Hello Some relatives have discovered they own mineral rights in Union when contacted by a local landmen and sent leases to sign. None of the family want to be involved and want to sell. We are not in ARK, how do we go about doing this? They want to dig the well this summer. There are 40 heirs, of which we are 3, and the other 3 in our line have not returned the leases and probably won’t and I have no way to contact them. Landmen says they have 24 signed leases in. It’s a 40 acre parcel of land, they are putting up one well. Other option is our 3 people assign rights to me, and I stick it out to see what happens. Either way, I don’t know how to proceed. Do we need a local lawyer? if so, any recs? And if we sell, what is a reasonable price per heir to sell their share? Thank you.
Welcome to the oil and gas business and to the forum.
First, find out who you inherited from-the landman has done the research, so ask. Was a will probated? You could not sell or get royalties without clear title.
Second, get the exact description of the acres from the landman. Ask about the timing of the well.
Third, most first drafts of a lease are not in the favor of the mineral owner, so will need to be negotiated to get better clauses and terms.
Fourth, you probably will need an attorney to negotiate the better terms and to make sure your title is clear.
Fifth, find out what kind of well they are going to drill-conventional vertical hole (gas or oil) or a horizontal well. The royalties can be substantially different depending upon the kind of well.
Sixth, I cannot answer the sale price. Most offers that I have gotten were usually less than what the minerals were really worth. I had data to back that sentence up.
Seventh-find out who the operator is, what formation the well is going to be drilled to and when they plan to drill.
Eighth, find out what activity is going on around you. I might not want to sell if I knew there were many wells planned and drilling all around me.
Ninth, it is wise to get as much information as possible before making a decision.
Thank you for your reply.
I have a copy of our mineral rights deed from 1939. We are the heirs. It contains the exact description.
Quanico oil is digging for oil. The CEO actually owns surface property on part of the land, but not mineral rights, I was thinking of offering to him. It is for sure oil. Quanico has not dug in this area, they have 20 miles out and have had success.
The Directories tab above has listings of attorneys. If they are not licensed in Arkansas, you might ask for recommendations. You can also contact the National Association of Royalty owners which has an Arkansas chapter. They may be able to point you toward someone who can help with probate and lease issues. www.naro-us.org is the website. I think Terrell Shields is the current president.