Full Disclosure


#1

Does anyone get full disclosure before they sign a lease? We have been getting offers for land in Sections 23 and 26 in 24S 34E...land we didn't know that we owned (still not sure). We just want a simple answer from those offering, exactly what do we have and are you sure it's ours? But can't seem to get a straight answer. We went to the abstract office to research and a landman had the book we needed and told us he would have it all day, so there went that. Really need advice on what to do. The county clerk told us that if we were getting offers, then it was more than likely really ours, because the landmen get paid to not screw up. Is that basically true?


#2

Landmen make mistakes all the time. they are human and in a hurry. Some are even lazy and don't bother to do the full research. Take the lease, keep the bonus. Their first offer is always a lowball offer, shoot for the moon! do not sign any document other than the lease. I lost out on a big bonus check because I signed an additional form that gave the landman an out if there was a mistake on their end.


#3

That's why have a good OGL attorney to REVIEW the lease is a good idea.

It's not free. Now, as far as the 'do you own it?' question.

If you are getting lease offers, a landman has determined that you own a certain percentage of the MINERAL RIGHTS of a given section of land. Note that you do NOT have to own the surface rights, just the mineral rights.

Your family more than likely either owned the SURFACE portion (land) of the given description and probably sold the surface rights while retaining the mineral rights. HAPPENS ALL THE TIME. Or they either purchased the land with the mineral rights - in which case you would be looking for a WARRANTY DEED. HOWEVER, your family could have purchased just the mineral rights and the would be recorded on a MINERAL DEED.

And a landman telling you he will have the book all day probably meant until he went to lunch, because he can't take the book with him if he leaves the Title companies office to break for lunch.

We have spent a LOT of time in the Elliot & Waldron Land Title company in LOVINGTON. However there is ALSO another Elliot & Waldron Land Title company in Hobbs that has the same set of books that you want to look at. And Hobbs is about twenty minutes south of Lovington.

So there are a lot of options. We have spent the equivalent of about two weeks of going over the land books in Elliot & Waldron. And that's FOUR YEARS after we had two abstracts done. It's a long story, but we have made some pretty good progress in the past 12/24 months on first identifying and then clarifying ownership of several pieces of land that while the family no longer owns, it does own the MINERAL RIGHTS.

It can be a convoluted path to finding out what you own, but a landman will ONLY offer a lease to you for what he can prove to his boss that you own. Does that make sense?

That's why you will get a lease offer for a certain percentage of a given piece of land (1/32nd or 1/16th of a given parcel's mineral rights). It will say they have determined it is so many acres (NMA - net mineral acres) that they will pay you so much an acre BONUS money and then a certain percent for royalty rights. Bonus used to be from $250 - $1000 acres, but those numbers are about to go parabolic as the big boys move into the Permian Basin. You should also shoot for 25% ROYALTY payments. There are a lot of there things a good OGL attorney will help with.

It has been a long and interesting road, as we waded through the family history, who originally owned the land (Great Grandfather and two sons homesteaded parts of Lea County BEFORE it was Lea County) through the depression years, the war years and then the peace years. I was constantly asking myself, "what were they doing back in 1913 -1941" as they homesteaded several sections of land. Then seeing where and when they sold the land - ONLY SURFACE - which means beyond a shadow of a doubt we DO own the mineral rights.

Last step will be a quiet title suit that our OGL attorney will eventually file for us.

hope that helps

jim


#4

do you have an attorney you could recommend


#5

I am curious why you would need to file legal action after such a thorough job of documenting your ownership of the minerals. I am asking because I may have a similar situation of known ownership without acknowledgement by oil operators


#6

Because, by going in front of a Lea County Judge, and have our attorney give all the evidence of what we found and then ask the judge to agree with us LEGALLY giving his opinion that we do indeed own so many acres of mineral rights. Once our attorney gives the judge all our research with court certified documents, the judge will evaluate it all.

While that’s happening, we will have to file a notice in the Lovington Newspaper basically stating that if any one ELSE thinks they own mineral rights we are claiming as ours, they have 30 days to respond.

So, lets call it a month or so to get in line to see the judge. Then see the judge. Then post the notice in the local newspaper for 30 days.

That will mean about sixty days have elapsed since we started the process of going to court.

Hopefully, the judge agrees with our attorney that what we presented does give the proof he needs. He then issues a document that basically says ‘my family owns so many acres of mineral rights’ in a given section township and range.

Call it 90 -120 days from start to finish - at the outside. Less if there are NO other owners of the mineral rights you are claiming as yours. You want the judge to agree with you and put it in writing. Once he does that you take that ruling document to the court and file it.

THEN you have ‘updated/clarified’ ownership of so many acres of mineral rights.

That’s why you have to go to court. To clarify from that point forward that you own a certain set of mineral rights.

hope that is not too convoluted.

jrw


#7

Surfbluewaves,

Yes I do, drop me message and I’ll gladly give you name and number


#8

I have never seen a lease agreement for my antique wells? Is that problem?


#9

Well said. Thank you.