Me and my siblings just inherited mineral and surface rights from our mother. We have not had the time to dig into all of this, but we are now receiving leases. We just received a Brine Lease located at TOWNSHIP 14 NORTH, RANGE 11 WEST, Indian Meridian Section 03: W/2 SE/4 The lease states that the land estimate is 80 acres, and they want to lease for 3 years with royalty payments of 3% for surface and 3% for mineral. We only inherited mineral rights in Blain County. Does this seem like a fair lease? Do you negotiate leases, and should we negotiate with this particular lease? FYI, we have started the process of notifying the counties of ownership change. What is the best way to get to the check writers to notify them of the change of ownership to get the checks out of my mom’s name and into mine and my siblings? Thank you for the help.
Pause on the brine lease. Those lease royalties sound too low without further investigation. I just received an inquiry about an iodine from brine lease in Blaine. Doing more research. If they are extracting brine out of an oil and gas stream, then the minimum lease amount would be 12.5% if not more.
You need to contact each of the operators with current production and notify them of the change in heirship and ask what they need to get you into pay. Usually, they may ask for a copy of the death certificate and probate documents, but companies may vary in requirements.
A copy of the probate should also be filed in every county in the courthouse with the recorder of deeds along with descriptions of the minerals for that county. Contact the recorder and see what format they need. Some are quite particular about paper size, margins and place for filing stamps. There is a small fee.
You have about five horizontal wells with royalties that you need to get transferred to yourself first. Do you have royalty statements for your mother from Devon? Have you contacted them yet to get into pay status for 3-14N-11W? You will need her owner number which is on the check stub. You need to talk to the royalty owner department or the Division Order department. Ask them what they require to get into pay status.
Thank you for all the advice here. My mom did an excellent job of keeping records, so much so it is a little overwhelming. We will wait on the Brine/Iodine lease and look for 12.5% or more. Each of my siblings has set up our own trusts to transfer the deeds to, except for one sibling which should be completed soon. Once we have everything completed, we will get with each county and then begin notifying each operator for each well site. I was able to look back 18 months and see each check my mom deposited online from each operator, and I have a spreadsheet with all that information to help us when we must contact each operator. My mom also has an Energylink account where we can see information from several operators, one of which is Devon. We will start to reach out to the operators soon to find out what they need to change the pay status. Thank you, again.
Trying to get more info on the iodine issue. Not sure what the going rate is. Stay tuned. Yeah for Mom being so organized!
M_Barnes I was following up to see if you were able to get any more information for the Iodine leasing in Blaine County? I have been following another discussion with the same Iodine leasing in Blaine County as us with the same documentation and sample lease that was uploaded a few days back. Thanks!
Hi Sarah. I grew up in Blaine County. Graduated Watonga HS & own minerals in lots of places in Blaine Co. Although I haven’t been contacted about brine/iodine, it is in its infancy so personally I would wait until it gets developed, if ever. The bonus, to me, is immaterial to what it may be worth. Your situation may be different.
I attended an AAPG webinar on iodine by the company that is sending out the recent leases. My impression was that I was interested in the concept but didn’t think I could do a brine lease since my wells in the Blaine sections they were interested in were already in production. I have no surface interest.
And as a mineral owner, I have the understanding that the subterranean water is the property of the owner of the surface estate before drilling. If the water is part of fluids that would come up due oil and gas operations, then the contract for any brine processing by the surface owner would have to be done BEFORE the filing of the permit for an oil and gas permit. My wells are already drilled and I have no surface, so would not apply to me.
After the drilling has commenced and without a surface agreement to the water, I understand that the operator (not the mineral owner) owns the water that is produced.
I was relying on this geologist’s read of the 2022 OK statues Title 52,-86.6, 7, 8 and the OK Brine Development Act. OK Stat tit. 17 sec 504. I have attached portions of the relevant parts.
My comments on some of the lease drafts that I have seen are: -I would never lease multiple sections on the same lease and tie them all together, Oil and gas or brine leases. Never, never…
-I would never lease surface rights and mineral rights on the same lease and I would not warrant title. Each of those estates have different rights, so I would not combine on the same lease.
-I saw no shut in clauses or time frames, so I would not want a conflict with my oil and gas lease (if it applied). The Cessation of Operations was not a good clause as I read it because it could conflict with the oil and gas lease in time frames.
-I saw so many other red flags, that there is no way I would sign that draft without an attorney taking a hard look at it. I saw the draft lease as too early in the financial brine extraction experimental cycle to conform to any OCC rulings, so won’t touch with a 10-foot pole for me.
2022 Oklahoma Stat 52 86.7.docx (20.3 KB)
Legal folks, feel free to comment…
Great job! I nominate your as best new mineral owner of the year! I wish more people were as diligent about the stewardship of their inheritances.
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Thank you so much for your help in understanding this situation! You are a great asset to this online mineral community!