family members who are so distrustful, difficult, or untrustworthy, that they have to be carved out of the group, but if there is any way that the family can negotiate together, the benefits are numerous. In addition to the increased leverage, managing minerals together often results in reduced costs of being able to split professional fees, more uniform communication, more responsiveness from operators to questions, and a more marketable mineral property for development. Landmen and operators like to deal with one representative for a family instead of multiple individuals. If the family can agree on a manager, forming an entity to put minerals in to, also saves time and money in not having to update title every time a family member dies or sells their interest.

Michael Morton, who spent twenty-five (25) years in prison for the murder of his wife, was released and exonerated in 2011 when DNA evidence implicated another man. Mr. Morton has since written a book and has spoken about his experiences. One of his most poignant messages was why he had forgiven the judge, prosecutor and others that were involved in his wrongful conviction. In his eloquent words, “I realized I was the one drinking the poison and hoping someone else would die.”

So maybe that new lease offer is also an opportunity to bury the hatchet, mend fences or make that phone call. A better lease and deal may be the result, but the benefits can be more far reaching.


#2

Excellent article. Thanks for all you do at NARO. Just got back from the Texas NARO convention. Great speakers, good networking with old friends and made new friends. I encourage mineral owners to join your state chapter!