Mitchell County TX broken lease?

[anon18092549]

My sister and I inherited McCabe lease royalties in 2001, we are 4th generation owners. Weird things began to happen in 2017 and continue to this day. We have 6 questions, see end of post. Please be patient with explanation which follows, I tried to edit mercilessly.

In '17 Clayton Williams sold out to Noble in Houston, which in turn sold McCabe lease operating rights to Longfellow in Addison, Texas. Received a less than $10 check from Longfellow in Dec. '17. In 2018, received no payments, not even the “shut in payment” (which is more than the $10 Longfellow sent) required by lease. In 2019, received no payments, including no “shut in payment.” While preparing tax return, realized something was wrong, called Longfellow division order clerk. She told me Longfellow sold operating in May 2018 but told me the buyer was “confidential.” I called the county tax office, buyer was Royale in San Diego, deed was filed on Dec 3rd, 2018 (he also told me there are 62 royalty owners on the lease). Called Royale–they didn’t seem to have a division order department. Called a Texas based landman I know and she spoke with Royale’s landman in Santa Barbara but got no information. She told me it appears to be a “broken lease.” When I asked if I should suspect dishonesty or incompetence, she couldn’t tell. In Nov 2019 (shortly after all the back & forth calls with Royale) I received a zero check from Royale. No division order, no request for my social security number, no verification of address. I received a 1099 claiming $0.05 revenue and 0.05 expenses. in 2020, I received a check in Feb, March, & April with a production report. The really weird thing is my sister has an identical royalty ownership in the McCabe and she has received nothing.

Ok, so here are my questions: Why isn’t my sister receiving a check like me? Do we have a broken lease? How do I find the contact info for the other 60 royalty owners? How do I find a lawyer to renegotiate the lease? Which company, Longfellow or Royale, dropped the ball? Is this incompetence or dishonesty?

[AimeeHess]

Welcome to the Mineral Rights Forum!

Unfortunately, some of your questions cannot be answered easily without some research on your lease and any wells on your property or in any unit that your property belongs to. Regarding whether the lease has terminated, you might want to do two things. First, you could go to the Texas Railroad Commission website and look up the production on this well. It may have stopped producing at some point. Next, you may want to review your lease to see under what conditions the lease terminates. Look especially for “savings clauses”, that allow the lease to continue in force even if there is no production. Keep in mind that oil and gas leases are pretty complex documents so you may want your attorney to look at the lease for you.

Generally, oil companies will not give you a list of royalty owners, although occasionally I see division orders that actually list all the owners. That’s not too common though. To find other royalty owners you will probably have to do a mineral title search to determine who the other mineral owners are. A land man can help with this. In addition, some county appraisal districts have interactive maps that show ownership of a specific property.

Hope this helps!

[anon18092549]

Thank you, especially for such a quick response. Actually, I was able to find a list of the mineral owners in Mitchell County on the Tax Collector & Property Appraiser websites. I searched on the lease number/ RRC # and found 62 owners, which was what I was told a while ago. The lists have the addresses for all but 2 of the the royalty owners, which were flagged as bad addresses.