My family owns oil and mineral rights to property in Gonzales County. The land was sold to another individual 5 years ago and we kept 75% of the mineral rights. They are in the process of negotiating with Magnum Hunter Oil on a lease and we did not know anything about this until yesterday. As the primary holder of the oil and mineral rights should we have not been contacted also? And will Magnum Hunter issue us a check for 75% of the lease money? It was by chance that we found out about this and the landowner let it slip out in our conversation. Thanks for any input!
Tony:
These are seperate ownerships of minerals as the surface owner holds 25% and you retained 75%. You can negotiate a lease with whomever you want. I would shop around and get the best bonus/acre and shortest lease term with the most % royalty. Magnum Hunter would not be issuing you a check unless you have entered into a lease with that company. Again, I would shop around for the best lease terms and then contact Magnum Hunter.
Thanks Charles for the feedback. EOG Resources has leases joining the property but they told me that they are not leasing a lot of property right now. Magnum Hunter is doing the active leasing and I finally was able to get hold of someone to discuss this issue with them. I’m not sure what happens when the landowner takes it upon himself to negotiate a lease with an oil company and the landowner has minority oil and mineral rights. I would think that the leasing company would do research to see that other members may have majority interest. It all can get confusing with so much going on in this area right now. We are located in the Eagle Ford Shale area.
charles s mallory said:
Tony:
These are seperate ownerships of minerals as the surface owner holds 25% and you retained 75%. You can negotiate a lease with whomever you want. I would shop around and get the best bonus/acre and shortest lease term with the most % royalty. Magnum Hunter would not be issuing you a check unless you have entered into a lease with that company. Again, I would shop around for the best lease terms and then contact Magnum Hunter.
Tony:
I wouldn't really concern myself with what the surface owner is negotiating and stay focused on leasing my 75%. It would seem that Magnum Hunter would be very interested in your minerals since they recently leased minerals in the area. I would still shop around with other companies leasing in this area and get the best deal possible. Good Luck!!
tony b. said:
Thanks Charles for the feedback. EOG Resources has leases joining the property but they told me that they are not leasing a lot of property right now. Magnum Hunter is doing the active leasing and I finally was able to get hold of someone to discuss this issue with them. I'm not sure what happens when the landowner takes it upon himself to negotiate a lease with an oil company and the landowner has minority oil and mineral rights. I would think that the leasing company would do research to see that other members may have majority interest. It all can get confusing with so much going on in this area right now. We are located in the Eagle Ford Shale area.
charles s mallory said:Tony:
These are seperate ownerships of minerals as the surface owner holds 25% and you retained 75%. You can negotiate a lease with whomever you want. I would shop around and get the best bonus/acre and shortest lease term with the most % royalty. Magnum Hunter would not be issuing you a check unless you have entered into a lease with that company. Again, I would shop around for the best lease terms and then contact Magnum Hunter.
Tony, did your family retain executive rights? Some people will reserve mineral rights but convey the executive rights to the surface owner. If that is the case, then the surface owner, even though he is a minority mineral owner, would have the right to negotiate an oil & gas lease. Once he reaches an agreement with an oil company, then the company would send your family a check for 75% of the agreed upon bonus consideration.
I’m not sure if the deed stated executive rights or not. I will look into this. Thanks a lot for the information. This is all new to us but this forum sure is insightful!
MST said:
Tony, did your family retain executive rights? Some people will reserve mineral rights but convey the executive rights to the surface owner. If that is the case, then the surface owner, even though he is a minority mineral owner, would have the right to negotiate an oil & gas lease. Once he reaches an agreement with an oil company, then the company would send your family a check for 75% of the agreed upon bonus consideration.
Dollars to doughnuts they leased the minor interest position that was also surface in order to enjoy allow unfettered seismic operations and if successful results were obtained, they already had an acreage position in the prospect.
Easily double what the pre-seismic price was if they want to lease post seismic.