My situation in Fisher and Scurry counties is much like Mr. Bradford's, and I am equally unsure about my rights. (I'm a newbie and apologize for any breach of Forum procedures by jumping into the discussion, which is much appreciated. I'm amazed at the amount that I have learned from the folks who have already contributed. )
My story in Fisher county is this: I have just learned that I do not own the executive rights in the "bundle of sticks" for my properties, which includes both producing and non-producing interests in several parcels
I've been told that the executive rights for 66 acres have been bought and that I am now due payments based on a lease that apparently been made without my participation. Basically, I know nothing beyond the fact that the lease is now apparently with Kirkpatrick. However, I know nothing of the lease provisions or terms. I have not signed any documents, nor have I received any to sign.
All of my original documents dating from 1930 confirm that the executive rights were severed then, and that I own only the four remaining rights. My original 1930 documents confirm that the executive rights were retained by the original owner of the mineral interests,which total several hundred adjacent acres in Fisher and Scurry counties, some of which have been producing for 20 or more years. I own only a small interest in the total acreage.
This is a whole new leasing experience for me, and my understanding is that my only recourse is to await receipt of the monies due to me as a royalty interest-only owner. I'm equally unsure of whether I will receive any portion of the bonus money, although that is mentioned in the summary below which indicates that I am a "mineral owner".
Here's what I've been told by the landman, which may be useful to Mr. Bradford.
To summarize the nature of my inquiry with you; we have recently leased the parties that have executive rights on this section and I am contacting mineral owners without executive rights, such as yourself, in order to obtain current contact information so that we may send a check for their portion of the bonus consideration due.
1) Background Information To assist you in understanding your ownership in this section, I have put together some information from online resources to help explain the terms we talked about. I encourage you to research them if you have time so that you can fully understand your ownership in this section.
In Texas, a fee simple absolute ownership of the entirety of a parcel of land includes both a surface and mineral estate.
1 These two estates can be separated, as the Texas Supreme Court noted in Acker v. Guinn explaining that “[a] grant or reservation of minerals by the fee owner effects a horizontal severance and the creation of two separate and distinct estates: an estate in the surface and an estate in the minerals.”
2 The mineral estate consists of five interests: “(1) the right to develop (the right of ingress and egress), (2) the right to lease (the executive right), (3) the right to receive bonus payments, (4) the right to receive delay rentals, (5) the right to receive royalty payments.”
3 These attributes, when taken together, are often referred to as a “bundle of sticks,” and it has been recognized that individual “sticks” can be sold while others are retained.
4 In addition to being defined as one of the five rights of a mineral owner, the executive rights to lease have been defined by courts and treatises as the exclusive right to execute oil and gas leases.5 Reprinted by permission, Texas Tech Law Review, V. 42, No. 1, 2009. (http://www.haynesboone.com/executive_right_to_lease/)
Mineral Ownership: An interest in minerals in land, with or without ownership of the surface of the land. A right to take minerals or a right to receive a royalty.Mineral right is a term encompassing all the ways a person can have a possessory interest in minerals in the ground. It includes the right to enter the land and occupy it in order to remove the minerals.
Mineral rights can be retained when land is sold or conveyed, thus making it possible for someone to own the right to mine the minerals without owning the land. A right of entry onto the land can be held by the grantor who retains the mineral rights, or other arrangements can be made to gain access to the minerals.
Mineral rights can be leased or sold. A landowner who leases mineral rights often receives a royalty, or a percentage of the value of the minerals which are mined by the leaseholder. (http://legal-dictionary.thefreedictionary.com)Royalty Interest: The proportional ownership interest by the owner of oil and gas rights in income produced by the asset. (http://legal-dictionary.thefreedictionary.com)
Non-Participating Royalty Interest: Non-participating royalty has a well-understood meaning in the oil industry. It may be defined as an interest in the gross production of oil, gas and other minerals carved out of the mineral fee estate as a free royalty, which does not carry with it the right to participate in the execution of, the bonus payable for, or the delay rentals to accrue under oil, gas and mineral leases executed by the owner of the mineral fee estate. The exclusive-leasing privilege remaining in the mineral fee owner is commonly referred to and known as the 'executive right'.[Superior Oil Co. v. Vanderhoof, 307 F. Supp. 84, 89 (D. Mont. 1969)](http://definitions.uslegal.com/n/non-participating-royalty/)
Gary L. Hutchinson said:
I like what Mr. Tooke and Mr. Cotton suggest. Don't sign a ratification now and wait for the Division Order Title Opinion Lawyer to find you. By that time you should have your own chain of title documents and can approve the Division Order for a definitive geologic zone. If you ratify a lease now the lessee gets all you have got for as long as they want to keep it and there is nothing left to doubt including your true rights.
With Horizontal wells, the surface location is meaningless. The point at which the well bore penetrates the producing zone, the track in the producing zone, and the bottom hole location are what define the ultimate unit that you want your minerals in to be paid.
Gary L Hutchinson