I have obtained quite an education from this board, from a newbie dummy to someone that almost understands some stuff. One that still confuses me is NMA and how it is calculated. For instance i have leased in Lea County New Mexico Township 25S, Range 36 East-Section 7, S2 SE 4 and Section 18 N2 NE4. Lease states that is .66666 net mineral acres with 1/5th royalty and called 160 acres, more or less. I have no idea based on those facts if that is correct or not, how do I determine if it is?
The leases often state the original gross acreage of the parcel. In your case, 160 acres. The .66666 net mineral acres is what they determined from a title search. If you are very nice to them, you can sometimes ask for a copy of the title opinion paragraph that pertains to your acreage amount. They will not give the whole title opinion as it is very expensive to obtain and is confidential. If you do not have good records from your family, tell them that you are trying to update your family records and need the complete title chain in order to finish.
For example, great great grandpa may have had eight children, so split up his original 160 acres into 20 acre sets, then the next generation split, then the next generation split and you ended up with the .66666 acres. You would like to have all those names and who gave what to whom. Occasionally, there are errors, so good to collect as much information as you can and pass it on to your heirs.
OK, thanks. I still would like to know how it was figured, there was never any mention of the interests in probate or wills. I am going to try to get a copy just for self satisfaction that it is right. The original owner willed it to my wifes father, then to my wife, then to my daughter. The original split is crazy, according to wifes father, he and his sister got the ranch and the wells. They swapped, he took all of the wells and gave her his part of the ranch.
Don, net mineral acres (NMA) are the gross tract acres multiplied by your interest percentage or decimal ownership. If, say, you own 50% (.50) interest in 100 acres, you own 50 NMA out of the 100 acre tract. The caculation is .5 (your interest decimal) X 100 (gross tract acres) = 50 NMA.
Let’s presume you have a sibling who receives the remaining 50% of the minerals owned in the 100 acre tract. Let’s also assume when your parents purchased the property that they received 100% of the mineral interest in the 100 acres.
Undivided interest simply means the acreage has not been severed. In the aforementioned example, let’s say you acquired your interest in the 100 acre tract from your parents upon their death and the vesting instrument (perhaps the Last Will and Testament) stated something to the effect that you and your sibling are entitled to 100% of the residuary estate to share and share alike (in this case, you share with your sibling 100 undivided gross mineral acres). It can also state something to the effect that you receive 50% undivided interest and your sibling receives 50% undivided interest. You each still own 50 NMA in the 100 acre tract but the minerals owned are not location-specific. In other words, it doesn’t matter whether a potential operator wants to drill in the east half of the 100 acres or the west half of the same. You and your sibling would each own 50% of the minerals produced.
If, on the other hand, the Last Will and Testament or vesting document stated that you recieved the west half of the 100 acres and your sibling gets the east half, then the minerals are now severed and not considered undivided. They are, in fact, divided minerals. Your ownership percentage would then be 100% of the west half (50 acres) tract, not 50% of the larger 100 acre tract. Clear as mud? Hope this helps a little.
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Chris Smith and Martha Barnes have provided excellent answers to your question. To help you “cut to the chase”, so-to-speak, there is a short-cut way for you to find out what your share of mineral rights is in the 160-acre tract using the information the oil company gave you.
Divide the 0.666666 NMA by the 160 acres: 0.666666 / 160 = 0.004166667.
The decimal 0.004166667 is the same as the fraction 1/240. That means you have a 1/240th mineral interest share in the 160-acre tract. To verify the math, multiply 0.004166667 X 160 = 0.666666. Then divide 1 by 240, then multiply by the 160 acres: 1/240 x 160 = 0.666666 NMA.
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But Chris, now each sibling owns an undivided interest in their “new” tract. That should clear things up. LOL
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Thank each of you for the explanations, it is clear now what it means and how it is calculated. I can see that I need somehow to go back to the original split and the first transfer to see if it was correct. The second and third I have the paperwork on and was personally involved. These interests were originally given as a part ownership to our ancestor who had some sort of reputation for locating where to drill to find oil back in the 1920 time frame. Does anyone have any general information as to what percentages that person would have been granted? There was some in fighting over the interests as well as some crooked stuff going on, hence my interest in finding out if it all got done correctly.
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