The McCamey Unit was formed in 1996. My grandmother received documents to join the unit from the operator. Upon further review by the attorneys doing the title opinions, discovered my grandmother wasn't the county recorded owner of the royalty interest previously thought. I learned this in 2006 when my mother passed away.
I tried contacting all the Operators, which they basically didn't give me any help. I recently discovered my grandfather's will was not recorded in Upton County to transfer ownership of any royalty interest he had to his surviving wife. I'm in the process of getting his documents recorded in Upton County.
I have a few questions regarding this situation.
1, Did the Operator, forming the Unit, have a due diligence responsibility to notify my grandmother she wasn't the legal owner of the said royalty interest??
2. When the title opinions were done, do they have to attempt to notify the rightful owner of the royalty interest??
3. I assume that since my grandfather didn't agree(had already passed away) to join the Unit, we have lost the right to the royalty interest not paid out since the formation of the unit. Is that correct??
I believe that, at least in Texas, a Probate can be filed where the Decedent (1) lived, (2) died, or (3) owned property. So just because your grandfather's Will was not probated in Upton County does not mean that it was never filed at all, it could have been filed in another county. If the Probate was filed in another county and he has property in Upton County, you can file a "Certified Copy of Probate" in the Upton County Clerk's Office. To answer your questions:
1. I would argue that the Operator has a due diligence responsibility to determine who all the mineral and royalty owners are in the drilling unit, but has no responsibility to notify your grandmother if they determined she was no longer in the unit. Of course, common courtesy was dictate that they do.
2. Yes, of course they have to notify the right owners of the royalties if there is successful production, because those persons have to be paid!
3. First of all, your grandfather never had a choice about whether to join the unit or not. Once his mineral interest was leased, assuming that it had a pooling clause, it is up to the Operator to determine how to construct the drilling unit, and which tracts of land to include in it. Assuming that the Operator is acting in a responsible manner, your assumption is incorrect, any royalties due to him must be paid to him or, if he is deceased, to his rightful heirs or heirs-at-law. If the Operator cannot or will not determine who those heirs are, they are obligated to suspend payments and hold them in escrow for these heirs, and after a sufficient amount of time has passed turn those payments over to the State Unclaimed Property Section of the Texas Comptroller's Office.