Hello
I received Lease Ratifications from Holland Services on behalf of Felix Energy, LLC to pool the above mentioned properties in Winkler County.. Has anyone heard anything about this? Or have any insight as to how I should go about determining whether or not I should sign?
I'm going to post this in the Winkler County group too...
Mathew
Mathew,
You mentioned "Lease Ratifications". Do you own the Executive Rights to the minerals? If you do not own the Executive right to lease a lease may have been negotiated on your behalf by the Executive Rights Owner.
Brent,
I do not own the Executive Rights to these properties. I am inclined to believe the lease have already been negotiated, and Felix Energy has been tasked with approaching all of the interest owners to get feedback on willingness to Pool the individual Leases. This is the area I have spent the least amount of time studying, so I was hoping someone else has been approached by the same company and could verify or deny my questions.
Hi, Mathew! Long Time.
Send me the legal description(s) and I will look the area up. If they have already drilled a well, you may be in for a wonderful surprise.
The party(ies) with the Executive Rights do not have the right to Pool Non-Participating Royalty Interests, therefore the companies have to obtain Ratifications or Pooling Agreements for any NPRIs.
I currently have three clients that were offered a total of about $6,400 for a 1/8th NPRI they didn't even know they owned. When they asked me whether I thought that was a fair amount, I suggested they let me take a look at the area before getting back to them. That while most Mineral and Royalty Buyers are legit people, some know something they don't and may be trying to buy their interests using their own money.
Sure enough, when I looked up the area, I found where the company had drilled two wells on the land back in 2012 and had never even contacted the NPRI Owners.
The Lease reserved a 1/4 royalty to the Mineral (Executive Rights) Owner, but because my clients never signed a Ratification, their 1/8th NPRI was not reduced to a 1/32nd (1/4th of 1/8th). They are due the full 1/8th (12.5%) of everything produced and sold from the Wells.
That's a difference between about $85K and about $340K that they are owed. An Attorney that I introduced them to is preparing to file suit against the company.
You should always consult an experienced Oil and Gas Attorney about these kinds of things and he or she may be able to more clearly explain these situations to you, but offhand I would suggest that if you ever sign anything, for it to be a Pooling Agreement, not a Ratification.
Hope this helps -
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
I've been out of commission due to an injury, but it's good to see you're still around Charles. I'll forward the legal descriptions via personal message in just a bit. Your help is always appreciated. You're the perfect person to ask another question I have, the post for which I was working on when I noticed you replied to this...
OK. Hope you are back swinging for the fences.