Title, Shares, Leases-what do I do now?

[Brennan]

I want to thank Martha, Richard, Tim and Pete in the past for their help on this in the past. Here is the thread:

Grady County - Continuation of Previous Thread

I’m following up on the link Ownership of a Share, Others Unknown Which is no longer accepting replies. A couple of more questions: How do I send an affidavit of updated contact info to Grady County (is there a standard format and does it need to be notarized)? Also, how do I find out if there are any royalties due (I doubt it) or recent activity?

I have done some research and have all the information now, and I would like to do something with these mineral rights.

I own, it seems, 1/7 interest in the following: Lot 5; and the East Half (E/2) of Lot 6; and the North Half of the Southeast Quarter of Northeast Quarter (N/2 SE/4 NE/4); and the North Half of Southwest Quarter of Northeast Quarter (N/2 SW/4 NE/4) in Section 1, Township 4 North, Range 8 West of the Indian Meridian, Grady County, Oklahoma (as stated on deed) 71.85 acres, more or less.

There’s a lot to this. I found the deed, so that’s not an issue. As to the others who own the 6/7 shares, I have found some of them on the county records site. Is it possible that they are selling leases without the permission/participation of all the owners? Several leases have been done since I inherited the rights in 1994.

How do I find out if there’s any production? And if the lease was signed without me, am I owed anything?

One question I have is if it is still $18 to file a document with the Grady County Hall of Records? I need to get my current address into their system. Another is if some of the partial owners can lease on their own without including the others (including me) in the lease.

My step-grandfather left me these rights, and the heirs of his siblings own the other shares. I don’t think they know I exist or that I’m out here with 1/7 of the rights (I never knew any of this family) but I found the trail of ownership through the Grady County recorder’s website.

As I’m now 64 and have no heirs, I would just as soon sell these rights since they don’t seem to produce any revenue. How would I go about that?

Any help is appreciated. I know nothing about mineral rights. My grandfather made a big deal about leaving them to me, but so far they’ve been practically worthless.

[Jimmy]

Google pecan tree website and spend the 39 dollars and at least you can know what they are worth! I am in the same situation! More will chime in! Good luck.

[Richard_Winblad]

@Brennan

Is it possible that they are selling leases without the permission/participation of all the owners?

Yes, in fact it is very likely. An owner of a partial interest can lease his/her portion without impacting the remainder owners to lease or refuse to lease.

It is a good idea to have your contact information filed with Grady County. You can also reach out to the companies leasing in the area if there are active leases.

This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.

[Brennan]

I understand. But if the lease led to production, then wouldn’t all the owners be entitled to royalties?

[TODD_M_Baker]

Yes they would. I find no production on this Section. If there was production, they can only pay the owners that they are able to locate and that have merchantable title. That is why Richard says to make sure your correct contact information is filed with the Grady County Clerk’s office. Recording fees are $18.00 for the 1st page and $2.00 for each additional page.

[M_Barnes]

The last lease in 1-4N-8W was by Todco Properties in 2022. They are an agent who leases for operators.

Geologically speaking your acreage sits on the East side of a very well known fault structure known as the Chickasha anticline. The structure along the anticline has been producing for a very long time in the shallow conventional reservoirs. Your section is on the under thrust area of the anticline. Here is a picture from Molly Turko’s Dissertation in 2019. Note the red cross section labeled “1”. Your acreage lies just about where section 2 crosses the line. Somewhat near where well 4 (Duke 1-35) is positioned. The west side of section 1 has had production a while back, but the east side has not. If someone is interested in that deep part of the underthrust, they may lease, but with gas prices where they are right now, they may wait for them to go up.

[Richard_Winblad]

I understand. But if the lease led to production, then wouldn’t all the owners be entitled to royalties?

You would not be bound by leases signed by others. There is a legal process called forced pooling for mineral owners who cannot be found, refuse to lease or are unable to lease because of a capacity issue.

Matt Sands has a podcast describing how that works here: https://youtu.be/mmNz9RFKFUM

This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.

[Brennan]

Thank you to everybody. I am much clearer than before but I still have a couple of questions and want to confirm I understood things correctly.

I have sent a notarized affidavit of change of address to the Grady County Clerk.

It seems confirmed there is no production going on in my area, which dashes any hopes of any money, but I’m glad to know and stop worrying about it.

If there were production on a lease signed by another owner, I would still be entitled to royalties, correct?

One question is can there be more than one lease on the same area? There is apparently a lease in effect signed by another owner (there are at least 7). If someone approached me for a lease before that one expires, could I sign it?

Martha, I appreciate your information about the geology of my area. It sounds like if anyone ever actually drills there, it will be in several years (and given the politics of climate change and oil these days, maybe never).

As I said previously, I’m 64 and have no heirs at all, none, so I would just as soon find a way to convert this into cash, now or in a few years. How does one go about selling mineral rights? Does the fact that there does appear to be oil there, just too deep, help the value? I won’t ask about value because I don’t want to put anyone in that position. I’ve read Martha’s comments about that.

Thanks again to all. I hope you can help with my last few details. Without you, I don’t know what I would have done.

[M_Barnes]

No production now does not condemn production for the future here. Gas prices are very low right now, but expected to go up in the next two years, so drilling for gas has slowed down for a bit in that area. If the older leases were not drilled by the end of their primary term, then they will expire.

There can be hundreds of owners in a section. Each of them can lease their own acreage. You would either need to lease or be force pooled in order to get royalties. Forced pooling has its own benefits. All acreage for a well will be accounted for. The folks that cannot be found or refuse to lease will be offered forced pooling. Those that cannot be found will have their pooling bonus money held in a special fund for them or their heirs.

If you want to sell, you can use an agent or any number of auction houses. They will take a commission out of your proceeds. With no activity right now, the prices will be “low”. Or you can wait a few years and see if activity picks up. Then the offers will come to you and perhaps be higher and not have a commission on them. Or you might want the royalties from a well.