Oil and Gas Lease in laymans terms

Hi, in previous posts i explained that we could not find Altex Energy Corp. and we did get a couple of other companies that had taken over Altex’s assets but to no avail. We still cannot find THE company that now owns the wells. This is a battle over my fathers estate and we were able to find this agreement. All we are trying to find out is who now is drilling and to get an accounting of what has been paid out since 2014 at the time of my fathers death. But first we need to understand this lease agreement. My sister, the executrix has been receiving royalty checks since my fathers death and has not been paying our share and will not indulge any information on anything what so ever Thank You so much for any help, this has been very frustrating.Horner Oil Lease.PDF (406.2 KB)

The lease was for a term of three years from July 30, 2008. If they did drill a well in the three years, then your father would have gotten royalties if his minerals were in the spacing of that well.

Altex Energy Corporation drilled the Mean 1-8H horizontal well from a surface location in section 17. It was completed on 12/12/2008. You can find the Well Location Exception documents under Cause 3 200806620 Order 561379. (Look it up here: OAP) Put the cause number in the Case # box to get all of the pertinent documents. The spacing is 640 acres, so your father’s minerals are included.

You can find all the info on the actual well by looking it up on the OCC wellrecords site. Test Type in 1715N04E in the location box. You have to use section 17 because the surface location was in 17. If you sort the list by date and then by Well name, you can find the history of the well. 1073 is the change of operator form. Look for the next change of operator form. Equal Energy US had it from 2010 to 2019, so you need to contact them for records. You also need to contact Prairie Gas Company of Oklahoma for anything after the last sale to them. You may have some difficulty if you are not the executor of the estate. No one is drilling now, but the well is still producing at a nice rate.

In general, the decimal amount that you get is set up by the following formula,
Net acres/spacing acres x royalty x percentage of perforations in your section. In this case, you need to know the net acres, the spacing was 640 acres and the royalty was 3/16ths (.1875%). The lease says a gross acres of 80 which is the way leases are worded. However, your father may or may not have had the full 80 acres. The original deed or earlier probate documents would tell how many acres he actually had. If he had a will, then the will would need to be probated in the state of his residence and then filed additionally in OK in Lincoln County (if he did not live there).

This will get you started, buy you may need to contact an attorney to get things settled properly. The well has produced over 3BCF of gas, so significant.

You can find the last few months of production on the OK tax site. Type in Meen in the “lease name” box. Scissortail Energy LLC is the reporting company. Gross Production

Do understand correcly–if my grandfather died in Illinois, that his will is to be probated there and then a copy filed in Oklahoma in each of the counties where he also has mineral rights? Why, when I sold minerals in New Mexico, did they probate there instead of finishing the probate already begun in Illinois years ago? Clarification on this point would be most helpful as I was contemplating a separate probate for Oklahoma.

Good afternoon Lillian. Each state has laws on whether out of state probates will be accepted. For Oklahoma, Oklahoma does not accept out of state probates. You can sometimes do a shortened probate process (ancillary probate), but if your grandfather owned mineral interest in Oklahoma his Will will have to be probated in Oklahoma.

I am seeing this happen far too often, I had a similar situation. The Executrix continued to receive and cash the checks, without distributing them, for 26 years! That was 26 years my then wife, and now daughter should have received 1/5th. Somehow it seems in this modern world of computer information, the oil companies could have, and in my estimation SHOULD have, made at least checks of the Social Security Death Index and other available probate records - at no cost, computers could have done it all. Somehow I cannot excuse oil companies for paying a dead person for 26 years when the information was readily available to have prevented it from happening.

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Thank you for your prompt reply. For a minute there I was hopeful!

No you don’t have to probate his Will where he lived if there is not property in that state. You can file a simplified probate in Oklahoma without traveling here to do so.

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