The location of my mineral interest in Kingfisher Co, OK – SE/4 OF NE/4 AND LOT 1 OF SECTION 4, T17N, R5, WIM SURVEY
After the closing of this unresolved topic in sept 2020, I retained the services of a landman who obtained a copy of the original 1965 lease for S4 T17N R5W and have shared this with the MACH Resources Division Order/ Landman handling my request to quit making unauthorized deductions from my royalties. Mach responded basically saying NO while asking for more documents from me!
The wells are not in a unit but are a product of the Alta Vista and Energy Acquisitions Bankruptcy sale to Mach. My submittal of my lease documents have generated only a refusal by Mach to recognize the dictate of the 1965 lease while asking for more documents to prove my claim. I would think that since my lease started the development of this property, there would be no other document that would be superior to it. I can personally trace the ownership on my end from the 1965 lease signer (my grandmother) to today.
Mach is referencing my interest as a Blanchard Interest which is evidently being used as the basis for being superior to the initial lease document, although the production from the original lease is what has “held by production” the property over the years.
The initial well completed in 1966 continues to be in production and is now in one of the North Lincoln Units. Payments from that holding lease are accurate and do not have any of the new deducts from Mach.
I have only about $300 annual “unauthorized” deducts which is not enough to get lawyers involved, but do I have to just shut up and go away without there being any recourse? What do others do in my situation?
Did your original lease have a “gross” language in the royalty clause wording? Do you only have one lease?
Did you have a depth clause? -probably not at that date.
Did the original well end up in the Lincoln north Unit? What is the name of it? I need to check which horizon it is in versus the other wells you are talking about.
Are you talking about the new horizontal wells that are having production costs taken out?
Do you have the unitization paperwork for the Lincoln North Unit?
Thanks for your interest and your questions – There is only 1 lease. The wording in the lease seems to be very explicit, as I have extracted from the lease document below.
For Oil – “To deliver to the credit of the lessor free of cost, in the pipe line to which he may connect his wells, the equal 1/8 part of all oil produced and saved from the leased premises”
For Gas – “To pay lessor for gas of whatever nature or kind produced and sold or used off the premises, or used in the manufacture of any products therefrom, 1/8 at the market price at the well for the gas sold, used off the premises , or in the manufacture of products therefrom—”
For Condensate – “To pay lessor for gas produced from any oil well and used off premises, or for the manufacture of casing-head gasoline or dry commercial gas, 1/8 of the proceeds at the mouth of the well, at the prevailing market rate for the gas --”
There is no depth clause.
The original well drilled by Kirkpatrick and completed 5/20/66 was brought into the North Lincoln Unit through Texaco’s application (order 119269, Feb 1976). The original Smith 1 became L.N.U.86-1.
I have a download of the 71 page Lincoln North Unit’s formation documents which is published on line. My layman’s reading tells me the unit is not in the same zone as in now referenced in the newer Horizontal wells. However, I do not see where the terms of my original lease have been changed which allows the Mach deductions on new wells. The deductions are only coming from Mach and the horizontals.
I may have to dig into this a bit further. I am not an attorney, so cannot comment on the law. I also have acreage in this unit, so need to go pull my files, read my lease and see what is happening with my portion of those deeper wells and PPC deductions. Also having trouble with BCE-Mach on getting statements to match my deposits which is another issue. Hmmmm. You have me curious now!
I am assuming you are just a regular mineral owner and not a working interest owner as that would make a difference.
I need to add one point after scanning the Blanchard Decision.
Blanchard appears to me to pertain to the basic allocation of royalty percentages within a unit.
My participation in the North Lincoln Unit has never triggered the additional deducts that are being taken by MACH. I have made this point to the Mach rep without any response other than Mach’s request to “provide additional info”
You are correct with your assumption, I am a plain Jane mineral interest owner. M_Barnes stated on this web site several years ago that she would not recommend pursuit of working interest because of the downside of potential long term liabilities. I followed that counsel and couldn’t be happier, thank you!