Madison County, TX - Oil & Gas Discussion archives

Graci,

I forgot to add something.... Did you buy your property with the mineral rights conveyed into the deed of trust? I guess you did, however, if the previous owner had any deals with any oil companies you are still bound by them, if I am not mistaken and I have to contact a lawyer about all this as well.

I got a tough one to ask. When the family ranch was purchased over 38 years ago, the mineral rights were conveyed along with the deed of trust, and we have been receiving pittance royalties since then from shallow gas wells.

My question is whether the original mineral lease can that was conveyed along with the deed of trust can be re-written to provide us more favorable advantages, not just an increase in royalties because I don't think that is possible.

Martin,

I did a "find" for the phrase "held by production" and parts therein using Adobe Expert and could not find those terms.

This leads me to another question: if the original lessee, who we acquired the mineral rights from because they were not withheld in the Deed of Trust or Warranty Deed, doesn't some form of sub-leasing to parties other than the party the lease was assigned come into play. I wonder if I gave a quick call to the man that has been mentioned on the forum and who others have said mention you are a member of the Madison County Group might be able to shed some light on all this because those shallow gas wells must have passed hands between at least 18 oil and gas companies.

And I also need to know how to get the lessor, if they don't plan to do anything other than continue to play the trickling margin that is being produced to either do something or get off the pot.

Hey Guys! One of the things I learned in visiting with an oil and gas attorney is that if the production company did not abide by the terms of that lease “all those years” then it would not be applicable today…if you can prove it and usually you can. So, like Martin said, we have to read the lease thouroughly…get someone who understands the lease in my case to read it!..then do the research as to whether they actually did abide by all the terms in the lease. It seems like to me if you are going back as far as some of these leases go back, and if you add into the mix that they did change hands a few times, surely they didn’t follow every accordance they should have. What those old leases pay compared to what they are paying today is so extreme, it would behoove us all to look closely and do a lot of research. I love knowing we, th1e little guys, have this forum to talk and help each other on. Good luck

Planovictoria: You mentioned one of the better ways to start over with a new lease (this is not a direct quote) would be to show that over all the years the oil companies have held the lease they have not followed the terms as set forth under the lease agreement, and hence start over with a new lease agreement. I find myself about to probably follow this course of action, and in the process re-negotiate the royalty payment. My own thought is that I would probably have more luck in negotiating a higher royalty payment if I don't try to reach for the moon and instead just raise the royalty by say 1/32nd (of course I will listen to sensible arguments on asking for a higher royalty, if there is a chance I could get it. However, I am willing to bet that whatever the outcome this will probably end up in some for of legal arbitration and/or litigation, and by asking for an increase of 1/32nd increase in royalty payments (plus the costs of having to pursue the matter in court or in a magistrate's hearing), I feel that I could make a good case that in sixty years the value of the dollar has declined by almost 70%, taxes have increased by x% and to keep a lease in effect that is basically costing me money is (start inserting common and statutory precedents here) and therefore not unreasonable.

Anyone?

P.S. Did anyone get any information on any seismic surveys being done in the Southeastern/middle Madison, upper Grimes and eastern Brazos counties recently and if so did anyone catch the name of the survey company and whether they were shooting North to South, South to North, East to West, West to East or any point of the compass in between.

I had a landman do some research for me recently and he could not find any seismic surveys done after 1984 in this area.

Martin,

All of my investigating, i.e. reading of the TXRR files, indicates the last seismic survey in the county was in 1984. Back then they were still using 2-D surveying. Since that time the technology has evolved into 4-D rendering, so they know exactly where to the inch the oil and gas is located.

On the lease issue, I think the previous lessee had signed the lease with a forever clause. Whether we are still bound by what that fellow did in 1952 is something I will have to find out from an oil and gas lease lawyer. BTW I picked an additional 1/32nd royalty because I figure it would cause the least amount of bickering.

Also, since the lease was signed by the operator, who if I am not mistaken, acts as the boss of all the other players involved in the lease, and since that operator has been out business for thirty years, I wonder just how legal the lease has been since then.

Martin,

I came home in 2001, on a permanent disability listed retirement, after having worked in defense and nat sec. All of the family interests was being taken care of by my then 84 y.o. mother who would not listen to anyone, did as she pleased etc. I came across a new lease, she had signed where the new operator was going to do some horizontal drilling (this was back in 01 and I just found the document today), and they talked her into pooling 200 acres of our property into this arrangement (there was no dollar amount payable mentioned in the agreement, or any thing else you would expect in a normal agreement).

I plan to fight this for two reasons: first, she was not 100% mentally competent at the time and was not advised by a lawyer or anyone else of what she was signing. Secondly, they hit a dry hole, which I think negates their lease agreement anyway since the agreement said it was for the purpose of drilling a horizontal hole to find oil, and they did not find any. I know where to look and have the RRC files to prove it but I sure wouldn't show it to these pack of ********. What do you think? Can I go toe to toe with them even though I am now missing a few toes?

Martin,

I checked with her last night after making sure she was having one of her more lucid and clear of mind moments. She never received a check from the company that signed the lease (this I would know because I have every receipt from each oil company paid to her since 1969), and the company that forced the new lease was not one of the payees. Now, where they did want to do some horizontal drilling there is a well, and it still drips out a couple hundred a month to us (our share is .031or 1/32), however, I think this is covered under an old lease from the 50's which I am looking to bust up, and I think I have some just cause, for one not paying royalties on a scheduled basis, no bonus money offered or paid, etc. Wish me luck, because I may get orders to ship out come 1 September. BTW there is production work on the additional 200 acres but it is from our wells and not someone else's. I think I may also have some legal argument for the fact that she was approached to sign a complex legal document when she was living in an assisted living facility and not completely competent. Maybe something in the Texas Deceptive Trade Practices Act.

Texas%20Oil%20and%20Gas%20Property%20Rights.pdf

I thought Planovictoria might find this document useful. I can say that after having read it, just about every law in the Great State of Texas is weighted toward the oil company and not the land owner/lessee.

Martin,

I've got a landman and a former exec v.p. of an oil company pouring over all of our lease materials. I also have one of my Dad's former law partner's that I spoke to today, who although he is not a oil and gas lawyer, said that he would find me the best and help as much as possible (he specializes in Texas Deceptive Trade Practices cases).

As the jumpmaster used to say at Benning...STAND IN THE DOOR!

OK…I’ve got to talk to you guys! Wish we could all get together. I’ve been getting back to work after medical leave but I am finding a boat load of “inconsistancies” in all of daddy’s documents. I need to figure out how to do my own research to see what was produced and how much wa paid if any. These guys are snakes and to think they have taken advantage of good hard working people all these years…I hope I am wrong, but how can you tie up land this long and no one ever have gotten any money to speak of? How is it that we are so in the dark on our own property? If it is on the up and up, then let the sun shine on it and do everything out in the light of day…no secrets! I am coming to Madisonville sooner than later and bringing all of this with me. I may call and get “schooled” on how to do the research. I wish we could set up a room and just all sit and do this together until we get it worked out. I am still working with the lawyer who was an Exxon lawyer for many years, but likes helping the little folk now. He is helpful, but I want to keep digging. He can only do so much. Jack, the lawyer I’m working with got a $70, 000 check sent to one of his clients by sim[ly pointing out they hadn’t done X in the lease. Said they sent the letter, got a check sent back. No haggling, no court case. That should tell you something, my friend! Let’s keep working it. Martin’s got my number, if you want it I will give it to you in your inbox. Let me know, don’t want to upset your wife! : ) Vicki

Planovictoria: I was talking to a landman just this morning about how one of the lessors had really taken advantage of my mother while I was away assigned in the Washington Military District. She can barely see because of her cataracts, is deaf as a stump, takes so many medications from so many different doctors, it drives her primary care physician nuts.

Nevertheless, during this period this oil company ran an amended Pugh clause at her that basically cheats her out of lot. The landman said truthfully that Texas courts were hesitant to say the least to throw out a lease but that a lease could be sent back into arbitration so that a more equitable adjustment to the terms could be made.

1) Gather up all documentation: deeds, warranty deeds for your property that show the mineral rights were conveyed to you by the seller at the time you purchased the land. 2) Gather up all lease material and have a landman look over the lease for inconsistencies (i.e. things which are just not equitable to the lessee under normal circumstances and 3) once you have received the landman's report take it to an oil and gas lawyer (you will have already have done 99% of the research through the landman), and let him set up an arbitration hearing for a more just and equitable division of what is yours. I found out that the mineral deed, even if written in 1950, can be adjusted upward to 1/5th of the proceeds going to you and read that .pdf file I sent you.

Martin,

The thing I saw in that buggered lease agreement that my mother signed before I was PDRL'd back home, was the Pugh agreement wasn't depth restricted: instead it spread out all over the topography from one ranch to another. That's what really P me off.

P.S. Martin… In the words of Nathan Bedford Forrest…I am definitely ready to get there with the furstest with the mostest.

Jack,

Now that sounds like a plan. If you don't mind keep me posted.

Martin,

I am still trying to figure out all the obfuscating wording (if it is confusing to me, can you imagine what it must have been like for a woman in her 80's who has trouble seeing and is deaf as a stump) about the pooling of the land next to ours which is only 50 acres and has one well and how the company talked her into pooling 200 acres of our land as part of this deal.

Sounds like a scam to me. You might want to do a Google search and get a copy of the "CHECKLIST FOR NEGOTIATING AN OIL AND GAS LEASE" prepared by John B. McFarland of Graves, Dougherty, Hearon and Moody in Austin. It is a boilerplate for items that a lessee should have included in a oil and gas lease. I asked my mother if during all the time I was gone if she ever received a check for any of the items listed on this checklist and she said no. BTW, a landman told me to ask for a 1/5th royalty next time around and the company probably would not blink.

Martin,

I heard back from the retired oil exec and landman last night and they said they saw some things in the lease(s) that stank. However, stink as they might, no court in the state of Texas is going to terminate a lease agreement. The best that can be done is to go to the oil and gas lawyer, who they recommended, and have him point out the bad parts of the lease and then get an amended lease that has more favorable terms for me as lessee.

Martin.

The ranch is 324 ac. total. The pooling they want to do with the well that sits on a 25 acre tract is right next door.

Planovictoria:

1) My wife of 25 years has been the Department of Defense (not to say we did not have coed BOQs).

2) Of course the oil companies are snakes...they will use the most obfuscating language in an agreement to screw you around without you ever knowing they have even been in the room. Pack of b****ds. Makes me wish I still had my contacts at CENTCOM.