My wife/her family own mineral rights in a Washita County quarter section (~160 acres) with interests split in three 25% pieces plus three 8-1/3% pieces. In the past (mostly prior generation holders), leases and bonus payments have been executed by just one or two of the parties (max 50% interest) apparently without contacting the other parties.
Is it 'legal' or common practice for lessee to only contact a minority (up to 50%) of the owners?
Does the lessee have an obligation to contact other owners? Does the lessee have obligation to pay bonus to other owners and execute similar leases?
I think I know the answers but I'd like to have comments from more knowledgeable members. The family is planning to act/negotiate together in the future on any upcoming lease offers.
Thanks.
Was the mineral interest in a estate distributing payments? Maybe that would be the difference. I own fractional interest all over in some case very small and I have never had an oil company not negotiate with me directly when it came time to sign leases.
I agree with Robert G.
A family member could middleman your lease.
You should be able negotiate leases at a larger bonus with or get forced pooled independent of others.
Agree with Robert and Tom, too many cooks spoil the stew. I found that out when we relied on too many people in our family in an oil matter last year which cost us financially. Now I am the single point of contact for oil matters. Pick one member of your family to interface on everyone's behalf and make sure that person is reliable and willing to put in the work and learn about oil and the family's situation. You do have more leverage if everyone pools their interest instead of fighting inside the family.
Tracy, yes it's legal and a lessee/operator just needs to lease enough interests so they control the spacing so they are the operator and not some lesser interest holder. Sometimes a lessee has no intention of drilling and intends to assign whatever interest they lease to the eventual operator at a profit. There are more ways to make money in oil and gas than drilling and producing.