I am POA for my elderly mother. She owns very small lot in Orange County CA, which is encumbered by an oil pump/equipment and subject to a unitized royalty agreement. We live in another part of the state, so have visited the site only a few times over the years.
We want the oil company and all of their equipment off our property!!!
There are several issues:
Mom shared land and mineral rights with her aunt, until aunt died in mid-1990's. Mom then inherited her aunt's share. But oil company has continued to pay mom only 1/2 interest. Oil Co. says they don't know where the other 1/2 is going, but that there is nothing in their records to indicate it belongs to my mother. I have twice submitted title information, death certs, wills, etc., even payment stubs from before aunt’s death showing both ladies each getting one half share in same pay period. Oil Co. representatives ask for the information, but after I submit my proof, they shut down communications with me.
Having read and re-read the original lease from 1929 and the unitized agreement (1970) I am not certain mom is being paid correct percentage. Plus it seems she is being paid only on what one oil company is pulling out of the ground, not what is coming from entire unitized area, which is vast and has numerous companies involved.
Before entering the unitized agreement in 1970, my mother and her aunt made a decent amount of money in royalties. They did not want to enter into the agreement but essentially were told if they did not, they would get nothing. At that time, the royalties were a significant part of elderly aunt’s income. Having that ripped away was not an option. However, as their lot is small (7,000+ sq ft), their unit participation was minimal. During the first phase of the agreement, which lasted a year or so, they did okay (though certainly a lot less than before the agreement). But, once in the secondary phase, the royalties plummeted. They went from each earning around $450 a month to $16.
What is particularly sickening is, according to Dept of Oil & Gas records, there were years where that little pump on my mom’s property was producing 3-5% of what was being drawn from the entire dome unit, which is a vast area.
Mom's parcel is located adjacent to other empty parcels, on a major thoroughfare and surrounded by apartment complexes. A few years ago a developer contacted mom and made a very low offer on her lot. They were planning to build an apartment complex. We countered their offer and they never got back to us. Subsequently, we learned they are in partnership with Oil Co. They dismantled several pumps and moved some oil related infrastructure to mom’s lot (thus rendering her lot completely unusable, unsellable, un-leasable) and built an enormous apartment complex adjacent to her property.
During the building process, Oil Co. or developer surrounded my mom’s lot and an adjacent empty lot with a 10 foot, barbed wire topped, privacy cyclone fence. On a visit to the property a couple of years ago, an oil company employee approached me, advised that I was not allowed onto the property without first getting “permission” and waited for me to leave before he also drove away. This is my mother's property!
They were also dismantling the pump on my mom’s property. I don’t know if they are replacing it, burying it, or what! But, as I mentioned, in addition to the pump, other oil related appurtenances encumber the lot, most of which were relocated there when the apartment complex was built. According to the Dept of Oil & Gas database, they have not pumped anything from that well for more than six months.
I had an attorney helping us on contingency. But he could get nowhere with Oil Co. stonewalling our every move. He finally, and understandably, gave up. He was successful, however in getting the Oil Co. to make regular royalty payments to my mom (albeit only half of what they should be paying). Before attorney’s help, they would go years without paying. I would have to contact them, rattle their cage, then they would send a check. This had to be repeated 3-4 times over the course of about 10 years.
The original 1929 lease has the following language:
The Lessee shall hold said lands with the appurtenances, for a period of twenty (20) years from the date hereof, and unless otherwise surrendered or forfeited by the Lessee, so long thereafter (not exceeding 50 years in the aggregate) as the Lessee in good faith shall conduct drilling operations thereon as herein provided and/or as long as oil and/or gas or kindred substances are produced in quantities sufficient to pay Lessee to pump the same; and the Lessee hereby leases from the Lessor the within described lands for the purposes, and upon the conditions and considerations and with the rights within set forth.
Doesn’t the parenthetical “not exceeding 50 years in the aggregate” mean the 1929 lease was invalid after 1979?
If anybody has advice, I would greatly appreciate it.