Questions about Mineral Rights

My father has owned mineral rights since the 70s. He has recently gone to a nursing home and is in poor health. He wants to possibly sell to pay for his care. He is a poor historian so my sister and I are working on it. We know what he has according to the deeds from Carter County records. He has several offers but we are sure what is legitimate. Hoping anyone can point me in the right direction. I have tried to contact attorneys but no luck. So here are my questions!! From what I can tell, he has the following sites. He has leased to Citation and Sunoco and has 1/8 interest.

04-2S-3W 05-2S-3W 17-2S-3W 23-1S-3W 32-1S-3W

  1. Does anyone know if any other companies are drilling here?
  2. What are they worth-the offers are very different?
  3. How can we tell a legitimate offer? 4.The net acreage is different on each offer-how can I verify? one says 37.7and another says 70
  4. How long will the wells produce?

Thanks for the help-we just don’t want him to give away or be taken advantage of.

Activity wise there are a number of wells as you can see in the map. Some are producing, some are inactive and some are DUCs (drilled uncompleted wells). A DUC is a well that has been drilled but not yet completed, which is the finally state before it starts to produce. Once completed, oil/gas flows and payments start a few months later.

Companies include Citation but mostly Continental Resources.

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We had a similar situation a couple years ago. Could not get any attorney to respond. Hired Kyle Nevels of Penterra Services in Oklahoma City. He did the research on ownership and opinion on worth. Got a nice written report. Good luck

Thanks so much. Was it expensive?

Thank you. Should he be receiving checks from companies in his sections? He has several division orders from Continental and Echo Energy. We don’t understand what this means.

04-2S-3W Pevehouse 1-4H. Drilled 1996. Continental is Operator. This well has decades left to produce but at low levels. Possibility for future wells.

05-2S-3W Alexrod 1-8-5XHW drilled in 2020 Continental is operator. Potential for future wells. Well came online in July 2021. Should have a first check for six months of production about December or January. Well has decades left of life, but the majority of value is in the first four years.

17-2S-3W -possibility for future horizontal drilling. Horizontal well was planned. Operator changes and Covid delay. Continental is new operator.

23-1S-3W -possibility for future drilling 32-1S-3W-Katz 1-32-29XHW permit in July 2021. Just spud, so currently drilling. Continental is the operator. Also possibility of more wells.

Your dad may have some shallow production royalties from some water floods.
Find out what he is currently getting in shallow royalties.
Continental is currently developing a deeper play, so I wouldn’t sell if I didn’t have to. Your dad’s acreage is in a pretty good place and he has pending cash coming in very soon.

You need to find out how many actual net acres he has in each section because each one will have a different value. Does he have any old paperwork such as division orders? You can call Continental and find out about the ones that have horizontal wells right now.

My personal opinion is that most offers in that area are below the future pending value. I have had my wells in that area appraised and the offers I have been getting are taking into account that the ones buying know there are future potential wells (as I also know), but they are not paying for that value and they intend to make a profit.

You probably need to talk to an accountant because if he sells, he may have capital gains due to the step up value of the sale or other taxes. Also if he is on government assistance, that is a whole different ballgame and requires an elder care attorney to give advice because a sale can really affect benefits. There will be a check coming in soon, so that could help with expenses. You are wise to take some time to figure out all the pros and cons of selling all, selling part, or selling none! You have many options. Thank you for taking good care of your dad!

If your dad recently moved to a new location, you need to contact the operator of each well (Continental for the new wells, I can help you with the older wells) and let them know his new address or they can’t pay him. The Division Order doesn’t have to be signed in OK in order to be paid, but you probably don’t want them taking out federal taxes, so I usually sign a Division Order and keep a copy and send by certified mail return receipt.

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Thanks you so much! Can you point me to someone I can hire to find out all this?!

You can observe qualified professionals (often with localized expertise) who provide services to mineral owners right here on The Mineral Rights Forum. You will notice them among 3 different instances on the site:

  • in display image ads and/or brief text messaging on site

  • in our Mineral Service Provider Directory in the main navigation above. These are arranged by professional discipline.

  • as a Business Member participating in many conversations throughout the site (note the blue colored “B” on their picture and blue text on their posts).

These practitioners are often able to provide the specific (and often localized) services that meet your needs.

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You can actually do most of it yourself for free before you hire someone. Is your dad able to communicate with you? Do you have access to his recent receipts? There are many free sites where you can find out most of the information.

Thanks. I did not understand that some of my questions were not appropriate for the site. Sorry. New here!!

Actually, the administrator is pointing you toward the Directories site at the top of the page. There are some vetted attorneys listed there.

He is in and out. We have some division orders that are recent from Continental and Echo. He currently receives checks from Citation and Sunoco. That’s about all he can tell us. I have been researching but then just hit dead ends. I have 3 people pestering me to sell that he talked to before he started with the dementia symptoms.

We did an address change for him but not sure if these companies have received.

Make sure the correct address & contact information is of record against your properties in the county clerk’s office.

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