If more than one person has mineral rights on a property when a "landman" comes out to lease the land does every one who has a share get a letter or phone call. An example original land is sold and person get 1/2 share, Next owner has his/her 1/2 share. Land is sold new owner has no share of minerals just surface rights. Is the orginal owner contacted, Middle owner, new owner ? If a phone call is made but there has been no follow-up. Is there a way to find out if someone else might be interested.
Surface interest ownership is handled differently than no-surface mineral interest owning only parties.
1. Mineral interest leasing does not have to involve 'surface owner only' up front. The lease company can be anyone in that bid'ness and they will negotiate with each mineral interest owner separately. A 1/2 (50%) mineral owner will cut their deal, a 3/16th mineral owner, a 1/64th mineral owner will each cut their own deals separately. The smaller mineral interest owner may be offered a larger future royalty percentage and a larger bonus than the 1/2 mineral interest owner. Getting 100% mineral interest leasing is the land man's objective. If a small mineral interest owner doesn't like the offer(s) or just won't deal, then the State of Texas has provisions in the Texas OG&M laws that would allow the exploration/drilling to start without 100% of the mineral interest being leased. Each mineral interest owner therefore cuts their own deal.
2. CAUTION for Non-participating mineral rights owners, you have no say-so in the negotiations. You will get what the other participating mineral rights owners work out with the leasing company. Non-participating mineral rights owners are dependent 100% on the participating owners lease negotiating skill and success, bonus $$ and royal payment percentage will closely mirror the participating mineral rights owners. The non-participating owner may not have to even sign the lease - it already taken care of in the Texas OM&G law.
3. The surface-rights only owner remains out of the picture until exploration, drill site selection, roads, fencing, pits, water well drilling & actual bore-hole position needs to be determined. With the exception of the in-and-out roads, the surface owner has little to say. He/she still has 100% control of access on/into the surface of the land before court action begins. The production company will make substantial offers to the surface-only landowner in up-front cash, fencing the immediate area, gate cuts & security, cattle guards, PLUS purchase the 4 acre +/- site for actual O&G well installation & production equipment. The mineral-less landowner does not participate in the future royalty payments if they occur. The Texas courts ensure that within less than 15 calendar days after suit is filed by the production company, they can move in while the mineral-less land owner goes shopping for high priced lawyers.
4. State of Texas OM&G laws are written to ensure that a militant landowner can't lock out mineral production companies. After all, the State of Texas is going to get the SEVERENCE TAXES (2.xx to 7.xx percent) of every dollar of production from the well.
We have personally experienced most OG&M elements including a major court battle several years ago with one of the largest pipe-line companies in the US. We got our selling price for right-of-way but did not receive reimbursement for a cent of our $40,000 plus legal cost. Again, Texas OG&M laws protect the producers, and pipe-line companies
Thank you for the information, nice to know when we get contacted. :)
ORLAN H FRANKS JR said:
Surface interest ownership is handled differently than no-surface mineral interest owning only parties.
1. Mineral interest leasing does not have to involve 'surface owner only' up front. The lease company can be anyone in that bid'ness and they will negotiate with each mineral interest owner separately. A 1/2 (50%) mineral owner will cut their deal, a 3/16th mineral owner, a 1/64th mineral owner will each cut their own deals separately. The smaller mineral interest owner may be offered a larger future royalty percentage and a larger bonus than the 1/2 mineral interest owner. Getting 100% mineral interest leasing is the land man's objective. If a small mineral interest owner doesn't like the offer(s) or just won't deal, then the State of Texas has provisions in the Texas OG&M laws that would allow the exploration/drilling to start without 100% of the mineral interest being leased. Each mineral interest owner therefore cuts their own deal.
2. CAUTION for Non-participating mineral rights owners, you have no say-so in the negotiations. You will get what the other participating mineral rights owners work out with the leasing company. Non-participating mineral rights owners are dependent 100% on the participating owners lease negotiating skill and success, bonus $$ and royal payment percentage will closely mirror the participating mineral rights owners. The non-participating owner may not have to even sign the lease - it already taken care of in the Texas OM&G law.
3. The surface-rights only owner remains out of the picture until exploration, drill site selection, roads, fencing, pits, water well drilling & actual bore-hole position needs to be determined. With the exception of the in-and-out roads, the surface owner has little to say. He/she still has 100% control of access on/into the surface of the land before court action begins. The production company will make substantial offers to the surface-only landowner in up-front cash, fencing the immediate area, gate cuts & security, cattle guards, PLUS purchase the 4 acre +/- site for actual O&G well installation & production equipment. The mineral-less landowner does not participate in the future royalty payments if they occur. The Texas courts ensure that within less than 15 calendar days after suit is filed by the production company, they can move in while the mineral-less land owner goes shopping for high priced lawyers.
4. State of Texas OM&G laws are written to ensure that a militant landowner can't lock out mineral production companies. After all, the State of Texas is going to get the SEVERENCE TAXES (2.xx to 7.xx percent) of every dollar of production from the well.
We have personally experienced most OG&M elements including a major court battle several years ago with one of the largest pipe-line companies in the US. We got our selling price for right-of-way but did not receive reimbursement for a cent of our $40,000 plus legal cost. Again, Texas OG&M laws protect the producers, and pipe-line companies