Mineral Rights Ownership Documentation and Process

Oil and Gas Leasing Help
1

My mother's estate includes oil and gas well royalties from a number of different wells in six different Oklahoma counties. She obtained these interests from her brother, who was an oil industry geologist in Oklahoma for many many years. My mother's royalty interests were assigned to one of my sisters, and she gets periodic royalty checks and distributes the accumulated annual royalties to the rest of the family members.

We are all getting long in the tooth and having discussions about whether or not to sell these interests. We have a seven inch thick stack of paperwork regarding these mineral interests but don't know what specific types of documents we need to have in order to establish a legal ownership interest in each of these wells for purposes of selling them.

My question then is: What document or series of documents establish legal ownership of a mineral right to a specific well, and where would we find a record of such documents in the event we can't find it in the paperwork we have. Thanks beforehand for any help you all can provide.

2

Charles:

You can research the records at the County Clerk's office in the county where the minerals are located. These records should reflect the legal owner and legal description of the acreage. Look at your existing paperwork for legal decriptions, etc. on these acreages in order to narrow your search at the records office.

3

Charles,

I can't offer any legal advice but I urge you to thoroughly investigate your well locations. With the current drilling boom in Oklahoma you could have some sizeable untapped value in those sections ie. the chance of drilling more wells in the future. Even if you are set on selling make sure you get what it's worth.

4

Charles,

I (almost) wish Oklahoma would tax mineral rights. Then there would be a much easier way to find the information you are looking for. A search like this can be difficult. I’ve been researching several family properties in Oklahoma and have ran into several issues like this.

Do you know how and when your uncle transferred the interests? How were the royalties assigned to your sister? Was your mother’s estate probated and the interests assigned to you and your siblings? If so, that record will be one piece of the puzzle and will establish part of the title chain.

Some counties are easier to research than others. Some of the counties have records on-line but the data start date varies.

Getting the title ownership researched can get to be a bit expensive depending on some of the above.

Rick

5

Since I've been cleaning up a family mess when my great uncle died 14 years ago and the family was lied to - I've been here and I'm doing this right now. It's time consuming but I would start with your mother's will at the County Courthouse.

But I agree with Michael Hutchison, I would get your paperwork in order but I would not sell your mineral rights. I think you would be making a huge mistake at this time. I'm afraid you would regret it in the future.

6

Charles,

Normally Geologist don't own mineral interest and instead own an override and sometimes but seldom a working interest. They take an override as partial payment for their work when they are drilling a well. When you stated your mothers interest was assigned to your sister it does sound like overrides as an assignment is a term normally used to transfer overrides. Few Rock Hounds will own minerals themselves but I have seen some that did but most just take an override. The assignment(s) that are recorded in the appropriate county clerks office will be file stamped and those documents on record are what establish ownership. Each assignment will state the interest which in the case of minerals will need to be verified thru title search to understand what that interest translates to. Mineral rights are normally but not always perpetual, overrides are not perpetual but exist only as long as the well is producing or the tract is held by the lease. Royalties can be perpetual and like minerals can be for as long as there is production or for a given number of years or as a life estate. Assignments will state exactly what interest in the well or tract is being assigned so just that document alone would be sufficient to understand the interest. Bottom line is the assignment documents are for record reference only, it is only what is of record at the appropriate clerks office that establishes legal ownership and nothing else. As a buyer of mineral rights I and other buyers can only verify title by examining records at the court house in each county. Division orders and revenue statement are sometimes used to verify your in pay but it will not guarantee good title. Revenue Statements and a list of interest or assignments are all any buyer needs from you. As for selling interest, I believe Iran/Israel is the only thing keeping oil prices above $70 maybe even $50, that and worldwide printing of money has to come to an end sometime. I believe at sometime in the future oil prices will be a whole lot lower and at sometime in the future prices will be a whole lot higher, when, who knows.

I understand that they have developed a collector that captures sub atomic particles and isolates the hydrogen nuclei that when accelerated and bombarded with pi mesons it creates a nuclear force that given nepletonic delay forces structure-dependent radiative electromagnetic force that when collapsed it will collide with the muon neutrino causing fermion breakdown. Bottom line is an unlimited energy source capable of being produce for little of nothing thus no need for fossil fuels.
m_0^2 c^2=\left(\frac{E},{c}\right)^2-\|\mathbf{p}\|^2\,
\left(Wc^2\right)^2= \left(\sum E\right)^2-\left\|\sum \mathbf{p}c\right\|^2
M^2 \, = 2 p_{T 1} p_{T 2} ( \cosh(\eta_1 - \eta_2) - \cos (\phi_1 - \phi_2) ) .\,
\Gamma \left ( \mu^- \rarr e^- + \bar{\nu_e} +\nu_\mu \right ) = \Gamma \left ( \tau^- \rarr \mu^- + \bar{\nu_\mu} +\nu_\tau \right ).
M^2 \,
\tau_l=\frac{B \left ( l^- \rarr e^- + \bar{\nu_e} +\nu_l \right )},{\Gamma \left ( l^- \rarr e^- + \bar{\nu_e} +\nu_l \right )},
 = (E_1+E_2)^2-\|\textbf{p}_1 + \textbf{p}_2\|^2 \,
= [(p_1,0,0,p_1)+(p_2,0,p_2\sin\theta, p_2\cos\theta)]^2 = (p_1+p_2)^2 -p_2^2\sin^2\theta -(p_1 + p_2\cos\theta)^2 \,
\Gamma \left ( \mu^- \rarr e^- + \bar{\nu_e} +\nu_\mu \right ) = K_1G_F^2m_\mu^5,
\frac{\tau_\tau},{\tau_\mu} = \frac{B \left ( \tau^- \rarr e^- + \bar{\nu_e} +\nu_\tau \right )},{B \left ( \mu^- \rarr e^- + \bar{\nu_e} +\nu_\mu \right )}\left (\frac{m_\mu},{m_\tau}\right )^5.
\Phi = \oint_S\mathbf{B}\cdot\mathbf{\hat{n}}\,d^2x = \oint_{\partial S}\mathbf{A}\cdot d\mathbf{l}.
= 2 p_1p_2(1 - \cos\theta). \,
Z(M\cup_\Sigma M^*)=|Z(M)|^2
\oint_{C} \mathbf{v}\cdot\,d\mathbf{l} = \frac{\hbar},{m}\oint_{C}\nabla\phi\cdot\,d\mathbf{l} = \frac{\hbar},{m}\Delta\phi,
W^2 = \left(\sum E_{in} - \sum E_{out}\right)^2 - \left(\sum \mathbf{p_{in}} - \sum \mathbf{p_{out}}\right)^2
m_0^2 = E^2 - \|\mathbf{p}\|^2. \,
7

Mr. Metz, I would agree that they could do it given funding and a couple hundred years to work on it. If the price of oil falls very far, to say $70 per barrel, the product of the Canadian tar sands will not be economical to produce, without the Canadian product in our market, I don't see the price staying down very long. Of course our producers could prove me wrong if they were to overproduce oil as they have gas, but I believe it's possible that they have learned something from where the price of natural gas is now and how it got there. As for the middle east, I'm giving long odds against peace breaking out.

8

Thank you for your reply Tim,

I think you may be right. We have found a series of an "Assignment of Over-Riding Royalty" documents. These documents identify a specific amount of undivided interest in a particular well or series of wells that are also identified. These documents have also been recorded in the appropriate county. These assingments were done by my mother before she died and are from by mother to my mother and my sister as Joint Tenants with Right of Suvivorship. There should then be previously recorded assingnments from my uncle to my mother as well as from the well producer/lessee to my uncle. As I understand what you're explaining, this would be the entire chain of title for this mineral interest. As such then, if we were to sell these interests, we would add another such assignment of over-riding royalty to this chain, and it would up to any prospective buyer to determine if such interest was in fact valid. Do I understand correctly that this is the usual and common practice?

Tim Metz said:

Charles,

Normally Geologist don't own mineral interest and instead own an override and sometimes but seldom a working interest. They take an override as partial payment for their work when they are drilling a well. When you stated your mothers interest was assigned to your sister it does sound like overrides as an assignment is a term normally used to transfer overrides. Few Rock Hounds will own minerals themselves but I have seen some that did but most just take an override. The assignment(s) that are recorded in the appropriate county clerks office will be file stamped and those documents on record are what establish ownership. Each assignment will state the interest which in the case of minerals will need to be verified thru title search to understand what that interest translates to. Mineral rights are normally but not always perpetual, overrides are not perpetual but exist only as long as the well is producing or the tract is held by the lease. Royalties can be perpetual and like minerals can be for as long as there is production or for a given number of years or as a life estate. Assignments will state exactly what interest in the well or tract is being assigned so just that document alone would be sufficient to understand the interest. Bottom line is the assignment documents are for record reference only, it is only what is of record at the appropriate clerks office that establishes legal ownership and nothing else. As a buyer of mineral rights I and other buyers can only verify title by examining records at the court house in each county. Division orders and revenue statement are sometimes used to verify your in pay but it will not guarantee good title. Revenue Statements and a list of interest or assignments are all any buyer needs from you. As for selling interest, I believe Iran/Israel is the only thing keeping oil prices above $70 maybe even $50, that and worldwide printing of money has to come to an end sometime. I believe at sometime in the future oil prices will be a whole lot lower and at sometime in the future prices will be a whole lot higher, when, who knows.

I understand that they have developed a collector that captures sub atomic particles and isolates the hydrogen nuclei that when accelerated and bombarded with pi mesons it creates a nuclear force that given nepletonic delay forces structure-dependent radiative electromagnetic force that when collapsed it will collide with the muon neutrino causing fermion breakdown. Bottom line is an unlimited energy source capable of being produce for little of nothing thus no need for fossil fuels.
m_0^2 c^2=\left(\frac{E},{c}\right)^2-\|\mathbf{p}\|^2\,
\left(Wc^2\right)^2= \left(\sum E\right)^2-\left\|\sum \mathbf{p}c\right\|^2
M^2 \, = 2 p_{T 1} p_{T 2} ( \cosh(\eta_1 - \eta_2) - \cos (\phi_1 - \phi_2) ) .\,
\Gamma \left ( \mu^- \rarr e^- + \bar{\nu_e} +\nu_\mu \right ) = \Gamma \left ( \tau^- \rarr \mu^- + \bar{\nu_\mu} +\nu_\tau \right ).
M^2 \,
\tau_l=\frac{B \left ( l^- \rarr e^- + \bar{\nu_e} +\nu_l \right )},{\Gamma \left ( l^- \rarr e^- + \bar{\nu_e} +\nu_l \right )},
 = (E_1+E_2)^2-\|\textbf{p}_1 + \textbf{p}_2\|^2 \,
= [(p_1,0,0,p_1)+(p_2,0,p_2\sin\theta, p_2\cos\theta)]^2 = (p_1+p_2)^2 -p_2^2\sin^2\theta -(p_1 + p_2\cos\theta)^2 \,
\Gamma \left ( \mu^- \rarr e^- + \bar{\nu_e} +\nu_\mu \right ) = K_1G_F^2m_\mu^5,
\frac{\tau_\tau},{\tau_\mu} = \frac{B \left ( \tau^- \rarr e^- + \bar{\nu_e} +\nu_\tau \right )},{B \left ( \mu^- \rarr e^- + \bar{\nu_e} +\nu_\mu \right )}\left (\frac{m_\mu},{m_\tau}\right )^5.
\Phi = \oint_S\mathbf{B}\cdot\mathbf{\hat{n}}\,d^2x = \oint_{\partial S}\mathbf{A}\cdot d\mathbf{l}.
 = 2 p_1p_2(1 - \cos\theta). \,
Z(M\cup_\Sigma M^*)=|Z(M)|^2
\oint_{C} \mathbf{v}\cdot\,d\mathbf{l} = \frac{\hbar},{m}\oint_{C}\nabla\phi\cdot\,d\mathbf{l} = \frac{\hbar},{m}\Delta\phi,
W^2 = \left(\sum E_{in} - \sum E_{out}\right)^2 - \left(\sum \mathbf{p_{in}} - \sum \mathbf{p_{out}}\right)^2
m_0^2 = E^2 - \|\mathbf{p}\|^2. \,
9

rw,

the new energy source bit of my comment was just a joke, but to say someone won't or couldn't find a sustainable, renewable, cheap energy for 200 years is a bold statement to make. Discoverys happen every day. One day we didn't have electricity and the next day we were going to the moon. Everyone told the Wright brothers man couldn't fly and they were wrong too. It'll happen in the blink of an eye probably by accident. Oil, WTI anyway was just in the 70's like this month if I remember right and talk of Israel going into Iran and all the talk of Iran trying to shut down the Strait is probably what kept it from going lower and brought it back up. To say it wouldn't go back in the $70's or lower when we get past this Iran bit is also bold talk. Sooner or later we will get past the Iran issue. China/India is slowing fast and everyone else has a huge debt load, maybe tremendous debt load would be a more accurate word to describe it, to pay back once we stop printing or borrowing.

10

Tim, Average 2012 YTD for WTI $93, lowest month was June at $79.

11

Charles,

If you offer the interest for sale you can just have a list of what you own or perhaps the source deeds (assignments) from your mother to your sister. The revenue statements (check stubs) will help back up your claim that your the owner and the revenue statements will help the buyer determine a value they are willing to pay. The buyer will still have to verify for their self you own what your selling. I make out my own deeds to save attorney cost but the buyer or you can make out deeds (assignments) and then the buyer will have the responsibility to have those documents recorded with the appropriate counties and contact the operators to be placed in pay with change of ownership. Normally the buyer will make out separate assignments for each county which some attorneys will charge $200 per document so 10 counties would be $2000. The buyer can place everything in one document and send that document to each county where the interest is one at a time perhaps using a separate blank sheet for filing stamps. The source deed (assignment) to your sister and as many revenue statements as you can save are all you need. I use to speak with a lot of geologist when I was a driller on rigs and they would all say how they had an override or stake in the well as part of their pay.

12

It it possible you have an override not only in the well, but in the lease also. It would be good to go back to the original source documents if at all possible.

13

I stand corrected and thanks for that correction Michael, it makes a lot of difference. If your wanting to be exact though as for where in the $70 range or lowest or whatever, eia states that Cushing Ok WTI spot price for JUNE 2012, NOT this month as Michael pointed out (2 months ago instead of this month, my memory is sometimes a little ahead of it's self) was $77.72 which is in the $70's.

14

15

From the chart it looks like a super spike or bubble on the right compared to the last 20 some years and also looks like a downward trend if you draw a line from the spike to today's price. Only the next move will confirm direction. Are we headed to $5 or $6 dollar a barrel gasoline, we would be if oil direction is up and could the economy handle that? Oil spiked to like $40 in the 80's then fell like 75% over a period of many years. Oil business is boom or bust, up and down, nothing goes straight up and stays there. It was just at like $30 a couple years ago. what makes anyone think it can not head back to that.

16

Go ahead Tim you are obviously a man who must get the last word!

Tim Metz said:

I stand corrected and thanks for that correction Michael, it makes a lot of difference. If your wanting to be exact though as for where in the $70 range or lowest or whatever, eia states that Cushing Ok WTI spot price for JUNE 2012, NOT this month as Michael pointed out (2 months ago instead of this month, my memory is sometimes a little ahead of it's self) was $77.72 which is in the $70's.

17

If you insist, but I only wanted you to know precisely, since I new how you wanted to be exact when correcting me. The meaning of my sentence and paragraph couldn't have been understood with your comment.

Michael Hutchison said:

Tim, Average 2012 YTD for WTI $93, lowest month was June at $79.

18

Tim, I think someone has already come up with the answer to fossil fuels but we aren't going to hear about it. I have an idea myself that we could do now, collect solar in space where it's alot more powerful and send it to earth as microwaves with receivers in deserts. It would require a big investment but the technology is already on the shelf and would improve even more I'm sure, in the execution. Tim, you mention getting past this Iran thing but you didn't mention Syria or the fact that the Saudis need prices to stay up, to comfortably spend the money on their citizens to prevent/stall unrest, that they have promised. My point is that widespread lasting peace breaking out in the middle east doesn't look likely to me. Tim, you mention the cooling of many nations economy's which is true but the economy will not recover without the expenditure of energy. I believe that all nations will eventually repudiate their debts, or actually print enough money to pay off the debts, see their currency tank, and start recovering from that point. Supply in the US has increased with unconventional fossil fuel production but when the supply increases and prices drop at the pump people just use more. Im not saying that the price will never drop to the $70's, I'm saying it won't stay there. As for not having electricity one day and going to the moon the next, some scholar thousands of years ago was rubbing a piece of amber with a piece of cloth and he had electricity, Benjamin Franklin was electrocuting turkeys with lightning to tenderize them. Tesla and Edison generated electricity in the 1870's/80's, about 70 or more years after Franklins time electrocuting turkeys and about 90 years later we were launching a rocket to the moon, which we have had rockets for many hundreds of years, probably thousands. Discoveries happen every day, mature technologies take awhile, didn't come cheap and as you say the economy is slowing and budgets are getting cut, supply of fuels is adequate, not the time to be looking for a big fat grant to replace fossil fuels in my opinion and I don't think the average person is going to come up with the working model in their garage of this new power producing device. I do agree with you that headlines drive prices. When the president released the pittance of oil from the national reserve the price of oil dropped $20 or more over a few days worth of oil that was released in drips over a period of time and without the publicity would have had no visible effect on a market that fluctuates, but the headlines caused that effect. I wasn't trying to start an argument. I was just stating that I don't think you have it totally right, not that I think you are totally wrong. The wright brothers were not wrong, I don't know who told you that, but the Wright brothers didn't just walk out to the barn and build an airplane, there have been kites to demonstrate airfoil technology for a long time, baloons, Leonardo DaVinci's parachute which has actually been tested and found to work. I realize that things happen alot faster these days, that's why I said 200 years for cold fusion or whatever and not 500 years as my consideration of history would suggest. Lets leave it at, if the miracle energy producer comes in our lifetime I will owe you the beverage or your choice and if it doesn't then you don't owe me anything, sound fair ?

Tim Metz said:

rw,

the new energy source bit of my comment was just a joke, but to say someone won't or couldn't find a sustainable, renewable, cheap energy for 200 years is a bold statement to make. Discoverys happen every day. One day we didn't have electricity and the next day we were going to the moon. Everyone told the Wright brothers man couldn't fly and they were wrong too. It'll happen in the blink of an eye probably by accident. Oil, WTI anyway was just in the 70's like this month if I remember right and talk of Israel going into Iran and all the talk of Iran trying to shut down the Strait is probably what kept it from going lower and brought it back up. To say it wouldn't go back in the $70's or lower when we get past this Iran bit is also bold talk. Sooner or later we will get past the Iran issue. China/India is slowing fast and everyone else has a huge debt load, maybe tremendous debt load would be a more accurate word to describe it, to pay back once we stop printing or borrowing.

19

Thank you to all that replied to my original post. I have a much clearer picture of my family's position regarding their mineral rights, and a much better idea of how to proceed. Thanks again. --Chuck Janisse

20

rw,

wow after one person says I think I must have the last word and you leave with your comments, I don't know whether to comment anymore or not. Your probably right about another source out there. As for unrest in Arab nations, I am sure you are right there that it will always be that way but right now the big concern is Iran and not so much any other countries other than they are looking at future issues with the Saudis. Syria did not and has not produced very much rise in crude prices. Saudi Arabia was just getting $20 something per barrel just 10 years ago, that is about a 500% rise in just 10 years, will it rise another 500% in the next 10 years and be $500 a barrel in 2022? (and no I am not going to argue if my figures are precise) I certainly hope not but why would one think nothing of it rising 500% in the past and not expect it to continue at that pace? You are right that unless another source of energy is found and we continue to use fossil fuel like we are using common sense says it must rise in price and be higher at some point in time, but will that be soon or 50 years from now, everything is just a guess? There is not enough fossil fuel to last for eternity, something else will be, must be found. What year was AC invented or was it that we began use of it and how many years later did we go to the moon? Yes we had lightning millions of years ago so I guess one could say we also had electricity then to even before mankind, you kind of lost the meaning of what I was saying, I only meant things can change so quickly. A beverage of my choice should another or miracle energy source become available, I think I will be pretty thirsty if I wait, but computers that we now have (I know, the Chinese had something a 1000 years ago) will expede it happening, probably.

rw, I am not going to argue with you as you'd probably kick my but and besides I like and enjoy your comments here on MRF.