Is requesting a Minerals Ownership Title Opinion appropriate by a Minerals Owner? Has anyone ever had a Title Opinion changed with their new documentation? Did it require a Lawyer? Or is it just the process used by an Energy Company and/or Operator of a potential and/or existing lease?
Thanks a bunch in advance for insights on these issues.
Regards,
Ralpr
Ralph
Asking is appropriate, but unless the language in your lease specifically makes the lease holder provide that documentation, they can appropriate tell you no. That said, they should tell you the title opinion requirements for your particular mineral interest. As far as changing the opinion, I have certainly satisfied many requirements of an opinion which ultimately changes the status of the minerals, but that doesn’t necessarily change the findings of the opinions. Use of an attorney depends on the requirements.
Thanks Jordan - I was just wondering, and I'm not thinking it should go that far. I am baffled by a company that took over the Lease and they are only going to pay based on what the previous company paid - whether it is right or wrong. I have more due diligence to do, that's for sure. But I thought if we asked the Company first... I'll check the language on the lease, but I don't recall anything about Title Opinions, etc.
Ralpr
Jordan Murray said:
Ralph
Asking is appropriate, but unless the language in your lease specifically makes the lease holder provide that documentation, they can appropriate tell you no. That said, they should tell you the title opinion requirements for your particular mineral interest. As far as changing the opinion, I have certainly satisfied many requirements of an opinion which ultimately changes the status of the minerals, but that doesn't necessarily change the findings of the opinions. Use of an attorney depends on the requirements.
Depending on how old the lease/production is, there is a good chance that the new operator doesn't have the title opinion. Sometimes these old wells are sold sight unseen, no warranties, as is, and the new operator takes over as such.
Yep, that’s exactly the story. The RI started around 1937.
Thanks again for your time and effort on this, Jordan.
Regards,
Ralpr
Depending on how old the lease/production is, there is a good chance that the new operator doesn't have the title opinion. Sometimes these old wells are sold sight unseen, no warranties, as is, and the new operator takes over as such.
Jordan, Grantee purchases one fourth of the royalty and one fourth of the minerals So the Grantee becomes the Lessor… it appears to me it would be better to negotiate the RI based on the mineral ownership percentage instead of the one fourth RI? Assume the RI is 1/4, and there are six RI owners…
Or does the one fourth RI and one fourth of the Minerals just mean a RI of one fourth - end of story?
It would ultimately depend on the royalty on the lease. If the Grantee purchased those minerals and royalty subject to an existing lease, which sounds to be the case, he would receive 1/4th of what is likely a 1/8th royalty.
Interesting - you hit the nail on the head on this.
Thanks a bunch!
Ralpr
Glad that I could help.
Thanks Again - You’ve been a big help. I’m kicking myself - I’ve signed Division Orders from years ago where the Company says here we’re the new Operators - sign here, and you will get the same Royalties as you have been receiving. But these were for leases from the 30s and 40s and 50s - so, I’m stuck with the lower returns based on lower historic RI rates. Can one just up and send out a certified letter to the Operator and say “Stop, suspend payments and it’s time to re-negotiate” because I don’t think I’m being paid fairly - my Grandma was paid this when the Cost of Living was much lower… I’m sure it happens all the time, but I haven’t seen much discussion about this.
Glad that I could help.