New to Gas and Oil


#1

My wife and I inherited 30 acres of mineral rights in Ritchie County, West Virginia.

We just received an oil and gas lease from a Clarence W. Mutschelknaus, Sr.

The property is on the waters of Dog Comfort Run in the Grant District. We need help from folks like you so we don't get taken to the cleaners. The offer was $1000 per acre and 15% Royalty. Good or Bad????

Thanks in advance

Don


#2

3000 and 18% is still out there in the leasing side. Before oil went down, 3500 and 18% was out there. That seems like a lowball offer. Some will come along and offer low and then turn around and sell the lease for profit. Get a good lawyer and be careful out there.


#3

What Brad said. The leasing company you mentioned is not going to drill a deeper well, and as far as I can find, is not doing any drilling in Ritchie. I just looked in the online records and saw some leases to that man, and an assignment to Antero.

Most of the interest in curent drilling and leasing is in Clay and Union districts. I expect one day they will get over to Grant. Dog Comfort is in the part of Grant that is closest to the Clay drilling activity, so probably more desirable than other parts of the district.

If you want an attorney (always a very good idea) i use Kyle Nuttall, from this forum. There is a Ritchie county attorney that is good: Rodney Windom and his firm.

Please ask if we can help some more. it is to everybody's advantage to share information and help each other and not take low offers; they will be pointed to as the norm.


#4

Mutschelknaus is not a developer. He flips leases to other companies that are. You will probably get a better lease in the way of other terms from him than you would from Antero or EQT (the most active producers in Ritchie), but he won't pay top dollar. The good news is that if Mutschelknaus is interested in your property then there's a good chance a developer will be interested in the next six to twelve months. He doesn't pick up random properties.


#5

I have an existing lease on 350 plus acres being terminated with multiple low producing wells now. The shallow wells need to be cleaned or reworked. as the Mineral owner, how are existing well royalties typically valued or divided/handled?


#6

What district in Ritchie? And, do you mean that you are terminating the lease, or the company is terminating? Or are they just stopping production to get the reworking done? Your question makes it sound like you have some co-owners of the mineral rights.


#7

We have consolidated all family members into a single LLC., and are in the final process of terminating a 1970’s lease due to performance/payment related issues. So soon we will be royalty owners without an operator or current lease. The present operator was the original well driller for all existing wells.


#8

Nancy, we have consolidate all family members into a single LLC over the past two years and have recorded all the property transfers with Ritchie County. The property is in Smithsville and is over 375 contiguous acres. We have managed the mineral rights for the family since 1985. The current Leasee has failed to maintain/cleaned or reworked the wells and thus the production is very low. The leasee hired the original driller as the well tender who maintains and processes all revenue payments. Over an extended period the operator has claimed expenses exceeded revenue and retained all revenue, even though the lease clearly states well head payment to the MR owners. So after a legal battle the Leasee has decided to return their interest to us the MR holders.

So soon we will be the MR clear title holder of several shallow wells that need cleaning or rework, as well as the MR owners of the entire acreage for additional use.

Thoughts or recommendations?


#9

#10

#11

My family inherited mineral rights on 220 acres near Pennsboro, WV, Ritchie County, Clay District, from William Simonton, who lived there @1880-1920. Shallow wells have been producing since (I’m told) 1899. However, no descendant I know of has ever received royalties. In 2016, we started receiving lease solicitations, all of which a family member (since deceased) signed and returned without questioning. I’m now inheriting a file full of mineral lease documents dating back 40 years. I’ve tried called the companies involved (Antero, Consol, Alliance, etc.) with most of the results being of the “voicemail” or runaround variety. I’m considering hiring an oil and gas attorney in that area to bring pressure to bear on these folks and to investigate the terms and legality of these leases. Any advice would be welcome.


#12

Sounds like you need legal support. A search of the County records and wells by API # would be a good start. We have spent 3 years working similar issues and had the documented lease and assignments, and had consolidated all heirs dating back to 1890 consolidated into a single ownership LLC. Once that was done we filed suite as we had received no royalties in the past 10 years. Our lease was explicit that it was well head due. It is an expensive and lengthy process. Hopefully yours will be less convoluted.


#13

Thanks for your response. Having worked as a corporate CFO for some years, I conjecture some of these companies have practiced the “if they don’t call, don’t pay” principle of accounts payable. Some even claimed they’d never heard of the leases, even though I held them in my hands and read off various identifying numbers. Maybe I’m cynical, but 2 weeks of calling 8 companies and only 1 return call makes me suspicious. (One company’s voicemail said, “Leave your number and someone will call you within 15 business days.”) Going the joint LLC route for the 10 surviving heirs sounds like a good way to go. Now, I either have to find a good legal representative up there, or go on a road trip to West Virginia and to the well sites and order them to “cease and desist” pumping operations. That would be more fun (and I ain’t scared of no oil rig workers neither).


#14

The one listed here Nuttall maybe helpful or there are a few specialist in Charleston and Morgantown. Do not get a generalist, get a specialist.


#15

Thanks again. I’ll add him to my list and will write to several and see who replies. Can you believe it? One lease offers “1.2% royalty”. I’m afraid my relatives didn’t have much business sense. But these companies are in for a surprise. This whole area is new to me and quite fascinating. I also suspect I may have long lost relatives in the Pennsboro area. I may go there and scope it out. Doing business via phone and mail doesn’t compare to showing up in person.


#16

I and my family will continue consulting and sharing info regarding our exploration of these mineral rights. Our rights date from 300 acres owned by my g-grandfather, William Simonton, in Ritchie Co. The first producing well dates from 1899-2010, with new companies now engaged in deep well/fracking exploration and production. Companies involved include Dominion, Alliance, Diversified, Antero, CNX. We are discussing how best to proceed (an LLC as suggested above, an OG attorney in the area, an abstract in the courthouse, etc.). Some of these companies have been forthcoming, others, not. Our family paper trail of records, etc, has been mislaid over the generations. However, as a former CFO, that will not serve as any serious obstacle to me. More to come.


#17

Have you done any searches in the courthouse or the online documents database County Documents select Ritchie A lot of information but a little hard to get started. If you have not used this before and have questions please ask.


#18

Thanks for the referral. I’m researching that resource now.


#19

BTW-- Nancy Mosley is a kind person.


#20

Thank you very much! I like to share what I have learned and hope others are able to do the same sometimes.