In May and June small invoices for oil rig maintenance began appearing to our father’s estate c/o our mother. This caught our attention because no one living in the family even knew that our father had inherited a small fraction of some mineral rights from his mother. Both Mom and Dad and their siblings had passed away years ago. What do these invoices mean? Could a oil well company have forced our family to become participating oil leasers? We poked around and discovered that the mineral rights are located near Jal, NM, in Lea County which is a pretty hot area. The invoices led us to the name of the senior division order analyst for the lease company. He seemed like a really nice man and offered us $2000 in royalties even though we have no legal paperwork stating that we are the heirs of these mineral rights. Of course, it is intriguing to receive a check out of the blue but are we playing with fire here? Should we even accept the money? It is certainly not enough money to hire a lawyer for advice. Should we ignore/destroy both the invoices and any checks that arrive? We are considering using the $2000 to hire a landman to delve in to this matter more deeply. In the back of my mind there is a warning sign: the senior division analyst is working on half of the oil company’s behalf and not necessarily in our best interest. Although he seemed incredibly nice by phone I can’t help but feel cynical about all of this. Your thoughts?
If he is offering that much, I’d get in touch with a lawyer. Your instinct is probably spot on.
Do not ignore this situation. It appears that your father’s minerals are not leased. NM has forced pooling which means that the minerals would become a WI unit the pooling order. As you will not have participated in the drilling, the pooling order will set payout requirements. Once payout is reached, then you will receive your share of revenues and owe your share of well costs. You should ask for information in writing about the well(s), payout, revenues, net minerals, etc. to be able to make informed decisions. You also need to clear the title out of your father and into his heirs. If you post more information about the well, operator, legal description of the minerals, you can get some guidance on finding the NM pooling order and other well information.
Thanks so much for your advice. For now all we know is that the wells are part of the Cardinal Unit in an area west of Jal, New Mexico, in Lea County. We are dealing with two operators: FME and COG. The tracs are in township 25 35 E. The wells operated by COG have the name of Montera. So far three have been drilled and there are some more spuds. I will request more info from these two operators as advised before cashing any check.
How many acres are involved? It sounds like a lot. New Mexico State just sold some of their minerals at auction for $95,000/net mineral acre. Don’t sell yourself short!
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