I am a oil royalty owner (I receive the royalty checks) in Texas but don’t have the Rights. What happens if the oil right owner sells the oil rights? This was left to me in a Will managed by a Trust stating that I would receive the checks for existing wells for now on.
This can get complicated and much depends on the trust documents. If you were granted the royalty interest in acreage and if there are new wells drilled on this property , then you are entitled top a portion of this also. If you were granted well bore only then you are not entitled to any portion of this new production unless it is a pooled unit. I would consult with an attorney to review the trust documents. The trustee may be in a position to sell these assets but you are entitled to receive a proportional amount from this sale equivalent to you division of interest in this property.
I might have confused you. From what I understand is that I have the royalties for the existing wells, don't think that I would get any royalties from new wells. At this time they are not putting in any new wells. What I am trying to figure out is if the Oil Rights owner sells off the rights to somebody else would I still get the royalties from the existing wells? Or would the royalties go to the new rights owner?
Steve:
I believe it would be a good idea to contact an attorney in regards to this will. He could most likely advise you by researching the wording in the will if you would still retain your royalty in the event of a sell by the Oil Rights owner. I have never dealt with this type of situation but I would think that the wording in the will would hold the answer to your question.
Steve Brown said:
I might have confused you. From what I understand is that I have the royalties for the existing wells, don't think that I would get any royalties from new wells. At this time they are not putting in any new wells. What I am trying to figure out is if the Oil Rights owner sells off the rights to somebody else would I still get the royalties from the existing wells? Or would the royalties go to the new rights owner?
You received an interest under the terms of a will... was this interest a non-participating royalty interest that the decedent owned, separate from the minerals? Because if so, my understanding is that once the NPRI is severed, they are still separate assets, and therefore, separate in convey-ability. I think that this MIGHT be the case in your situation, but again, I echo what others have mentioned, and consult an attorney.... or pay a landman to do the research to find out for sure.
I know if I was heir to interests, I'd want to research for myself to make sure :)
Brandon Sneed
Landman
(806) 789-2743
brandon@sneedinc.com