My 2 sisters and I own several mineral rights in McKenie county. We currently have all of them leased. All have sent us division orders and have already been paid on most of them. We have one section that is leased throught TRZ energy. Hess bought our leases, but SM Energy is who drilled. When I received the first division order I had started checking into well status on the leases. I contacted SM Energy in February 2012 and informed them that we owned mineals rights on this well and we had leases with TRZ. This well was drilled in May 2011. We received absolutely no correspondence what so ever from SM Energy. Our leases were signed July 2010 and recorded at the county in September 2010. Through a series of back and forth with them and the landman. We have supplied them with all the information that they require including probate documents that were done and recorded in September of this year. The problem that SM Energy is having I am assuming is when my grandmother did the mineral deed, she listed my father as LeRoy when his full name is Howard LeRoy but his father was Howard. Therefore my father was always refered to as LeRoy and never Howard. When we signed the leases all that was asked of us was Affidavit of Identity which was also recorded at the county in September of 2010. None of the other companies are having any issue with this. The end result was an amended division order from SMEnergy on May 10, 2012. The amedments on it is as follows: 1. NOTE: By signing this amended division order, you are indemnifying SM Energy Company from any and all claims, demands, or clauses of action by any party which may arise regarding this interest received from the Howard LeRoy ***** Estate. Pending SM Energy's receipt of the signed division order, your interest will suspended. Hand written on the bottom of the Division Order is this: *Due to non-participation in the drilling of this well, you will receive the state-mandated royalty interest until payout of the well. At that time you will be credited with your lease royalty interest. None of the other division orders we have (6) state anything even close to this. Hess corporation emailed them and said: Can you explain why our leases would be subject to forced pooling and penalties? If you are recognizing that these leases are ours then they should be applied to our working interest as a participating partner in this well. I don't believe that the heirs, and our NRI, should be subject to the 150% payout for unleased mineral interest owners since they they validly leased the interest they acquired from LeRoy. When new leases are taken and title requirements cured resulting in new owners, we back date their interest to first production of the well. These leases were taking prior to production and thus should not be subject to any penalties or forced pooling agreement. If I am getting this all wrong please let me know but what you are proposing is not what we usually do in a situation like this It has been 3 weeks since the last correspondence with the above email from Hess. I have been going through the landman who has been very helpful. Not sure what to do from here. We have not signed the amended division order. We each only own 1.67 acres in this well it isn't a lot of money, but still our money. I am wondering how many other small guys SM Energy has tried to keep their money too! As not once did they attempt to contact any of us. Any help would be greatly appreciated. Keywords: RSS
Joni, it sounds like SM can't find the lease. You might send a copy of the lease, or at least the recording number on it, to the division order people at SM if you get their attention. I would have thought Hess would be on top of this because they would like to be paid also I assume. I definitely wouldn't get an attorney yet.
I have sent them the recorded documents with McKenzie county - the leases were emailed to them from the leasing company (landman) the signed copies. I sent them copies of the mineral deed, the probate, the affidavit of Identity, my mother and fathers wills along with the document #'s as they are all recorded in the county records. In just don't think the amended division order is right. As Hess stated in their email to them why are they doing things this way when we had a signed lease long before the well was drilled. Thanks for the advice I guess we will just have to wait and see if Hess gets any response from them.
Joni,
Sometimes it makes a difference by sending documents and such by 'certified mail' where someone with the company has to sign for it. I've had that happen to me. Didn't send papers by 'certified mail and the company says they didn't get them. They probably threw mine in the trash. Oh no, they wouldn't do that. You want to bet? Next time I sent them by 'certified mail' and they received them and I received from the USPS a signed card by the company in question. Good luck on your journey thru the brambles. I believe R W Kennedy calls them 'cheap charlies'.
Clint Liles
Mr. Liles is right, sometimes it's not what you know but what you can prove.