I have mineral rights I’ve inherited at 22-18N-26W. I know virtually nothing about mineral rights in general, or how to gather information about them.
Today I received a phone call, and later a email proposal with the following offer.
Offer: $250.00 per net mineral acre subject to a 3/16ths royalty.
Currently they don’t know how many net acres I own, but they would pay the expenses to determine the net acreage.
Any advice and information would be appreciated. Thank you.
That section appears to be producing (Meaning you cant lease it unless the last lease had a depth clause and they want to drill deeper). Who was the company that offered to lease you?
Thank you. Can you show me where you found that information?
The company is Cobalt Energy Partners, LLC. Operating out of Dallas, Texas.
Get all offers in writing. Also ask for 1/5 th and 1/4th options. If you just inherited, then you might have the description in your probate documents. Suggest that you read the Mineral Help section above.
Mewbourne Oil Company has the Satterwhite well which is still producing. I found it on the OK tax site. Gross Production . That well hold all the acreage unless there is a depth clause. You need to check with them and see if your ancestor was receiving royalties and get them transferred to your name. They will also know how many acres you have. Ask for a copy of the division order that was signed by your relative.
Thank you very much for that information! I went ahead and saved the information from the tax site and read through a bit of the mineralweb website. I’ll be calling Mewbourne later this morning.
I contacted the family member who was the executor on the estate, and she found a copy of the division order, and oil and gas lease. I haven’t had time to review the verbiage thoroughly on either. I’ll be reading them both carefully later today.
I was able to find the decimal interest (0.00041853) as well as the royalty (3/16) on the lease agreement. I found some examples online, but I still don’t entirely understand how decimal interest was determined on this agreement.
Something I also noticed is that the property description on the Oil and Division order specifies 640 acres, while the lease itself specifies "SW/4 NW/4 of 22-18N-26W, and containing 40 acres.
That is exactly the information you need.
The legal description identifies that you possibly own 40 acres our of the 640 acres in the section (which also happens to be the spacing for the well). I suspect that you own less because the descriptions on the lease are for the gross acres in a particular tract. Your actual amount will often be stated by a percent of that gross. It may say something like “an undivided 1/4th interest in SW/4 NW/4 of 22-18N-26W”
The decimal amount on the division order is calculated by a specific formula.
net acres / spacing acres x royalty x % perforations in your section. So a full 40 acres would be 40/640 x .1875 x 1.00 = 0.01171875 which is much higher than what the division order says. So apparently, the original 40 acres has been divided up over time and generations. Looks like you might have close to 1.43 acres. I can almost get the division order math to work out correctly.
Mewbourne should be able to give you the exact amount.
Thank you again.
I was able to contact Mewbourne and get everything cleared up. You were correct, the 40 acres had been divided up several times before I acquired this interest.