I’m doing research on how families manage inherited mineral interests; the administrative side of it, not the geology. I’m not selling anything and don’t have a service to pitch as I’m trying to understand this world from the people actually living in it, and this forum seemed like the best place on the internet to ask.
Two things I’d genuinely love to hear about:
Who “handles” the minerals in your family, and how did that job land on them? Was it chosen or inherited by default? And what does it actually involve month to month / what lands on the kitchen table?
Tell me about the last time something went sideways. A transfer after a death that dragged on. A check that shrank, or just stopped, with no explanation. Deductions you couldn’t make sense of. An operator you couldn’t get a straight answer from. Records scattered across counties that nobody could piece together. What did you do about it and how far did you get? If the honest answer is “nothing, it wasn’t worth the fight,” I’d especially like to hear that, because I suspect it’s more common than anyone admits.
Happy to share back what I learn as the responses come in and thanks in advance; I’ve already learned a lot here just from reading.
We ended up inheriting minerals in several counties in Texas, which we have learned to manage. I dove in to mineral management seminars at TCU, gained a wealth of knowledge then on to a landman seminar. Both were good, then I hired a landman during a slow time for twelve weeks to help me run title on properties owned. This was good, I learned a lot but the best thing is the friendship. This has helped me. My landman friend just told me the other day that we have minerals we need to get them leased, and do the best we can. This was after a lease came in with low bonus and royalty interest, so I told him I tossed to the side. After his encouragement, I spoke to the landman making offer and swung a better deal. Just go learn all you can and do the best you can. Good luck
This is exactly the kind of story I was hoping for, thank you. Two things jump out. First, the sheer effort it took: two seminars plus hiring a landman for twelve weeks just to get your arms around what you already owned. Do you think most folks who inherit ever get that far, or do they just cash whatever shows up? Second, it sounds like the real system is your landman friend keeping an eye out and nudging you (the lease you almost tossed being the perfect example). What happens for families who never find that person? Really appreciate the insight here.
I am a fourth generation mineral owner, teaching the fifth and managing our daily workload. When I inherited, I immediately joined the National Association of Royalty Owners (www.naro-us.org) since my parents had belonged to it and raved about how much they learned. I also took NARO classes affiliated with TCU and many other classes offered by NARO and other great teachers. NARO is the only national association that advocates/educates mineral owners. NARO has state chapter conventions in multiple states that have oil and gas, webinars, town halls, newsletters, and a depth of directors who are professional mineral managers and also just plain old experienced mineral owners, so great networking opportunities. The Mineral Rights Forum is also an excellent resource. MRF and NARO are the two most up to date groups! Informed mineral owners make more in royalties. Those folks who do not care to get informed generally make less and are open to being taken advantage of.
Luckily, our family has been in the oil and gas business for over a hundred years with many generations of geologists and mineral managers, so we have an excellent file system and many templates designed to help with documentation and work flow. NARO has a Mineral Manager training set of classes which I found helpful in the beginning and still use as a Certified Mineral Manager. We also have excellent accountants and attorneys. In the last few years, professional minerals management firms have developed which can help families that don’t want to manage their assets on their own (for a price). Various banks and trust offices are also available to help mineral owners.
Everyone who inherits should immediately learn about the resources available in their particular states through government agencies, oil and gas commissions, statutes relating to the production of oil and gas, etc. Many of the resources are free. NARO presidents from various states have given webinars on those sites in the past few years.
HSAV, I represent many families and heirs who have inherited mineral interests, and I do not believe there is any one-size-fits-all approach. Some families manage their minerals very well, while others are still learning. Generally, the best-managed mineral interests are handled by the family members who take a genuine interest in them and remain actively involved.
Much of the process is learned through experience and, at times, trial and error. I often compare owning minerals to owning rental property. You need to pay attention: Is the tenant paying rent? Are the taxes being paid? Did you negotiate the best lease reasonably available?
If you own only one rental house—or one mineral tract—the time commitment may be fairly limited. If you inherit several properties or mineral interests, naturally, it will require more attention.
The most important thing you can do is continue educating yourself and asking questions. No one wants to leave money on the table, but while you are learning, do not be too hard on yourself if every decision is not perfect or you do not capture every possible dollar. Staying engaged and becoming more knowledgeable will put you in a much better position going forward.
If you are examining a Texas chain of title and the original patent date from the state is prior to September 1, 1895, the land is completely exempt from the Relinquishment Act. The minerals belong entirely to the current private mineral deed holders, and the Texas GLO has no jurisdiction over oil, gas, or mining leases executed on the property. [1, 2]