Help with NPRI

A while back I discovered that I am a heir of non participating mineral rights in Section (18), Block (34) T1 S, T & P Ry Co survey. Exact wording on deed is:

The North Half (N/2) of the Northwest Quarter (NW/4) of section 18 containing 60 acres, and the South Half (S/2) of the Southwest Quarter (SW/4) of said section containing 77 acres and the following numbered lots 304,503,601,602,603,604,701,702,703,704,801,802,803 and 804 containing 140 acres. Total acres 297.

There is reserved to the grantors, heirs and assigns an undivided one forth (1/4) royalty on oil, gas and other minerals in and under said land.

Currently there is a lease recorded in Howard County but I have not been contacted. Now I have discovered on RRC website that there are 3 permitted locations to drill in section 18. How can I tell if my acres are included to any of those permits? Would appreciate any assistance.

Thanks Theresa

As the owner of a non-participating mineral interest (or probably a non-participating royalty interest), the lessee is not obligated to advise you of any intent to drill unless they plan to create a pooled unit with other lands. Without reading the deed or conveyance giving you the non-participating interest, I suspect you will be entitled to 1/4 of the royalty that is in the lease but that is only a guess. The only time you will likely hear from the lessee is if it intends to pool as previously mentioned or when you receive a division order if production is obtained. You should make sure your current address is in the records.

Theresa,

It appears that one of the permits is in the NW1/2 off the NW1/4 of section 18(22739071), also their is a plugged well in lot 702. You can see this map info from the W-1 page for the well by clicking on "Links" then select GIS viewer.

Dave's last sentence is critical, if you only recently discovered this royalty info how can you expect a producer to locate you. This is best accomplished by filing an "affidavit of Information" with your contact information and the property description with the Howard County Clerks Office.

I would also contact the operator to be sure they have up to date info.

Joe H. Smith

Thank you so much for the info. I was aware of the plugged well. Can you tell me what the process is if production occurs? How do I protect my interest? Had interest on another section (80 acres) which I did have executive rights on 40 acres, signed a lease without really understanding the process. It was pooled into 480 acres. It is producing but the Operator says my interest are to minimal and I never recieved a production order. I just don't want to get burned agian. Thanks

Thanks for the info!

"signed a lease without really understanding the process". That about sums it up. You should have consulted with an attorney if you did not understand. Otherwise you are just hoping the lessee will take care of you. This almost never happens. I do not understand the lessee saying your production is too minimal for a production (division?) order. Lessees will suspend payments until they reach $25-50$ to save administrative costs. However it is almost unheard of for a lessee to just ignore a party entitled to a royalty interest, however small. Sound like you first need to determine your exact interest in the unit and if there are any title issues preventing payment. You will then need an attorney, which will now be more expensive than at first, to get any royalties that may be due.

I was stupid. Believed in what the landman was telling me. I have contacted an attorney but it seems that is going nowhere as well. I just don't want to make the same mistake again with this acrerage. Thanks for your feedback.

I am not trying to beat you up but the landman works for the lessee unless you hired an independent landman yourself. They only say what the lessee wants them to say and generally have no authority to do anything not already approved by the lessee/oil company.

Theresa,

That is a large NPRI. You didn’t quote the rest of the deed, but a true NPRI does not give you the right to sign leases or a share of the bonus.

The deed has to be looked at carefully. The main issue with an NPRI interest is whether they are x% of the gross production or x% of the royalty stream. If yours is 1/4th of the gross, that men’s there really is not any royalty left, assuming a 25% lease.

If you have an NPRI, usually you get contacted the earlier of when they want to pool your interest with another tract, or when they are ready to start paying on the well.

Correct, the Deed does specify we cannot sign a lease or collect any Bonus. I believe the interest is the royalty stream. I do not have a copy of the original deed from 1949. I have viewed it in the county records but the image is distorted and I cannot read the exact verbage. A landman with Double Eagle contacted me in May and I provided heirship affidavits for title chain.

If the 1949 deed is on the county records on line, then you can purchase a copy for $1 per page and the pdf will be legible. Or call the county and ask for price and send letter with check to purchase. This is an important document in your chain of title as the exact wording affects your rights. You should get all the deeds in your chain of title to see whether there are other reservations and how many times the NPRI has been divided. With regard to the producing well, do you know your net acres in the unit so you can calculate your royalty decimal? Did you send a demand letter by certified mail regarding your unpaid royalties and the failure of the operator to send a division order? Ask for a copy of the title opinion which sets out your interest. Do not just accept a verbal statement that your DOI is too small. If possible, include the date (s) you called and the name of the person you spoke with. Always record this information in your lease or well file.

Thanks for the information. I will obtain a copy. The 1949 deed grantors were 3 siblings, one being my Great Grandmother. It was the same grantors on the deed for the smaller acerage. My Grandmother and father were unaware of this interest. I think most family was unaware until 2012 when we were notified by the landman. I know there are about 40 heirs. The only family that I am in contact with are my 2 sisters. I have not located any documents where the NPRI has been divided. I did contact a lawyer last year and he did send a demand letter. The landman informed him that they were still trying to cure title ( the company failed to file the affidavits I provided to them). Double Eagle has now filed these affidavits for me. The lease on the smaller acerage was with Grella. It has been assigned 3 times since then. Do all documents get passed from one company to the next? Again, thanks so much for the responses.

They assign for different reasons but normally some company is assigning the interest to the others because they are being paid and eventually the operator must be assigned the oil and gas leases.

NPRIs can be very tricky! Be very careful on what the landman is trying to get you to sign. Why is this landman filing affidavits on your behalf? That’s seems kind of strange. Nice perhaps but… I also owned a NPRI that I was not aware that a well had been drilled on the tract we owned under. It was producing when I discovered it. I believe it was Grella but I’d have to look st my records. The new operator tried to get us to sign a ratification! After we discovered they were taking our oil for years! It’s a long story but my point is be very careful and if in doubt consult an oil and gas lawyer or advice from a disinterested party with knowledge.