Lately I've been getting a lot of interest in one tract in particular. It's a 50 acre mineral rights tract in the Ten Mile District of Harrison County, West Virginia. The thing with this parcel is, I was told by the people earlier in my chain of title that I own a full 100% interest. But, 5 years ago I signed a lease w/ Chesapeake & their landman said I owned only 50%. Now that their lease is due to expire in a week I have offers well beyond what 25 net acres should fetch, its now up to $2,500.00 per acre w/ 17% royalty. Is there any way I might own more than the 50% I was told? And, is there also a chance my acreage is more than the 50 acres? What if I sign a new lease which says I only have 1/2 of 50 acres and when they get title certified it turns out my interest &/or acreage is greater?
Mr. Skelton,
I might be confused about what you are asking.
When leasing, most companies do not pay more per acre for bigger tracts. For example if ABC oil company was leasing in your area and paying $1000 per acre they would pay $1000 per acre whether it was 1 acre or 1000.
It is possible that you own 100% of the 50 acres if Chesapeake made a mistake somewhere, but it is highly unlikely that the actualy tract is more than 50 acres.
Hope that answers some of your questions.
What does the assessor's office say about your ownership? 1/2 or full OGM? They don't always have the correct information but that is a place to start.
Did you have a title search when you acquired the tract?
About the acreage: sometimes a recent survey shows a different acreage than the original survey which might have been in the 1800s.
Make sure that you have an attorney familiar with oil and gas leases look over your lease before you sign to help with the wording on what you are saying you own about this tract. You could ask the landman or landmen who are giving you these current offers to share what they have about your title.
I AM NOT an attorney! but a layman who has searched my own title in another county and know that sometimes it is many decades ago that a partial mineral reservation was done and subsequent leases don't mention it.
This particular 50 acre tract was listed with the assessor and on my deed as being 100% of 50 acres when I originally purchased it in 2008. When I was approached by the Chesapeake landman, Andy Poling, he told me I only had a 1/2 interest, and that's when I changed it to 1/2 int. w/ the assessor and signed his lease. He wouldn't give me any title info though. I didn't get a title search when I acquired the property. I was new at mineral rights and didn't know. I'm starting to think this is a full interest now. I'll ask the landman offering $2500 per acre for his title work and I'll ask Chesapeake for what they might have. If they don't have anything, Andy was full of it. Thanks for your responses.
Nancy Mosley said:
What does the assessor's office say about your ownership? 1/2 or full OGM? They don't always have the correct information but that is a place to start.
Did you have a title search when you acquired the tract?
About the acreage: sometimes a recent survey shows a different acreage than the original survey which might have been in the 1800s.
Make sure that you have an attorney familiar with oil and gas leases look over your lease before you sign to help with the wording on what you are saying you own about this tract. You could ask the landman or landmen who are giving you these current offers to share what they have about your title.
I AM NOT an attorney! but a layman who has searched my own title in another county and know that sometimes it is many decades ago that a partial mineral reservation was done and subsequent leases don't mention it.
Steve, if you get it cleared just how much you own, the assessor's office probably can have the company show them the title opinion to get things recorded correctly if Assessor's office says it needs some documentation, especially if you already changed it once. Good luck with this.
If you live near the courthouse you can go do some of the searching yourself, looking at your deed where you bought it and seeing if it says where the grantor (to you) bought it (or acquired it maybe by inheritance).
That sounds like a good idea. I may end up doing that with this property & another. I also came up with another idea & I requested for the landman to insert the following two articles into the contract about an hour ago. What do you think about this:
1. Upon certification of title, Lessee is to deliver unto Lessor a copy of the certified title abstract.
2. Upon certification of title, if it is discovered that Lessor owns an interest greater than 50% of 50 acres, whether in interest, in acreage or in both, Lessee will within 90 days pay unto Lessor the unpaid signing bonus amount based on this contract's agreed upon Leasing Fee of $2,500.00 per net acre.
He said he'll forward it to the company & see what they say.
Looks great to me!
I like No.1. The problem is they rarely do it because the information is work product that they spent alot of money on.
No. 2, is no encouragement to get it right, if they get a good well, they would jump for joy to secure good title for every acre at the lease bonus price. If they don't drill or the well is a dud, they will be happy that they skated on part of the lease bonus. If you really want to get their attention and assure that any acreage and interest is accounted for with lease bonus paid, say that all unleased acres/ interest is automatically working interest.
Steve Skelton said:
That sounds like a good idea. I may end up doing that with this property & another. I also came up with another idea & I requested for the landman to insert the following two articles into the contract about an hour ago. What do you think about this:
1. Upon certification of title, Lessee is to deliver unto Lessor a copy of the certified title abstract.
2. Upon certification of title, if it is discovered that Lessor owns an interest greater than 50% of 50 acres, whether in interest, in acreage or in both, Lessee will within 90 days pay unto Lessor the unpaid signing bonus amount based on this contract's agreed upon Leasing Fee of $2,500.00 per net acre.He said he'll forward it to the company & see what they say.