Hello, I work for an oil company and although there are a few out there that are not completely ethical, not all of us are out to profit at the expense of mineral owners. It is a job--Would you expect a plumber to not get compensated for working on your toilet? Some of these mineral interest owners have messy land titles that need cleaning up--Ex: you own interests, but say they were your great great grandfathers--the more honorable oil companies will trace your ancestry back generations, procuring documents which entitle you to be the legal owner--this way, if a rig is drilled on your land, you would get the royalty checks. If this title curative never happens...those checks would go to the last known address of the technical owner (your great great grandfather). This process of getting interests into the current owner's name is a tedious one as well as expensive. This is why oil companies offer the royalty percentage anywhere from 12 to 18.75%--so they are duly compensated for this work(and they recieve the remaining percentage out of the 20). It would either be that or a lower sign-on bonus for some cases.
As far as the gross acreage/ net acreage total... You own 9.6 acres out of the 37.8 acres in that particular township-range-section. You don't own the total 37.8--that is just what your actual acreage lies on, if that makes sense?
Also a lot of oil companies are not local (Hess is from Texas)--some are from Colorado-Nevada-etc.
There are a lot more factors at hand here than just oil companies trying to make huge monetary profits at the expense of the mineral owners (although some of them do)--it is not a practice all of us adopt and that I can assure you.
Donald R. House said:
Exact same cenario here. Hess you should watch, because nothing adds up when it comes to them. I have 37.8 gross acres that was worked out to 9.6 net mineral acres. But that acerage is figured out by the energy comp. And if you have Lone Tree Energy once the lease is signed they don't care who gets burned on their lease. Be sure you read your lease very carefully if lone tree is the one you sign the lease with. Because I do believe they probably use same leases. Make sure you read the lease carefully. Seems funny how you here how wealthy all the local mineral owners are getting in ND, and the not locals getting shaft? Pretty clear how it works in ND.