Minerals were separated from the Texas land and divided into thirds, call them A,B, and C. A has executive rights with knowledge of share and share alike. A dies and in A's will gives me and my spouse the minerals as a life estate with no mention of the executive rights in the will. Understand if we sign a oil gas lease the remainderman also signs and we get interest off the bonus and royalty trust (bad deal). Since we are not signing the lease with executive rights; what happens to the executive rights? With no person attached to the executive rights, can mineral owners B and C with 2/3 ownership sign a oil and gas lease and keep the bonus between them? Are the executive rights gone forever?
Very interesting question.
Here are a few posts to help out.
Concerning Life Estates
http://www.mineralrightsforum.com/profiles/blogs/the-life-estate-in-texas-a
The short answer is that the executive rights on B and C were passed to you for life - and potentially the remaindermen as well. If I were buying the lease, I would insist on the remaindermen executing the lease as well so that the executive's signature would survive his death and the interest of B and C would still be leased.
It is with many thanks I say to you Mr. Cotton, thanks again for being on this forum and taking your time to answer and share your knowledge with us.
My understand from your links and answer is:
1: B and C cannot sign a OG lease without me and my spouse signing and questionable on the needing for the remaindermen signature. With executive rights on B and C we have no share and share alike, and the fuduciary duty is not there as we do not get 1/3 of A's bonus or royalty money, only the interest. From your links - this is where the Lessee I guess, could give us an ORI on just A's part and not B and C part. Do not know if a division order can do that?
2: If the remaindermen does not sign, then when he dies, not me and my spouse (life estate) die, the lease we signed as the executive on B and C becomes (for a better word) voided?
I guess I need to stop and step back and stop looking for all the variables as a life estate owner, but wait for a CPL to come with a OG lease.
Can't have an ORRI where the non-executives or remaindermen do not. That is self dealing and is prohibited. There is nothing wrong with asking the remaindermen to sign a lease that has a clause that directs all lease payments to you for life.
Thanks for the kind words. It kind of irks me when I try my best to give a well informed answer and the person to whom it was directed completely ignores me. I appreciate your total class of character.
As to the CPL, is he working for you or for the oil company?
Thanks for correcting my train of thought on the ORRI. The advice to work with the remaindermen on a clause will be my next avenue. Now I need to show the remaindermen reasons for the clause. No Landman yet, just waiting and hoping one will come by. Most I have talked with work for the oil company indirect. Here in my area, Clay county, TX. we have what I call stripper wells or 40ac wildcatters. As for the kind words they are free, wish you were closer (Denton) a steak dinner would do you better justice.
Thanks again.