Mineral Rights / Texas

General Mineral Rights Discussion
#1

Hi - I need help in understanding "Mineral Rights". My father who passed away 4 years ago inherited mineral rights for approximately 49 acres in Montague County. He had the mineral rights since 1992 approximately. It had been in the family for years but the property was sold around 1967.

My mother who is still alive and did not probate the will.

We recently received a call - my mother - brother and myself from a Landman. Stating that we needed to sign some papers a " Ratification of Oil & Gas Lease ". As well we would have to sign ( all of us ) a Affidavit of Hership. My mother to this date is the only party receiving paperwork.

She has received the Ratification of Oil & Gas Lease but not signed anything.

The Landman told my mother that it was already leased that the company that he works for holds the lease. My mother was not aware of that.

My question is - how can it be leased if the survivors did not sign the lease or aware of the lease?

Is this possible?

Why do we need to sign the above papers now?

He is not telling her much - so we are not sure what is going on.

Can someone help us? This is all new to us.

Thank You

#2

Donna, the first step I would take is to find out who’s lease you all would be ratifying. Ratifications (“Rats”) are roughly an acceptance of a lease (terms, conditions, etc.). Typically Rats are used for the exact situation you listed above. Example: 1. Owner of a mineral interest passes, estate is not probated. 2. Widow executes an oil and gas lease. 3. Widow probates the estate after executing lease, but all mineral interest is conveyed to surviving children. In this case the lease would be no good and the record title owners would remain unleased. To ensure that the entire interest is covered Rats are necessary to the Lessee so their lease does not fail. In conclusion, I would first find out who’s lease you are ratifying, if it’s not an immediate family member I would start asking many more questions. In either case, I would contact the landman and inquire as to exactly why you are signing these, do not sign until you are satisfied with the answers.

#3

Thank you very much for the information. This information was very helpful and we will not sign anything till we have a clear understanding as to what we are signing. We did ask questions - but he would only say that it had been leased by his company and that was all. I received my packet of information as well and it stated that it was already leased. Thanks again - I am passing on your information.

John Burman said:

Donna, the first step I would take is to find out who’s lease you all would be ratifying. Ratifications (“Rats”) are roughly an acceptance of a lease (terms, conditions, etc.). Typically Rats are used for the exact situation you listed above. Example: 1. Owner of a mineral interest passes, estate is not probated. 2. Widow executes an oil and gas lease. 3. Widow probates the estate after executing lease, but all mineral interest is conveyed to surviving children. In this case the lease would be no good and the record title owners would remain unleased. To ensure that the entire interest is covered Rats are necessary to the Lessee so their lease does not fail. In conclusion, I would first find out who’s lease you are ratifying, if it’s not an immediate family member I would start asking many more questions. In either case, I would contact the landman and inquire as to exactly why you are signing these, do not sign until you are satisfied with the answers.
#4

The really short version of the response is that if someone wants you to ratify an agreement, it probably means they don’t think they otherwise have an agreement.

I’m not now licensed in TX, but it looks like I may need to waive-in so I can deal with the many TX issues that come up on this website.

There’s a really good Texas legal writer who sides with mineral owners who may also be effective counsel. I can refer you if you want.

Best,

Mike

1525 17th Street Denver, CO 80202 Direct: 720-341-1396 Main: 303-298-1020 melliott@elliott-legal.com www.elliott-legal.com

Clunky Disclaimer: Not legal advice and no attorney-client relationship established without further notice.

#5

Dear Ms. Meager,

Something that nobody has brought up is that it is certainly possible that you do not own the executive rights on the property, or you own a non-participating royalty interest.

If the landman is being cagey, I would suspect the latter. If indeed your interest is a non-participating royalty interest, a ratification could either be the smartest or dumbest thing that you could do, depending on where the well is located.

Ask the landman for a copy of the Title Report. If he refuses, then I would refuse until I completely understood what was going on.

#6

Thank you very much - we do not understand this process at all. It is all new to us, I will do as you advised and request the document - Title report.

My cover letter from the landman indicated that I have a non participating royalty interest. I thought that was due to the fact that my mother was still alive.

Thank you again - I think we need to get legal help on this issue.

All the information received is so appreciated. Buddy Cotten said:

Dear Ms. Meager,

Something that nobody has brought up is that it is certainly possible that you do not own the executive rights on the property, or you own a non-participating royalty interest.

If the landman is being cagey, I would suspect the latter. If indeed your interest is a non-participating royalty interest, a ratification could either be the smartest or dumbest thing that you could do, depending on where the well is located.

Ask the landman for a copy of the Title Report. If he refuses, then I would refuse until I completely understood what was going on.

Best,

Buddy Cotten
www.cottenoilproperties.com
#7