family inherited a deed reading: An undivided 1/20th interest in to a one-half 1/2 interest in the oil mineral rights in and to the following described situated in Reeves County, Texas.
Block C-6, Sections, 13, 14, 20, 21, 22, 23, 28, 29, containing 5,162 acres, more or less.
Question: In layman's language, what does this mean?
Hi Arnold!
I would have to see the entire document to make sure, but an undivided 1/20th of an undivided 1/2 interest would equal an undivided 1/40th of the mineral rights in and to 5,162 acres, more or less.
That would be 129.05 net mineral acres in the 5,162 gross mineral acres. 129.05 / 5,162 = 1/40.
You own 1/40th of the mineral interest in about 10 square miles of land in one of the most active and productive Counties in the country. If the lands are located in the right place, you could be quite wealthy.
I will be happy to look the lands up and send you a map of what is going on in and around them, but it will have to be after lunch.
Since you have posted the legal descriptions, you may be getting offers to buy your interests. I advise that you do not do so, but if you are inclined to do so, I suggest that you move very cautiously until you are much more knowledgeable about what is happening in your area. Acreage in some areas of Reeves County can go for over $10,000 per net mineral acre. In some places substantially more.
Will look your area up and send you what I find this afternoon. Accept my invitation to become "A Friend" on The Forum and I can send it to you confidentially.
Hope this helps -
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
Thank you, wife and I are new at this and don't understand the legal language. I will try to upload more info.
Hi Charles, I too have received an offer from a mineral rights procuring company (a middle man or type of wholesale entity). I have been told by someone who is familiar with the activity in Reeves County regarding successful "hits" that this means of procuring mineral rights is common. Upon receiving my letter with offers to lease or purchase from the company, I began conducting as much research on my own as I can. I have learned that the offer/s are very low and one might say even disgraceful!
I have many questions and have even thought of going to Reeves County to see if I can get my questions answered face to face with someone there. I keep getting told by the County Clerk and Appraiser's office that I need to contact a third party contracted with the county to get my answers. I have done so, but am still not getting my answers.
Questions:
(1) How has it been determined what portion of a rather large tract of land in the county is mine? My calculations show that I own more than what this company has determined.
(2) How was the value placed on this property to determine what it thinks is a fair offer? I asked the representative this. He told me he would have to ask someone else in the company. I asked to speak with that person. The representative said he would contact them and get the "math" to me. I understand from one source that the offer is far, far below fair.
(3) How do I get at copy of the tract/plot of land in question? It is large surface property. I own a small portion of it, however, from what I am learning, even a few mineral acres there is often quite valuable. I have the legal description, but have not found a source that allows a successful upload, find, etc. of it. I know that it is in the Alpine High area of Reeves County and also have a document from a previous lease by Shell Oil in 1960-1967, describing it in an area called Jaguar.
I have a good bit of info, but am at a standstill with direction for moving forward. I have learned the area is "hitting" now and the county is one of the busiest, if not the busiest in the state and even the US.
Any comments you can offer will be much, much appreciated!
Ann
Here you go!
551-GEORGEJKANAVUTSINTERESTSWELLSMAP20170209.pdf (94.4 KB) 552-GEORGEJKANAVUTSINTERESTSWELLTABLE20170209.pdf (473 KB)Hi Ann -
The County Offices are not allowed to answer the types of questions you have or to offer legal advice. They are not Attorneys and the Counties' Employees are not allowed to put the County in any position of possible liability.
"Jaguar" was probably the Shell Oil Company Prospect Name. If so, that wouldn't have anything to do with your interests.
If you will send me your legal description I will see if I can map your lands out for you and tell you what is going on out there. Please accept my offer to become "A Friend" on The Forum. You can send it to me privately that way.
As far as Sales or Purchase Prices go, buying low and selling high is one of the founding principals of our nation. You, as the potential Seller, need to educate and protect yourself - which appears to be what you are doing. Smart Girl.
If there are producing Wells on the property, then there are various ways to come up with a purchase price. You can have an expensive Reserve Study prepared by a Petroleum Engineer (or one mutually agreed upon between you and any potential Buyer), but many people consider that trying to sell oil still in the ground.
The simplest way that I am familiar with is to take the average of the most recent 3 month's worth of royalty checks and multiply that by from between 36 months (3 years) to 60 months (5 years). The difference being based on the projected future or remaining life of the Well(s).
If there are no producing Wells on the land, then the sales or purchase price is whatever you can get someone to pay you for it. There is no magical mathematical formula to rely upon to come up with a purchase price. Some people will use "3 times the last leasing Bonus Payment" as an offer, but I don't especially agree with that.
To some degree you may be able to use production and royalty figures from nearby Wells, but even that will be only so accurate.
Send me your legal description and let's see what's going on in your area first.
On their calculations vs. your calculations, it may be that they are adjusting your Interests by the amount of Royalty reserved in the Oil and Gas Lease(s) presently on the subject lands.
If you own a Non-Participating Royalty, whoever signs the lease(s) does not typically have the right to pool your interests. There would have to be some seriously worded provisions in your Source Royalty Deed or Reservation for the Lessor to have the right to pool your interests.
If the present day lease(s) on the subject lands reserves a 1/4 royalty, they may be adjusting your calculated interests by that 1/4. I will see if I can locate a copy or copies of the current leases on the lands involved. In the meantime, see if when you multiply their figures by 1/4 or 1/5 or 1/6 or whatever you get your calculated estimate.