My Great Grandfather retained mineral rights to property he owned in New Mexico. My understanding is after he passed his rights passed onto his children, then when they died, the rights continued to pass down to each sibling.
My mom passed a couple years ago, she leased the property once and I think only received 1 royalty check back ion the 1990’s for 1500.00. Divide that by 5 and a royalty might be 300,00 for me. Not cost effective to pay for a lawyer.
Last summer I was contacted by a firm wanting to lease the rights. Since I am not familiar with the leasing particulars I did not follow up. Basically they wanted a 3 year lease, automatically renewable for perpetuity. I was not comfortable with that.. Recently they have contacted my sister with the same lease questions. We are at a loss as to what to do.
I don’t know how the inheritance works with the rights. I haven’t claimed anything in New Mexico. My mom died without a will so I assume the rights automatically fall to me and my siblings.
I also heard from a relative who received a certified letter from the same company stating to sign the letter if they wanted to participate, and each participant would be responsible for a portion of the drilling costs. She is worried said company is going to come to collect a large sum to pay for drilling she can’t afford.
Any info or a direction to go would be helpful.
Thanks, rocketman
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You have a number of issues here. Minerals are real property and title must be established in the deed records. Since you mother died without a will, the minerals will pass to the heirs (spouse and children) as specified under the NM intestacy statutes. However, you still have to establish title into the heirs and a NM estate attorney can explain that process. It is in your best interest to sign an oil and gas lease and be paid royalties. An oil and gas lease has a primary term (e.g. 3 years) to establish production and then stay in effect until all production has ceased, which can be decades. It differs from a rental apartment which has a set single limited term. If you do not lease (unleased mineral owner), then your rights are also set under NM law. The the minerals will be included in a NM state pooling order and, as I understand it, you will be paid a lower royalty until the “payout”, which is when the well revenues have fully covered all drilling and operating expenses, and then be paid a higher royalty. But only AFTER you have established legal title to the minerals in the deed records. Do not sign the participation as you will not want to become a working interest owner and have to pay costs up-front. NM law is complicated and there is a lot to learn. One place to start is National Association of Royalty Owners (NARO) and join as NM owner. These minerals have become very valuable in recent years and the royalties can be significant. It is advisable to have a NM oil and gas attorney review the lease to make sure you and the other heirs get the best terms.
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