I receive offers to sell frequently, some with some impressive numbers. It appears to me that people are only buying leases. Can someone please explain the process. What are they actually buying? All the rights? Just that lease? What about unleased sections? I have pieces all over Martin County Texas and really want to know more about what I actually have. Everyone is talking acres but I get different acres from different people. Some of leases were signed in 1970. Can you renegotiate them? How do I determine what I actually own? I have the deed from 1996 when I inherited them. Any help would be appreciated.
Thank you
Hi Carolyn. Basically, when selling minerals you are selling your ownership in all of the oil, gas, and/or other minerals in the ground under your tract of ownership. Mineral rights are most often perpetual property rights (at least in Texas) but can be for some limited period of time if they were conveyed that way in the past. On the other hand, an oil and gas lease is only a contract between a mineral owner and oil company allowing the oil company to extract said mineral owner's property out of the ground in exchange for a bonus paid upfront at signing and royalty on production if it occurs. Leases are most often limited in duration but nearly always remain effective as long as production continues on the tract. They are not renegotiable unless production ceases for a period of time adequate to terminate the old lease and make your minerals open for a new lease again. If you own unleased minerals in Martin County they are likely still very valuable as there is a lot of oil and gas under those sections. Many buyers still want to buy those assets in the ground even though there isn't any income at this time.
People talking about different net acreage numbers in your sections is likely due to quick calculations they've done from appraisal district data and/or what deed records they've found so far. If you were to sell some or all of the mineral rights you would definitely want to get a professional report of your ownership before closing.
Everything above is general for simplicity and brevity, but I hope provides a good top-level overview. I invite others to add anything I've omitted and make any corrections.
How do you get a report? I have been told that in Oklahoma there is an office that assists people with mineral rights. Does Texas have anything like that? Will a report tell me if my interest is leased?
Part of my issue is this, I have a lease and a well on a piece that says NW4 but how do I find out if I actually own interest on the entire section but the lease is only for NW4 but my interest is in the entire section? Is that possible?
Yes, that certainly is possible. I'm not aware of an office in Texas similar to the one you mentioned in Oklahoma, but the best way to get a detailed report of your holdings is to hire a professional landman who will determine your ownership in each tract through a deed records search at the county clerk's office. The expense of that service depends on the complexity of the chain of title for your tracts of land.
Thank you. Any companies people would recommend?
Excellent advice. I belong to the group and will ask there.
In addition to the other answers (rights), in Texas seller can or cannot reserve and retain rights of ingress and egress and reasonable use of the Property (including surface materials) for mining, drilling, exploring, operating, developing, or removing the oil, gas, and other minerals.
Good luck,
Pat
Plus there is a lot of case law on what is a "mineral" and what is not. Water, gravel, and a few other substances generally go with the surface and are not considered "minerals".
Hi, Carolyn!
Sorry to be late to the party, but for some reason I sometimes receive postings from The Forum a day or more after they have been added.
If you will send me your legal descriptions, I will put together a set of maps and basic data on them. That should help you to at least some degree.
If you want to send them to me more privately than here on the general Forum Page, click on my name above and invite me to become A Friend on The Forum and you can send them to me privately that way.
Oh, and I believe Carol Dakan intended to say for you to be prepared to pay $500 a day, not $500 an hour. You could get one hell of an experienced Oil and Gas Attorney for $500 an hour.
Hope this helps -
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
You are right, 500 a day.
Carolyn,
As an owner, you can sell all or any part of what you own. For example:
If you are receiving royalty checks from a well, you can sell the future income stream from that single well
If you are a working interest owner, you can sell all or part of our working interest in a unit and even sell separate depths. (I've been involved in a lot of those recently)
If you are leased before production begins, you can sell all or part of your leasehold rights. (Those rights retained by the lease)
If you have many parcels, you can sell all or part of each parcel separately; leased or unleash, producing or non-producing.
In short, there is no limit as to what or how much you can sell. The route to success, however, is having a clear and written understanding between you and the buyer. Otherwise you will probably end up selling more than you intended at a lower price than you thought you would get. Where your minerals are located, it is "Seller Beware" the buyers know what they are doing.
Figure out what you want in exchange for assets to be sold then control the terms of the sale so everybody understands what is to be expected.
Gary L Hutchinson
Thank you for all your help. The issue is one piece that is surface rights only. Connected to a piece we owned minerals on. My grandfather bought the rights in the 1930's probably something to do with the ranch.
Again thank you all for your help.