I just discovered that Mineral Rights in Dunn County North Dakota that I Inherited years ago has an active well on it since mid 2011. Sinclair Oil and Gas has the well. I was never contacted or offered a lease. I have papers proving that I own the mineral rights. How do I proceed with this? Do I need a Lawyer or Landman to help me with this? Am I entitled to past Royalty Payments? Do I need a lease from them? Should I contact Sinclair directly?
Thanks Bruce
Yes you are entitled to past royalty payments. If you are the owner according to county records, I would contact Sinclair. Depending on how productive the acres are, leasing may not be the best option. If your papers do not include a probate conducted in ND, you may have to perform a probate or quiet title action to receive royalty. It would help to know the legal description so I can look at the particulars of the well.
Sinclair may not even offer you a lease if the well is really poor but they would still owe you the average weighted royalty of what everyone else in the spacing received or 16% whichever Sinclair elects, usually the 16%.
The Legal description is: An Undivided 20/268.8ths Mineral Interest in all of Sec. 19, T146N, R97 West, Dunn County, North Dakota (20 acres)
Thanks
Bruce
r w kennedy said:
Yes you are entitled to past royalty payments. If you are the owner according to county records, I would contact Sinclair. Depending on how productive the acres are, leasing may not be the best option. If your papers do not include a probate conducted in ND, you may have to perform a probate or quiet title action to receive royalty. It would help to know the legal description so I can look at the particulars of the well.
Sinclair may not even offer you a lease if the well is really poor but they would still owe you the average weighted royalty of what everyone else in the spacing received or 16% whichever Sinclair elects, usually the 16%.
The Porcupine 1-19H is a 27 stage sand frack well that has produced 123,969 barrels oil as of march this year from an IP date of September 8 of 2011. I think the area is a little better deserving than a sand frack, but it's the operators choice and to me it looks like they went cheap reducing from 30 stages to 27 for a 10% savings in completion cost to boot. The well was still capable of producing 94.5 barrels a day as it did in March. I am fairly certain that Sinclair would want to lease you, In your place I would be just as happy if they didn't and I wound up with a working interest, providing you have more than a few acres. If you only have one net mineral acre, I would say to lease it for the most royalty and bonus you can get because with that little it's not worth learning the business. I hope you are a little better informed now.
You might also check with the Dunn county treasurer to see if someone set up an Unlocatable Mineral Owner Trust on your behalf and the trustee signed a poor lease "in your best interest".
I called the Dunn County Treasurer to see if someone setup an Unlocatable Mineral Owner Trust and they have no record of that. I have been in contact with Sinclair (sent them Probate and a copy of the Deed under the uncles name on record with Dunn County). Sinclair said they are checking it out and will get back to me. They know of the Deed with the Uncles name on it. Guess I will have to wait till I hear back from them.
The Dunn County ND Record of Deeds Department told me to get a lawyer in order to have the Deed put into my name. Can I do this without a Lawyer or can someone else handle this for me (Landman etc.)? BTW I only have a 25% interest in this. Do you think Sinclair will do the right thing for me?
Thanks Bruce
r w kennedy said:
The Porcupine 1-19H is a 27 stage sand frack well that has produced 123,969 barrels oil as of march this year from an IP date of September 8 of 2011. I think the area is a little better deserving than a sand frack, but it's the operators choice and to me it looks like they went cheap reducing from 30 stages to 27 for a 10% savings in completion cost to boot. The well was still capable of producing 94.5 barrels a day as it did in March. I am fairly certain that Sinclair would want to lease you, In your place I would be just as happy if they didn't and I wound up with a working interest, providing you have more than a few acres. If you only have one net mineral acre, I would say to lease it for the most royalty and bonus you can get because with that little it's not worth learning the business. I hope you are a little better informed now.
You might also check with the Dunn county treasurer to see if someone set up an Unlocatable Mineral Owner Trust on your behalf and the trustee signed a poor lease "in your best interest".
Was the probate conducted in ND and the final order recorded in the Dunn county Recorders office? If the estate had been probated, the result should have been a mineral deed of distribution. I don't know why probate lawyers stop at the one yard line. Deed or no deed, if the probate order is on file and says you own it, you own it. You could theoretically make your own deed on a paper towel, leaving 1-1/4 inches in the left margin for the recorders barcode and 3-1/2 inches for the recorders seal at the bottom, but I hope you get the legal description correct and correctly describe your property.
For the past couple of years, I have never expected an operator to do the right thing.
No the probate was done in Texas. Sent it to Sinclair. Do you think they will take care of it?
Bruce
Bruce, I really doubt it. You see, ND does not recognize out of state probates. The operator gets to keep and use your money interest free until you perform an ancillary probate in ND. I have heard of people with 1/10th of a net acre getting paid based on an affidavit of heirship but not if you have even a couple of net acres. It can't hurt to try though. I have heard of people with 1/10th of a net acre having to perform not one but 2 probates to be put into pay status and It will be many years if ever before they recoup that cost. Let us know how it works out.
I have a friend Wes Luke who has a well by Sinclair. Wes was leased and 1-1/2 years after first production, had not received a division order yet. I was looking over his spacings and found the well because Wes asked if anything was going on near him. Like I said, I never expect the operator to do the right thing.
Bruce Wernow said:
No the probate was done in Texas. Sent it to Sinclair. Do you think they will take care of it?
Bruce
OK! Sinclair said they are working on the Texas probate that I sent them. What is a reasonable amount of time to give them to get back to me? My guess is that I may still need an Ancillary Probate in ND. Does anyone know of a lawyer that can do this for me? How much should I pay a lawyer to have this done?
I have a copy of the Texas Probate and a Copy of the Mineral Rights Deed.
An Undivided 20/268.8ths Mineral Interest in all of Sec. 19, T146N, R97 West, Dunn County, North Dakota (20 net acres).
The Porcupine 1-19H is a 27 stage sand frack well that has produced 123,969 barrels oil as of march this year from an IP date of September 8 of 2011
Based on the above information is their a way to get a rough estimate on how much money would be owed me for Royalties?
Thanks Bruce