Hello All,
First time poster, really novice in all this and was pointed here to get my feet wet. Basically, I’m in the process of inheriting some mineral rights. Long story short, a grandfather I never knew I had died with them in his name at a youngish age, being survived by my mom who also died at a youngish age, and never got them in her name, not sure she knew about them (her dad and mom split and her mom was holding a grudge). Anyways, I’m trying to understand more of what I actually have and what I’ve jumped in to. I’ve read a decent amount of what’s online but can’t say I totally understand what the future holds.
Basically,
How do I figure out if my mineral rights are worth anything?
How can I tell if they have been drilled and by whom?
Letters come asking to buy or lease, how do I known it’s a good deal and in general, is selling or leasing an actual good option?
What power do I really have over the minerals outside of signing the forms that come in?
Anything else I should know or resources greatly appreciated.
Welcome to the oil patch! This is a great place to get your feet wet.
Let’s start a bit ahead of your questions. First of all, you need to get the wills probated. If there were no wills, then you need to go through the court in Grady (or the county where your relatives lived) and file the intestate forms and affidavit of heirship forms. OK has rules about who can inherit and in what percent if there are no wills.
How do I figure out if my mineral rights are worth anything? Come back here and ask by section, township and range what activity is going on. The value actually hinges on #2. Was it drilled, are royalties being held by the company or the state for your relatives and now you? Is future drilling pending or likely?
How can I tell if they have been drilled and by whom? Come back here and ask and we can help.
3. Letters come asking to buy or lease, how do I known it’s a good deal and in general, is selling or leasing an actual good option? Post a question, again using section, township and range in the County that you have minerals. Folks here will give you feedback. You can use the search icon (magnifying glass in the upper right corner) to look for your section, township and range and see if someone else already posted. Usual form is 10-6N-6W for example.
4. What power do I really have over the minerals outside of signing the forms that come in? Depending upon what power your grandfather had, you will probably inherit that power. There are several layers. You can have royalty ownership only-that means revenue, but not decision making executive powers; you might only own in a wellbore and not own mineral rights; you might have all executive (decision-making) rights and royalty rights, etc.
Anything else I should know or resources greatly appreciated. Hang in there. You have a lot to learn. The lease a company first presents to you in most likely not in your favor. Most of it is open to negotiation.
I would suggest that you read over the General Discussion archives and current topics in Grady for about the last year or so to catch up on what is going on. Then go the investor presentations for the big companies that are active like Continental Resources, Newfield, Marathon, etc. to see what they are saying.
Ask tons of questions! Do not sign anything unless you understand what it says and understand the consequences of it. Learn about the Oklahoma Corporation Commission and what free data exists there.
Overwhelmed now? We all were. Just be patient with yourself and give yourself time to learn. Don’t let anyone rush you into signing something.
I am a Landman who lives in Grady County, If you need help feel free to contact me. Eppllc2012@gmail.com. I would be happy to help answer any questions you have.
How would one inquire about original Deed? Someone wants to purchase Mineral Rights past and future knowing that ive inheriited these sections .there are appr. 12 sections left to me and my siblings i need help
If you have just inherited, then slow down and learn about what you have and what it might be worth. Do not get rushed into anything. If the probate has just been done, then ask the executor to give a list of the mineral rights and copies of all files that pertain to them. You should also ask for a valuation of the mineral rights as part of the estate closeout. You need the value of the rights as of the date of death or six months after, whichever is lowest. This can impact any capital gains on a sale. Those 12 sections could be highly valuable or not. You need to know what they are worth before you consider any sale. Also, if you siblings stick together, you may be able to make more money by leasing. You need to know if you have productive wells that you should be getting royalties on, whether or not new wells are planned, etc. There are some legitimate folks out there making good offers and there are some scam offers out there trying to take advantage of people when they are just learning about the business.
Read over the Grady posts for the last few months and get a feel for what is going on. There are several Topics on the forum about selling minerals-pros and cons, what to watch out for etc. First offers are usually quite low to final offers, so get informed first. If you need to sell, then get several offers, not just the first one that pops up. You do not have to sell everything, can keep part, sell part, sell nothing.
If you have minerals in more than one county, read those counties. Deeds can be found in the county courthouse of each county. Many have been digitized back to the early 90’s and can be found on: www.okcountyrecords.com.
Grady has its own site: idocmarket.com
You say you have just inherited. Find out if your attorney is qualified to advise you on the moneral rights. My attorney has made me a good living from the mineral rights I inherited from land in the family the last 55 years. I was at an energy rights seminar for engineers and met a gentleman by the name of Ralph Salusti (sp) he has been in the oil & gas legal business forever. He helped me a lot on top leasing a property that was being held by a stripper well. I don’t know if we can recommend attorneys on this site, but I have used and continue to use Brenda (Wendy) Huff for my estate and oil propeties. Ed Simmons, her partner is also a great resource. When I get an offer for sale or lease, I tell them to call her. I have negotiated the leases myself but left the legal stuff to her. There are plenty of opportunists out there in the oil patch. I have had offers to buy that were less than 1/2 of the lease bonus I had signed with. At my age with no heirs, I figure that with 3 yr term leases I have 7 to 9 lease terms left. So, if they want to pay 5 or more times the lease bonus per acre, then I will consider the offer to sell. My last Grady county lease was for $4500 and 20%… If you can get the lessor to split the payments into each year, then you can save a lot of taxes. My Dad said back in 1963 when he leased the Grady County mineals for $20/acre, he did not care if they ever drilled, he just wanted to keep leasing. That farm was bought for $85 per acre!! 55 years later, my philosophy is the same as his… Sorry for such a long post. My recommendation is to keep the largest block of minerals you can, and lease. The larger the acreage the more bargaining power you have. Good Luck and God Bless.
Lots of great questions. It definitely can feel overwhelming and be like the proverbial drinking from a fire hose. As Martha stated, don’t rush into anything, take a moment and gather up the details on what you have.
First step would be to confirm where the minerals are located and how many acres did you inherit. If you own your executive rights, then you have the power to steer the boat and negotiate lease terms for yourself. If someone else has the executive rights, then you have less control over the lease side of the equation. Either way you control the decision related to holding, selling all or selling a portion of your minerals.
Next step would be to figure out whether they are they leased.
Whether there are any existing wells on the acreage (or whether your acreage was included in the units for existing wells). If so, who received the checks. Once the probate is done, you will need to notify the operator and have the ownership transferred over to you so you can receive the royalties.
As far as value, it all depends. Location will be a top driver - some areas are simply worth more than others. If leased, the terms of the lease will impact the current value, and the prospective value of future cash flows.
This is a complex question as you probably have seen in the various discussions through the site. If you provide an indication of where the acreage is located, I would imagine there will be lots of opinions offered as to the potential value you are inheriting.