Fractured Mineral Rights...Stipulation...Do we need a Lawyer?

Law & Legal
#1

I am new to this site so please excuse my ignorance!

My Dilemma:

My Grandfather owned 50% of the mineral rights to a "Tract" of "land" in Weld County Colorado. The other 50% is owned by two non family members (each has 25%). They are not related to one another. Through inheritance by siblings and I plus several cousins now own small percentages of the wells.

Recently, we received a letter from the Oil/Gas co. working the wells that new wells are now producing on our "tract". They are holding all proceeds from the new wells because;

"There is conflicting information as to ownership (percentages) and they need to re-examine all documents OR all parties must execute a stipulation of interest with words of grant and cross conveyance to vest each party with their respective interest."

So, my question is, do we need a lawyer to draw up the stipulation? Also, the company seems to be saying that all proceeds will be held until ALL parties have signed a stipulation. However, two of those owners are not in any related to our family. Are we responsible for contacting them and encouraging them to sign a stipulation?

The letter basically ended with information that the new wells are producing and we do have money being held pending resolution.

We are also confused that we still get our royalty checks from the "original" wells...why are the new wells different? Wouldn't our percentages be the same as they are for the older wells?

Hope this isn't too confusing but to be honest I am way outside my comfort zone!

Thank You!

Mary

#2

MRuggles, I started a different reply, but I think it boils down to this "There is conflicting information as to ownership and they need to re-examine all documents or all parties must execute a stipulation of interest with words of grant and cross conveyance to vest each party with their respective interest..... Sounds like a serious pooling error...... I think you need a lawyer, but possibly not to draw up a stipulation, and the operator may be holding alot more money for you than you think, if you don't convey it away.

#3

There may have been something overlooked or missed on the first well when title opinion was done (probably by another company) that this company caught or refused to ignore. Normally the operator of the new well will handle the documents and contacting all owners but some companies will not assist and leave it to the owners to take care of it, I am involved with both situations. If a cross conveyance and stipulation can not be signed by all owners or parties involved then it will take a quiet title suit to settle it. I would ask them to state where (which part in which document(s)) and why they came to the conclusion that there is a conflicting statement of ownership or conveyance of such.

#4

Hi Tim,

Thanks for the response...I've pasted the first paragraph of the letter in this reply to see if you have additional advice! Mary

Tract 2 covers all of the N/2N/2SE/4 of Section 11 less and except a 1.44 acre Tract of land described herein as Tract 1. In his December 1, 1994 Title Opinion covering the SE/4 of Section 11, J. Carver advised, that due to conflicting information set forth in earlier Title Opinions examined by him (the Lavenhar and McLaughlin Opinions), ownership of the oil and gas mineral estate in Tract 2 described herein could not be determined with certainty. However, based on all of the information available to him, Mr. Carver stated it appears that the mineral ownership in Tract 2 was vested 25% in RH.25% in JS. and 50% in PP. et al. However, Mr. Carver advised that "since there is confusion over mineral ownership in Tract 2, as evidenced by the differing tabulations in the Lavenhar and McLaughlin Opinions, RH, JS and PP, et al should execute a stipulation of interests which clarifies their respective interest in that Tract". Nothing appears in the materials examined which evidences this requirement was satisfied.

There may have been something overlooked or missed on the first well when title opinion was done (probably by another company) that this company caught or refused to ignore. Normally the operator of the new well will handle the documents and contacting all owners but some companies will not assist and leave it to the owners to take care of it, I am involved with both situations. If a cross conveyance and stipulation can not be signed by all owners or parties involved then it will take a quiet title suit to settle it. I would ask them to state where (which part in which document(s)) and why they came to the conclusion that there is a conflicting statement of ownership or conveyance of such.

#5

Well they keep referring to various Title Opinions and how they don't have clear information in regard to oil/gas mineral ownership in the new section or tract that is now producing. This is the first we've heard of any Title Opinions or conflicting information in regard to ownership. The only option it seems we have in order to get our proceeds released is to sign a stipulation or have all documents re examined to try and determine ownership. I don't understand why the new section would be any different than the old section in terms of ownership percentage. What do you think?



r w kennedy said:

Mr Metz last sentence was part of what I intended to be my first reply. I wouldn't stipulate anything until I and my lawyer know why it's necessary, what has changed. Did the company tell you what the specific problem is, or did they just say there is a problem and this is the cure we want ? I don't place alot of trust in oil companies, because most I have encountered are not trustworthy. I recommend you not try to cure problems until you are certain that it is your problem.

#6

I'd still want to see what data led to such confusion in the first place. I have had a title opinion analyst tell me my title was cloudy due to a memo by a landman based on nothing that since my aunt had control of my uncles interest that she might have my fathers interest as well, based on nothing! They have it straight now, but it took making the operator party to a lawsuit after 3 1/2 years, to encourage them to straighten it out. Get the truth. I wonder about all the conveyance language they want, shouldn't that already be in the lease ? Why do they need that again ? Wasn't there an original division order where everyone stipulated their interest? Why isn't that sufficient ?

#7

So, if we request the raw data from Noble they will release it to us? They stated we had seven years to settle it and then the money would go to the state (Colorado). According to them the clock started ticking in 2009 but the first we heard of the need for stipulation was 2011. My siblings and I have small percentages since we inherited it from our Mom through her Father. However, we have several elderly Aunts and Uncles still living who have larger shares and we hate to see them not have access to their proceeds. I really appreciate your help. Although, the rep from Noble has been very nice about taking calls and trying to explain it all we still feel that we are likely to get the short end of the stick in the long run!

#8

Must be a wierd statute where you know where everyone is but their money still goes to the state after 7 years. I would call that an untruth until someone showed me the statute. The company is always nice when they need something from you. Get a lawyer. If you can spread the cost amongst all of you great, but I believe you need representation. If anyone can tell me about the statute described above, where located peoples money goes to the state after 7 years, I'd be thankful. I think if you deal with them in writing , you won't hear such things.

#9

Yes, I think you are right and we will have to get a lawyer! So, know any good Mineral Rights Lawyers in Colorado?!

#10

I am sorry to say that I can't. I recommend asking for referral in the county groups under Colorado. Failing a referral from there I would check the Colorado state bar assoc. for an oil and gas attorney. When I needed one in ND, I found the web full of attorneys, I spoke to several before I settled on one. I hope Colorado is a bit less busy and you find one that suits you right off.

MRuggles said:

Yes, I think you are right and we will have to get a lawyer! So, know any good Mineral Rights Lawyers in Colorado?!

#11

Thanks I will do that! I appreciate all your suggestions. As confusing as this all is I also find it fascinating. I'm glad your situation was settled...I never knew oil and gas could be so complicated!

#12