Looking to Lease in Daniels County, MT

My brother and I are the sole owners of the oil and mineral rights in a sizable piece of property in Daniels County, Montana. We were contacted by an energy company out of Texas nearly a year ago requesting proof of being the recipients of this. We sent them a copy of the will. They said that the intent was to lease and drill. I have not heard anything since. I did find out that there had been some envirnmental legal action taken to place a hold on any new lease and drilling in Montana. Is that true? The land in question has had leases in the past. None presently. We would like to see some action taken again. Please advise........Glenda Coleman

The first action needs to be yours. Get the minerals recorded in your own name. It may afford you some protections. Having the minerals in your own name may make it much easier to get paid royalties in the event of successful drilling . Recording mineral deeds in your own name also may get you many more offers to lease, resulting in a possibly better lease offer. RWK

Glenda:

In regards to the reference you made about environmental issues in Montana, you might want to call either Tom Richmond or Jim Halvorson, both being with the Montana Board of Oil and Gas. I have had questions of that nature answered in the past by both individuals. You can go to their website to obtain their phone numbers.



r w kennedy said:

The first action needs to be yours. Get the minerals recorded in your own name. It may afford you some protections. Having the minerals in your own name may make it much easier to get paid royalties in the event of successful drilling . Recording mineral deeds in your own name also may get you many more offers to lease, resulting in a possibly better lease offer. RWK

I so appreciate the advice. Do I needa lawyer to do this or can I take action myself?

I would suggest that you contact the County Clerk's office in the MT county where your minerals are located. Check with them regarding what is required for you to file an Affidavit of Heirship. After you have established that you and your brother are the sole heirs and have this affidavit filed in the public records, it will help any O&G companies or leasing agents who are active in the area to properly find and identify you as the mineral owners for the property.

County Clerks offices are barred from giving legal advice.

However, a 2 minute google search turned up the following:

DJG said:

I would suggest that you contact the County Clerk's office in the MT county where your minerals are located. Check with them regarding what is required for you to file an Affidavit of Heirship. After you have established that you and your brother are the sole heirs and have this affidavit filed in the public records, it will help any O&G companies or leasing agents who are active in the area to properly find and identify you as the mineral owners for the property.

Wow, that was great advice. I recently discovered I owned 1/2 the mineral rights on some property my great, great, great grandparents owned in Karnes County, TX. Conoco Phillips is in the processing of sending me an oil and gas lease however after doing research I'm not sure if I should contact a lawyer or do myself. I didn't know my grandparents and in reviewing the advadavit link, I found I'm not able to answer any of those questions about them. Would you happen to know if that will hinder my ability to get the minerals recorded in my name?

Natasha
r w kennedy said:

The first action needs to be yours. Get the minerals recorded in your own name. It may afford you some protections. Having the minerals in your own name may make it much easier to get paid royalties in the event of successful drilling . Recording mineral deeds in your own name also may get you many more offers to lease, resulting in a possibly better lease offer. RWK

I discovered that an Affidavit of heirship is only needed when there is no will.

In my case there is a will, so in that case how does the ownership get changed?

I did not find that the Daniels county Recording office was very helpful.

This is frustrating when you live a large distance from the County in question.

I would love to hear from a landman....how do you go about establishing ownership....can a copy of the will be placed with the record? Is everything on micro film?

In any event we have about 1600 acres of land in Daniel County, MT....the oil rights are owned by my mother who has died leaving my brother and I ownership by a will.

Any help will be appreciated.

Hi Glenda,

I would like to discuss an oil and gas lease with you on your mineral rights in Daniels County, MT.

Thanks - Jerry


Mr. Bastian......I would be interested in what you have

Glenda Coleman

Hi Glenda, was wondering if you were able to find out how to transfer ownership of mineral rights

to you and your brother? I could have written your question as I have the same problem. I and

my brother were left mineral rights for land in Montana. Can't seem to get much help, even talked

to a lawyer.? We have the will and an old lease.

If you can pass on any info that you have found out, it would be of great help!!

Thanks,

Chris Marsh

I think you may need to probate the estate in Montana. The probate should generate a mineral deed of distribution. With this mineral deed recorded O&G co’s will be able to find you and know how to contact you. I think you may be required to do the probate anyway before you can collect royalties if the amount is large. For $100 per year royalty they may accept an affidavit of heirship.

If you want marketable title, you need to record something establishing your title in Montana. For leasing purposes (where the bonus consideration is at risk), Affidavits of Heirship are used to help establish title. But an affidavit is not a conveyance, it can only reference events and other title documents to make it clear you are the lawful owners. From another perspective, you have defensible title already, since nobody can really claim ownership on these minerals, and if they are severed, you cannot lose them to adverse possession.

So, the best first alternative to an ancillary probate in Montana is to locate certified copies of what you can find to establish title: a probate and decree of distribution (or Personal Representatives Deed) in the state of residence at the time of death; death certificate and copy of last will and testament; or the like.

Prepare an exhibit with a legal description of the lands you own (so they will show up and be indexed in the County Clerk's tract index) and reference the last document(s) of record that establish title in your predecessors in title, i.e. the granting instruments whereby you claim title; then simply record the documents in the County.

Operators are constantly presented with such opportunities to evaluate risk (and either take a stand on a title opinion requirement or waive the requirment). It will usually be a division order analyst who gets the division order title opinion and is tasked to contact the owners of record for division orders and demand compliance with a title opinion requirement. I suggest you discuss these alternatives to satisfy their risk policy (usually based on the size of your interest), and to place a document of record that confirms the relevant facts.

When it comes to royalties, operators and first purchasers of production don't want to pay royalties and then have to pay them again to someone with better title and claim to the interest.

But where creditor claims are so old they are barred by statutes of limitations, there is no particular reason for an ancillary probate, because there are no creditors to protect.

Where the heirs all certify they are the legal owners of the interest, on a notarized document, and attach documents to establish their title, they make it known (to all the world) of their claim title to specifically described lands, and by recording establish their priority against any other adverse claimants.

It then becomes a matter of risk evaluation for the operator to accept these alternatives in lieu of demanding a complete ancillary probate, prosecuted in the probate court of the county where the interest is located. Otherwise, estimate 6 months and $3-5K in legal fees and costs for such a probate.

That usually prompts a serious comparison of the alternatives suggested above, unless of course you have a valuable interest that justifies the expense and effort of a probate proceeding.

I hope this helps clarify your situation (which is a common one) and the suggested alternatives.

C.M. Sullivan

Glenda,

I have a client that is interested in Daniels County, MT. Please forward to me the legal descriptions of your Daniels County, MT minerals and the net minerals you own, and I can have my client review the acreage and let you know if there interested in submitting an offer to lease.

You can send the acreage information to me directly.

Thanks for your time and consideration - Jerry

Glenda,

If you wish to discuss your situation, I would be glad to provide some direction.

Greetings Glenda!

My 88 year-old dad owns mineral rights in Daniels and Sheridan counties.

Though not in the oil business, I'm in the finance business.

We have signed, recently, a few leases. We intent to lease them out over the next 2-3 years.

Some folks have been helpful here. We have not hired an attorney. But could be a good idea.

Several here are 'landmen' and the bulk of their best interest may not be all that beneficial to holders/owners of rights.

Take your time.

Dave