Help with Mineral Rights

My family inherited mineral rights from greatgrandfather , located in Dawson County, Montana. There was a 5 year "Paid-Up Oil and Gas Lease with Petro-Hunt which expired at the end of June,2013.

The surface owner of the property also owns adjoining property upon which there is a working oil well put in by Petro-Hunt.

What do we do next? Should we contact a Mineral Rights Manager , a Landman or an attorny?

I would appreciate any helpful information.

Francis:

What is the legal description of the mineral area....Township/Range/Section? If you are properly registered at the County Clerk office in Dawson County, most likely, someone will contact you if your area is targeted for development. By providing this property description, I will be able to give you an idea about what is in your immediate area.

There is no need to do anything unless it was great gramps who signed the 2008 lease. Was it?

It probably was not.

Everything is of public record. You need not take any action, including providing information on this site.

If someone is interested in leasing, they will contact you. If they are not, they won't.

Thank You for the reply.

Dave Quincy said:

There is no need to do anything unless it was great gramps who signed the 2008 lease. Was it?

It probably was not.

Everything is of public record. You need not take any action, including providing information on this site.

If someone is interested in leasing, they will contact you. If they are not, they won't.

Legal description is Township 19 North - Range 54 East, M.P.M. Section 2: Lots 3, 4, S/2NW/4

charles s mallory said:

Francis:

What is the legal description of the mineral area....Township/Range/Section? If you are properly registered at the County Clerk office in Dawson County, most likely, someone will contact you if your area is targeted for development. By providing this property description, I will be able to give you an idea about what is in your immediate area.

Yes, you definitely SHOULD take action. If the lease with Petro-Hunt was not extended past the initial five-year term, then you should contact Petro-Hunt as soon as possible to find out if they want to sign a new lease.

However, before doing so, you should collect more information proving exactly how the mineral rights went from your great-grandfather to your family. If it was through your great-grandfather's Will that was probated in Court, then obtain a certified copy of the Will from the Probate Court. If it was through the laws of descent and distribution (which apply when somebody passes away WITHOUT a Will), then create an Affidavit of Heirship for your great-grandfather, file that with the County Clerk in the County where the minerals are located, and obtain a Certified Copy of the Affidavit of Heirship. THEN you are ready to go to the Producer, "prove up" to them the connection between your great-grandfather and whoever rightfully owns the minerals right now (meaning show either the Certified Copy of Probate or the Certified Copy of Affidavit of Heirship), and request a reasonable offer to lease your minerals.

If the "working oil well" on the tract next to yours is producing nicely or starts doing so, then Petro-Hunt is likely going to want to talk to the current owners. In fact, they might have been wanting to talk to the current owners for quite some time but not been able to do so because everything was NOT of record, namely WHO the current owners are in the present time (this is especially possible in the case of intestacy), or what they needed WAS of record but not easy to find (such as somebody who owns minerals in one county but whose Will is probated in another County or another State).

It is possible that if you do nothing then eventually the Producer will figure out who the rightful owners are, approach you, and make an offer. But the goal is to get a good lease signed quickly. So why not make it as easy as possible for the Producer to give you your money? Do the research and legwork, go to them, and see what happens. I cannot tell you how many times we landmen would get to a dead end on figuring out an heirship, put leasing of the tract on hold indefinitely, and then in the interim receive disappointing news from well logs pertaining to a well on a tract adjacent to or close by to the tract that we had been wanting to lease. Guess what that means? Those heirs who we had been wanting to lease get NOTHING because we couldn't figure out who they were before the bad production reports came in. If we had known who those heirs were more quickly, at least they would have gotten a bonus check before the bad production reports came in, if not a royalty check. So if you follow the advice somebody else gave you here and do NOTHING, depending upon the circumstances, you might be costing yourself ALOT of money!

In another situation, I offered a lady $100,000 to lease her minerals, she agreed to sign the Lease, but literally as she was about to put pen to paper she said, "I think I better have an attorney look at this," and by the time the attorney had reviewed it three months later we had gotten well logs for a nearby well showing very poor production, and drilled a dry hole nearby as well, so we withdrew from that specific area altogether. And the mineral owner, who had wanted that money to build herself a new house to retire in with her husband, got NOTHING. So time IS of the essence!

Thank you very much for this information; however, I believe all the work has been done to show me as the owner of the mineral rights. The 5 year lease that we had with Petro-Hunt was in mine and my wife's name and all my siblings also received a lease.

I did contact Petro-Hunt when the lease expired and they said they were not going to renew again.

I was in the Glendive area and visited the property in September, 2012, which was the time Petro-Hunt was erecting the working well which is 400 yards from the property that we have the mineral rights on. I talked to the surface owner and he assured me that the well was a good producing well.

As I explained before, these mineral rights come down the generations from my Great Grandfather so there are numerous heirs involved in this. Is there some way to get information showing the names of these heirs?

I really appreciate your input and look forward to more information if you have it. THANKS AGAIN.

Pete Wrench said:

Yes, you definitely SHOULD take action. If the lease with Petro-Hunt was not extended past the initial five-year term, then you should contact Petro-Hunt as soon as possible to find out if they want to sign a new lease.

However, before doing so, you should collect more information proving exactly how the mineral rights went from your great-grandfather to your family. If it was through your great-grandfather's Will that was probated in Court, then obtain a certified copy of the Will from the Probate Court. If it was through the laws of descent and distribution (which apply when somebody passes away WITHOUT a Will), then create an Affidavit of Heirship for your great-grandfather, file that with the County Clerk in the County where the minerals are located, and obtain a Certified Copy of the Affidavit of Heirship. THEN you are ready to go to the Producer, "prove up" to them the connection between your great-grandfather and whoever rightfully owns the minerals right now (meaning show either the Certified Copy of Probate or the Certified Copy of Affidavit of Heirship), and request a reasonable offer to lease your minerals.

If the "working oil well" on the tract next to yours is producing nicely or starts doing so, then Petro-Hunt is likely going to want to talk to the current owners. In fact, they might have been wanting to talk to the current owners for quite some time but not been able to do so because everything was NOT of record, namely WHO the current owners are in the present time (this is especially possible in the case of intestacy), or what they needed WAS of record but not easy to find (such as somebody who owns minerals in one county but whose Will is probated in another County or another State).

It is possible that if you do nothing then eventually the Producer will figure out who the rightful owners are, approach you, and make an offer. But the goal is to get a good lease signed quickly. So why not make it as easy as possible for the Producer to give you your money? Do the research and legwork, go to them, and see what happens. I cannot tell you how many times we landmen would get to a dead end on figuring out an heirship, put leasing of the tract on hold indefinitely, and then in the interim receive disappointing news from well logs pertaining to a well on a tract adjacent to or close by to the tract that we had been wanting to lease. Guess what that means? Those heirs who we had been wanting to lease get NOTHING because we couldn't figure out who they were before the bad production reports came in. If we had known who those heirs were more quickly, at least they would have gotten a bonus check before the bad production reports came in, if not a royalty check. So if you follow the advice somebody else gave you here and do NOTHING, depending upon the circumstances, you might be costing yourself ALOT of money!

In another situation, I offered a lady $100,000 to lease her minerals, she agreed to sign the Lease, but literally as she was about to put pen to paper she said, "I think I better have an attorney look at this," and by the time the attorney had reviewed it three months later we had gotten well logs for a nearby well showing very poor production, and drilled a dry hole nearby as well, so we withdrew from that specific area altogether. And the mineral owner, who had wanted that money to build herself a new house to retire in with her husband, got NOTHING. So time IS of the essence!

You said that "all the work has been done to show me as the owner of the mineral rights," but then you say "there are numerous heirs involved in this" and ask if there is "some way to get information showing the names of these heirs." Even if Petro-Hunt is not interested right now, they or another producer might be in the future, and since the neighboring well is producing nicely some producer probably will make the investment in that area to develop that tract.

WHOEVER eventually shows interest, they have to know who the current owners are in order to lease them. If the current owners are not shown of record either in the Deed Records, Court filings, or a combination thereof, then a producer most likely will move on to another tract where the current owners are more easily discernible. A tract one of my clients wanted to lease was put on the back burner because there was a complicated heirship involved and they did not want to pay a genealogist or title abstractor thousands and thousands of dollars to figure it out.

Two years later, that tract was still not leased. So it behooves the mineral owner to make it as EASY as possible for the producer to say, "Oh, I see, these guys are the current owners, I'll go give THEM some money." The best way to do that is to have all the current owners' names and contact information filed in the public record somewhere. So as I stated before, if your great-grandfather had a Will that was filed in Probate Court, that should suffice to put the oil-and-gas company on notice who the heirs are. If your great-grandfather did not have a Will or did have one but it was not filed in Probate Court, then I suggest you pay an attorney to draft an Affidavit of Heirship showing exactly who all of your great-grandfather's heirs are and file that in the Deed Records.