Q - Natural Resources LLC

Division Orders
1

We have royalty interest in a lease in Ward County that is in my deceased father’s name. I have a division order from the operator at the time and have collected funds from the State that were escheated since no division order was received. The previous funding entity advised that the funding is now being handled by Q-Natural Resources LLC. I called the only number the prior funding company provided and was informed that it was a cell and to text my email to be looped into a group mail with the company that is now handling funding. I did so and have had no response from anyone. I’ve called and texted but am not receiving any reply; phones and texts unanswered. I can see they are the operator on both wells and production has been ongoing. There are several oil entities operating from the same address in Austin and one is listed on this lease as well. The phone number I called ties back to this location, so I am comfortable that they are all related.

My questions are basically what rights do I have to get paid if the operator is ghosting me? And what responsibility does the operator have to inform or attempt to inform the royalty owners that they are now handling funding and drilling operations? It’s an established lease with production history going back to the eighties. My grandfather was deeded royalties from the original owner in the 1950s. My affidavit of heirship is on file in the courthouse, so the dots aren’t hard to connect had the effort been made.

Beyond texting and leaving voicemails, what options are there to get a division order to sign?

Thanks for any and all information or suggestions.

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Send them a certified letter with return receipt with a copy of the filed document. That generally gets a reply.

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Thanks for that very helpful advice, TODD_M_Baker. I’ve gotten bogged down tracing and following up from courthouse docs and maps, to see where our family’s mineral interests have wound up. Many holdings were left in my grandfather’s name, my dad died before the internet was full blown, so a lease offer or unclaimed funds were often the only way we knew what was out there. This forum is such a helpful place to learn and ask those questions that might seem obvious to those more experienced, but are show-stoppers for many folks opening that first offer letter. Thanks again!

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As you clear the title from your grandfather to your father to your generation family in the deed records, you need to send copies of the recorded documents to current operators to get in pay. If there are old leases still in effect or producing wells drilled which include your minerals, it is your responsibility to contact operator and/or lessee to transfer on their records and get in pay. These companies do not watch the deed records to do updates except for brand new wells or leases.

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Welcome to my world. Operator ghosting is a common problem in the industry. Some of them do not want to be found. They are required to list a phone number with the Railroad Commission. See if that number matches the one you have.

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My firm routinely deals with Q Natural Resources and I may be able to put you in contact with someone. If you are still struggling to get a response, please let me know if you would like to discuss.

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Thanks Tennis Daze for the response, I’m figuring out chain of custody on the properties, (I guess is what it would be called) through the County records. Though the dealings are somewhat interwoven and the fractions below a certain depth, versus above and overriding royalties, is a definite learning curve. Some are directly from the state or Estes family members, so the path is a bit twisted. Am I safe in thinking if it’s not found recorded at the courthouse, then it’s not a binding doc? I recall affidavits of heir forms being provided to me to sign a lease, though they hadn’t been recorded in the County. Determining the activity and the operator on some leases seems like there are exchanges that aren’t visible, but there’s lots of docs to peruse. Thanks in advance (and, in general)!

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My replies have not been getting here! The number did match, a cell phone that answered once, told me the name of who and what company was doing the division orders, never responded to texts or picked up again. I wrote down what I thought she said, Google and LinkedIn got me where I think I need to be, though I had to leave 3 msgs with an answering service, who, on my 3rd attempt, read me back my contact info from the first msgs, advised he would get it in front of someone “over there,” and I got… crickets. Finally, shot an email to the royalty dept through their site, expressed that the lack of response was disturbing, and got a return call next morning advising send paperwork via email, etc. The answering service had commented that, “they must be really busy over there,” the return caller sounded kinda frazzled at 9am. Looking to see how this goes. :eyes:

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Thanks very much, @EastTx_CP, I responded to you earlier, although I don’t see it, not sure if it got here, I’ve had some server issues sending replies, though I thought they’d been resolved. I have only had the single direct contact with Q, though I was finally able to get a response from the contact, whose name and company name was given on that call as being responsible for issuing div orders on Q’s behalf. I’m waiting to see if this contact follows up in a timely manner with the info provided, as getting a response from them wasn’t easy, and it was less than straightforward, so if there’s a continuation of this pattern, I will certainly reach out to further discuss. Thanks very much for the offer, as I’ve mentioned, this seemingly elusive behavior doesn’t exactly inspire confidence given the naturally complex nature of this business. Thanks again.

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Trying to understand what was going on with the affidavits. Were they presented by a landman representing the oil company? If so, it may have been simply to justify his taking a lease and not to clear up any title. It is important to understand that these are really legal documents and you need to be very careful about the language and what it means. You should never sign any legal document without retaining a copy for your records. As you search the deed records, be sure to try spelling variations as there are infrequent spelling errors in the lists. You can ask the County deed office to correct this. Also, sometimes someone will have used a middle name in some documents and only an initial in another document. E.g. Jones, Austin Lee and Jones, Austin L and Jones, A. J. This is for your title search (chain of ownership of the minerals) and only the recorded documents are binding. Once you identify a lease, the lessee can change by assignment whether in whole or in part and the lease(s) will be listed in the attached schedule. Keep spreadsheets to trace ownership and lease histories. Perhaps a separate page for each tract you are searching.

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Sorry for that avalanche of garbled information - seems my responses were bottlenecked. The affidavits were in the past to obtain a lease, as you said, separate from establishing ownership. They came to me knowing I was the likely owner, sure enough to bring an offer. Yeah, the name game is tricky, they were fond of just using initials and the last name, too. My grandfather went by E. E. on most everything, then I find Ernest, which is his given name. Then there’s notarized leases and deeds spelled “Earnest” so the net is cast wide when I’m searching.

One thing that’s unclear to me is the use of in-house lease numbers to identify a lease on the DO, when the legal description is taken verbatim from RRC docs, or a court filing that includes the RRC lease number, yet the DO only uses legal description Section, Block and the in-house number. I can see the production history for the wells on that lease, based on legal description and location, yet the summary pay history offered by the operator’s agent differs only in that the production is significantly lower than what RRC shows, and the lease number on their DO only exists in their documents, and that’s what they’ve apparently calculated payment from. Searching with their lease number, or referencing it no matter the public source, yields zero results. That, and the same operator changing names and RRC operator ID, though the rest of the details are identical (address, drilling field, wells).

Without their explanation, going from the DO to the RRC map confidently doesn’t seem possible.

Given their track record with me, not returning calls, ghosting, etc., I’d prefer a third party’s system of common identification telling me the facts and figures. It’s like a Texas-shaped object known commonly as “the Lone Star State”, but for our shared purpose, we call it “the Shining Star State”. (And, it’s much smaller, btw)

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Your posts are quite confusing.

“I have a div order from the operator at the time, and have collected funds from the State. It’s an established lease with production history going back to the eighties, my grandfather was deeded royalties from the original owner in the 1950’s. My affidavit of heirship is on file in the courthouse, so the dots aren’t hard to connect had the effort been made.”

“Though the dealings are somewhat interwoven and the fractions below a certain depth, versus above and overriding royalties, is a definite learning curve. Some are directly from the state or Estes family members, so the path is a bit twisted. Am I safe in thinking if it’s not found recorded at the courthouse, then it’s not a binding doc? I recall affidavits of heirship forms being provided to me to sign a lease, though they hadn’t been recorded in the county.”

What funds did you collect from the State for the wells in question? They should come from the operator. Is your father or grandfather on the division order? If your grandfather passed away after your father, have you read his will? You said that you filed an affidavit of heirship in the courthouse but then ask if it’s not found in the courthouse, safe to say it’s a non-binding doc? You brought up multiple depths, are you sure that you might own all depths/the depths that are still producing?

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Every company has its own system of internal well references for well ID numbers. The D.O. will reference the legal descriptions of the sections relating to the well and should name the well and hopefully the API number. You can look up the well by its API number on the RRC website using the last 8 digits (first 3 are county code and last 5 are well number). Then you can pull up the plat and other well information. That will get you to the RRC lease number - 2 digits for RRC district plus 5 digits for oil well or 6 digits for a gas well. RRC sets minimum acreage for wells depending on depths and related field rules. So a shallow well may only have 40 acres and a deep gas well will have 640 acres. The plat and permit should show the related acreage for the well and its location. This will affect your royalty decimal.

As to production history, gas is sent to a plat and processed and in the end there is shrinkage so that the volumes will not match the RRC. For oil, look at the disposition volume each month (not the produced volume) to see what should be accounted for. This is complicated and it takes a lot of time to learn everything.

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Thanks, TennisDaze, I appreciate that breakdown, for the most part, I’m following along, and have reached a basic understanding of the RRC info, not all the fine details/differences between oil vs gas wells- numbering distinctions, etc. but the API number (County and well), and that’s where my questions regarding this particular DO originate. Assigning internal designations by the oil companies involved makes sense, like any business to organize their systems, but this DO only references internal numbers for the lease/wells.

The “property name” on the DO, is the actual lease name as recorded in RRC, and the legal description named on the Exhibit A, is the legal description SW/4 Section 51- Block N & Section 60- Block A, the survey and County. Which I’m reading as the “southwest quarter of Section 51 Block N, with all of Section 60 Block A,” which follows because they are adjacent properties on the map.

There is no direct reference to wells, no associated API numbers, no external reference other than the legal description, as an identifier. There are multiple wells in various stages of activity on the general lease, but using that SW/4 designation as a reference to what the DO is paying on, is where on RRC, past and current operators (that match those referenced on the DO), show disposition numbers of oil being steadily trucked (per the code on RRC) without a break since the RRC records begin in 1993.

The DO that I am working from is dated 1/2003, but I do have a letter sent to me in 2015 from this entity, advising they are aware that my father had passed, and requesting paperwork to transfer ownership to the heirs. That letter only references the internal owner number and the internal lease number, and the legal name of the lease. I am using the specific legal lease name, and the associated RRC lease number to look at associated wells, and it matches the operators on the 2003 DO, as well as the current operator name that was provided to me as who I need to look to for current and future payments, since the operator has another entity handling their DO’s now.

Working from the records of State Unclaimed Funds (dollar amounts and the years funds were released by the generator of the DO, (multiple operators), I asked for the basis for the dollar amounts posted by the Comptroller, the internally generated “accounting summary” spreadsheet for my father’s owner number account that was emailed to me in reply to my request, shows years of sparse to zero production/disposition numbers for that entire lease using the legal description and the RRC lease number that matches the “property name” (which is actually the legal lease name) on the DO.

I’ve reached out multiple times for clarification, (with no response) to the person the DO division customer service rep advises can explain how the numbers provided were derived.

That’s why I asked about the internal system of well references and their association with the legal public descriptions? I understand how internally they can represent whatever suits the business needs, but in a public facing document like a DO, using the legal description is normally done to reference a commonly understood specific location and avoid ambiguity, but that’s not what is being achieved in this case.

Though, while I’ve seen some colorful descriptions referencing surveyor pipes and highways as landmarks in these old deeds etc, ultimately they describe a specific plot, this DO seems to avoid specificity by design.

Btw, I appreciate all of the information and help you’ve given me (all others, too), but, especially you. I know I can get long winded, and I’m trying to explain a convoluted situation without using names, and places out of courtesy (and liability), though it would be a lot simpler to do so, as the lease location is now urban and the companies involved are well known actors. The time you’ve taken to read through the server delivered puzzle of my posts, shines through, and I thank you.

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You cannot get specific answers without disclosing the location of minerals and the associated wells that you know about. No idea why you think there is a courtesy reason or personal liability issue to identifying your property. But if that is a real concern, then you need to hire a landman to fully research wells and your mineral ownership and help you calculate your royalty decimal(s), which can vary due to associated acreage. Then take all your records to an oil and gas attorney.

That said, your first goal is to clear your title in deed records and get in pay. The Division Order is an agreement between you and operator as to your royalty decimal in one or more associated wells. You can ask how the decimal was calculated. It assumes that you know what minerals you own and have reviewed the related well information, including recorded declarations of pooled units, and so understand what you are signing.

Texas Comptroller data is sales revenues reported by then-operator and is basis for severance tax. It is useful for comparison to current checks. It is never updated online even if operator realizes original data was wrong. You should collect funds held by Texas in your father’s name. It is too late to dispute most prior-year calculations under statute of limitations.

If there was no production from any well for some period of time, then maybe you should consider whether the old lease has expired. An oil and gas attorney can advise you by reviewing the exact lease provisions regarding lease expiration and the production history.

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Sorry about the late response- I replied to your post weeks ago just realized it was returned-

Okay, thank you once again, @TennisDaze for directly providing answers, and shedding light on the possibilities and options. My budget is thin as rice paper, but the services of a truly independent landman has been very tempting, as I get further into the piles of documents. This began as a simple reconciliation of some holdings that had gone astray, or never been quantified. The fact that as one operator left Plains, another lease we have interests in, has moved their business there has made leading with the benefit of the doubt, foremost for me. Considering none of my emailed or voicemail requests have received replies regarding one lease, while all my questions were answered, calls were returned and information was shared, by another person, in the same organization, reminds me that it is not necessarily endemic, but it’s individuals that reinforce a corporate culture. I’m comfortable sharing explicit details to get some answers, insight and resolution. I was informed that they sometimes work from home, so I’ve kept that in mind, but, I only get a voicemail with an outgoing message advising messages can’t be checked from that location, giving an email as the best way to make contact. I’ve sent multiple emails advising the reason for my call, requesting the information, or at least a few minutes of their time, and have received no response. I’m surely not a major customer, nor do I take it personally, I’ve been on that end of the phone, the messages are there, to respond or not, but it’s a choice.

We’ve collected unclaimed funds from the State Comptroller in the past, though they don’t indicate the lease, just who the entity is that turned over the funds, I can’t recall if it was on this lease but, we’ve got a claim currently pending, with funds from multiple years from Plains Marketing, LP. Oddly enough, some show a previous apt I had in Austin around 2008, then they have one attempting contact roughly the same time to a rental house my dad occupied in Houston, moved out in 1972. Finding the funds on Unclaimed was what tied the funds to this particular DO, which was also issued by Plains Marketing, LP, for the lease which is simply called “S Monahans Queen Unit.” (I’m going to type it verbatim to avoid missing any meaningful discrepancy- I’m not yelling) The DO from 2003 only references that as a description, with the operator back in 2003 as Tx Heat of the Permian Basin, although per Plains, Q- Natural Resources is the current operator. KRF is listed previously, they share addresses with Q. All the operator names, past and present, match what the RRC shows as the lease named, “S Monahans Queen Unit, number 22313”, in the field named “Monahans, South (Queen)”. They are revisiting pretty much the same well sites, which seem to converge in that southwest corner of the section described which is pretty much in downtown Monahans. The complete history with plat maps, showing the lots, drilling results, from about 1972, scanned photocopies in the RRC files. Documents when the lease was formed from the various townsite leases, plat descriptions, the wells as they were drilled, verticals, directionals, exploratory, depths, plugs etc, with the focus of productive activities generally pointing back to the southwest corner of Section 51, in a cluster of activities, focused around a site between Gail Ave and Fay Ave. The DO reads next to “property descr: SEE EXHIBIT 'A”. The attached “exhibit A” lists my dad’s account number, name, my previous apartment address, his ss#, the decimal interest, Type: RI, Effective: 12/01/2002, a “clause 1”. It then explains clause 1, “Our records indicate we have never received your executed division order covering this lease.” (He passed in 2000). It closes with, "Legal description: “SW/4 SEC 51- BLK-N & SEC 60-BLK-A G&MMB&A SURVEY, WARD COUNTY, TEXAS”. That description except for the SW/4 part is used throughout all the documents to describe the S. Monahans Queen Unit lease. It’s an inch thick of printer letter size paper that’s an historical record of the area, as well as the lease, the evolving technologies, recorded in the receipts and reports. It’s “zero miles from the nearest town”, on that proximity to town question on the drilling forms. I’ve looked at wells on other leases through the RRC, wells that I know what I’m looking at, simply to check myself, trying to get a better idea of what I’m missing here, the disconnect that explains the broad brush used on the DO description. Maybe someone’s more seasoned eyes will be able to share that key, if it’s even a thing. The landman, etc, route you mentioned seems like a solid way to obtain definitive answers, though I’m sure they aren’t cheap, but after looking at the quantity of documents, it is quite a task. I do have a specific RRC question though, I found my grandmother’s, and father’s names, and the royalty decimal percentage, listed for several leases, as well as a “valuation” (20 bucks) on RRC. I’m curious again, where those values and percentages came from believe one had the "percentage of royalty listed as well. As I recall, the decimal percentage was a rounded version of what appears on the Plains DO, which suggested to me that it was information from reporting paperwork submitted by the operator and posted by RRC, to document activity? It was late, I thought it was under a mineral section, but I don’t know. Thanks again for all your help and patience, One and all, please any info that might serve is appreciated (I already know I’m long winded and repetitive, but the post usually comes down after 3 months, so relief is in sight) Thanks again, stay safe!

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RRC GIS Viewer shows most wells in Section 51 and Section 60 as being in RRC Oil Lease 08-22313. Looking at RRC scanned images, there have been multiple operators over the years, perhaps starting with Phillips. TX Heat of Permian was in chain of operators and transferred operations to KRF Production Company in July 2018. Then operations were transferred to Q Resources in March 2021. Unit contains 1821.90 acres in Sections 50, 51 and 66, Block N and Sections 60 and 61, Block A. There is a plat from Unit Agreement in RRC files with outline within the sections. Perhaps the reference in DO to SW Section 51 and Section 60 indicates that those are where your family minerals are located. Some operators limit the descriptions this way. You really need to pull your grandmother’s and father’s deeds to see legal descriptions. Still producing. Around 2019, four wells were transferred to RRC Oil Lease 08-52321. Stout Energy Inc was operator and transferred operations to KRF Production in February 2020. Those wells do not seem to be producing.

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Thanks again TennnisDaze, informed fresh eyes are a great help. I know I’ve seen leases between my grandmother and Phillips, I’ll have to go back and pull them for details, but I do have a deed from 1952 that references a very specific area carved out of another "5 acre area on east side of Grand Falls Highway 82, in G&MMB&A Survey, Section 52, Block N Abstract 61, also known as Lot 31, described as follows-

Starting at a point 300 feet in a Southerly direction from the Northwest corner of said Lot 31, said point being the Northwest corner of said lot herein conveyed; thence 100 feet in a Southerly direction, parallel to Grand Falls Highway No 82 to a point in the West line of said Lot 31, being the Southwest corner of the tract conveyed; thence in an Easterly direction 435.6 feet to a point for the Southwest corner of tract conveyed; thence in a Northerly direction 100 feet to a point for the Northwest corner of the tract conveyed; thence in 435.6 feet in a Westerly direction to the point of beginning; towit, the Northwest corner of the tract conveyed herein, being one acre, more or less, out of the tract conveyed by Hutchings Joint Stock Assn to Lucille Maudlin recorded Vol 91, pges 536-39 Deed records Ward County Texas."

This deed happened to be close at hand, there are others less detailed in the fine details, but in using the RRC legend for lengths etc, I guesstimated and iirc there is a tiny rectangle marked out on their map that ballparks this description. It’s not active or drilled but what caught my eye is the reference to “Abstract 61” which is the Abstract that comes up in the area where the drilling activity described earlier occurs. I haven’t worked through exactly which highway Grand Falls 82 has become, nor am I extrapolating the description to broaden or include other areas - it was an exercise in applying the description to the map. There are other deeds and leases in the files that are larger and more general in the descriptions, this one just shows that transition from the Lots as the descriptors to the G&MMB&A designations.

Thanks for confirming also, the RRC lease numbers (only 2 ever referenced - one never had actual activity - the RRC lease #22313 being the active designation for the lease called “S, Monahans Queens Unit” on RRC, yet it isn’t referenced anywhere in the operator’s owner facing paperwork, which made things slightly vague, at least non-exact, for me.

I’ll sit down with the files and refresh what I have downloaded and see what is available, there was a lot of information to peruse, it got a little pricey as some wasn’t applicable, but I couldn’t tell until I’d paid for it and could see more than the blurred preview posted by the county, plus the subscription price that came up after the first 5 were downloaded, etc.

Thanks again for all your help - it’s a busy time of year, thanks for taking the time I do appreciate it!

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Ward County has switched to a service which is expensive and difficult to use for research. Try Texasfile instead. You can pay $2 to clearly read a non-blurred document regardless of length. Or just buy for $1 per page.

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Good afternoon, how can I contact you regarding Q Natural Resources LLC?