Interesting Situation - lapsed lease with ongoing production in a pooled field

Recently our checks stopped arriving from the producer for some of our mineral interests in the Wilmington Field. We were informed that there was an ownership question and they were investigating and because it was pooled they could not "separate out" this particular holding. Well, that investigation is still ongoing but we now have the following facts:

1) In 1967 a lease was executed between an oil producer and a railroad where my family was awarded 50% of the royalties from the parcel in question.

2) While my family held 100% of the mineral rights they agreed (best guess it was considered "free Money") to accept 50% of the royalties and the railroad received 50% and negotiated and signed the lease.

3) Now, 50 years later, the lease has expired and the agreements have been found by the current producer who agrees that the railroad no longer has an interest based on the expiration of the lease and the title documentation uncovered by their Landman.

While we have negotiated new leases with producers, which are speculative in nature from the producer's perspective, we have never negotiated a lease where there is ongoing production and the producer has equipment on site.

Not sure how to handle this from the royalty perspective. It is currently unclear but appears we also hold surface rights based on the existing filed title. The railroad had also negotiated a net lease with 50% of the net production profit going to them. I feel that we are in the stronger negotiating position here.

Thoughts anyone?

Is there a warranty deed (ie., the controlling document filed of record in the county clerk's office concerning your family's land) that mentions any language with the terms "executive rights"? That is critical to know...

Thanks for the reply. The situation has changed in the intervening time and gotten more interesting from a land perspective and in essence solved itself from a royalty perspective. Further review by the producer has discovered that the lease actually was superseded by the pooling agreement and while the lease terminated the pooling agreement remains in place. Royalty checks have begun to flow again. From the land perspective their are other developments that may or may not have any meaning due to the passage of time and the California version of the Marketable Title Act. We are at least back to where we were so I can not complain. Oh, and the railroad did/does hold "executive rights" though they have since sold off the property.