What next

I have been phoned by an oil and gas broker in Bismark ND ....who says my father bought mineral rights to property in the 30's. And that it is worth money. He has a copy of my fathers will/probate. What do I do now....he wants to follow up with a contract. etc. Says wells were drilled on the property in the 50' and produced.

Thank You for any advice

PS the property is evidently in ND

Find out where the property is and don't sign anything. If you can find out the net mineral acres also, then even better. Some wells were worth quite a bit of money back in the day but others were less productive, and there may be the matter of new wells that you may have that they may not want to mention until you have signed a lease and it is too late.

If they send you a lease offer it should have the legal description, township, Range and section from which the well/s can be found and the amount of production determined. You may be able to deduce from the offer how many net acres they are trying to lease from you by their offer of xxx dollars per mineral acre and the amount on the sight draft they will probably include. which may not tell you how many you have alltogether but it's more than you know right now.

There is a possibility that you could be a partner in the well rather than leasing your interest. I'd certainly look into it with such a lengthy period of production. There have been some cheap verticle wells in Stark county for instance that have produced almost 2 million barrels of oil and you certainly wouldn't want to lease that.

Mr. Johnson

Mineral rights are often forgotten in probate if there is no activity at the time. That doesn't mean they don't exist or belong to the heirs. In ND location is everything when it comes to value. Share the location with us and you will most likely get an idea of relative value, or at least, activity nearby. MRF members are a generous and knowledgeable lot. At a minimum, don't be quick to act on an offer without some advice from other owners.

Thank you for the reply,

We won't sign anything with out an attorney, and more research. evidently the person calling us is a oil/mineral broker [landman] and he wants us to sign an agreement with him for a % of what the oil company would pay us in the future. He says there is money waiting for us now regarding the existing well. He wants none of that monies. we own 1% of acerage. I think about 600. I don't know what county.....other than it is in Bakk Shale area. He seems not to want to give me the location.

Sincerely

Mr Johnson

r w kennedy said:

Find out where the property is and don't sign anything. If you can find out the net mineral acres also, then even better. Some wells were worth quite a bit of money back in the day but others were less productive, and there may be the matter of new wells that you may have that they may not want to mention until you have signed a lease and it is too late.

If they send you a lease offer it should have the legal description, township, Range and section from which the well/s can be found and the amount of production determined. You may be able to deduce from the offer how many net acres they are trying to lease from you by their offer of xxx dollars per mineral acre and the amount on the sight draft they will probably include. which may not tell you how many you have alltogether but it's more than you know right now.

There is a possibility that you could be a partner in the well rather than leasing your interest. I'd certainly look into it with such a lengthy period of production. There have been some cheap verticle wells in Stark county for instance that have produced almost 2 million barrels of oil and you certainly wouldn't want to lease that.

Thank You for the reply

I am trying to find out where the property is. It's 1% of acerage, maybe 600 acres. Won't sign anything till we do more research. This is not an oil co trying to lease from us......a sandman [oil broker]

Thank You for the info.

Mr Johnson


r w kennedy said:

Find out where the property is and don't sign anything. If you can find out the net mineral acres also, then even better. Some wells were worth quite a bit of money back in the day but others were less productive, and there may be the matter of new wells that you may have that they may not want to mention until you have signed a lease and it is too late.

If they send you a lease offer it should have the legal description, township, Range and section from which the well/s can be found and the amount of production determined. You may be able to deduce from the offer how many net acres they are trying to lease from you by their offer of xxx dollars per mineral acre and the amount on the sight draft they will probably include. which may not tell you how many you have alltogether but it's more than you know right now.

There is a possibility that you could be a partner in the well rather than leasing your interest. I'd certainly look into it with such a lengthy period of production. There have been some cheap verticle wells in Stark county for instance that have produced almost 2 million barrels of oil and you certainly wouldn't want to lease that.

Ok, J. I missed your reply before. For a buyer to buy 1% would be I think unusual. My grandfather bought several properties that I have become heir to where the seller retained between 1% and 7% royalty interest in the minerals. This seems fairly common in North Dakota. I would take nothing for granted at this point.

I think Pete Wrench has given the most useful advice and I agree with him. Pete has also set forth a plan of action and I would follow it.