I have mineral only property in Lea Co., NM that is currently leased. Anyone know what documents/wording is needed to correctly effect the transfer of a fractional interest to a buyer?
The Mineral Deed from me to the buyer is fairly straight forward, simply deed a fraction of my interest to them. But then, since that new deed will be of record (and my old one), do I need to also make a new deed that essentially deeds my remaining (retained) fractional interest from me to myself so then there are now a record of that, ie two new deeds showing the new fractional interests to my previous interest?
Also, what type of form is used to transfer a fractional interest in an O & G lease?
Any insights are appreciated.
I think Lea files mineral ownership by quarter section. if so, express the net mineral acres transferred / acres in quarter section. i.e. 20/160 or 10/158.67. in an identical fashion to the existing deed so there is no mistake as to what share is being transferred. Since you have a lease, that will also be specified in the deed along with the effective date.
If the buyer wants rights to royalties earned prior to the effective date, strike that clause. Here is why: Lea is in the Delaware basin where very prolific oil deposits are being exploited with very expensive wells. Many times land agents will offer to buy minerals from the "owner" in parcels where very good wells have been drilled and competed on land that the seller doesn't know about. Many times these deals are couched as mineral purchases when in fact they are sales of slam dunk prolific royalty rights. You may be in that position since you have already committed all of your mineral rights under the lease and are left with only a royalty right. Read Bobby Grace on Mineral Rights Forum. Law suits abound over this practice.
Also, don't warrant prior to your inheritance. Who knows?
If you don't know what producing units your land is in, you best find out before it is too late. You may be getting less in a sale than what has been earned but not paid under your lease.
Personally, I wouldn't sign a deed for minerals in the Permian Basin without a mineral attorney or mineral title attorney looking at it and knowing what is going on with the property. It may be the most prolific oil development area in the USA right now. If you are not absolutely sure of what you are doing in Lea, better get some help.