[Freakazoid]

Any chance there's anyone on the forum with experience with owning/purchasing/selling land with mineral rights?

Cliff notes, my wife's family has several hundred acres of land out in wyoming since well over a hundred years ago, an interested oil company/'speculator?' wants to drill in the area.

[JayKay335i]

$$$$$$$$$$$

[NYCGP]

Step 1: Make sure wife has land willed to her.

Step 2: Kill all in-laws.

Step 3: Kill Wife

Step 4: Profit

[Freakazoid]

Originally Posted by JayKay335i

$$$$$$$$$$$

yea that's what we're trying to figure out. They're offering a seemingly insignificant amount to drill for a couple years to find it, then a decent percent share if they find it.

I'm trying to figure out if the numbers are decent. I feel that simply drilling/searching for oil will effectively wipe out the usability of the land...but I also have no idea what I'm talking about.

[Freakazoid]

Originally Posted by NYCGP

Step 1: Make sure wife has land willed to her.

Step 2: Kill all in-laws.

Step 3: Kill Wife

Step 4: Profit

hahahaha, I'd have to do serial killer style. Quick numbers would put it probably at about 60 people.

60 people worth $60 million? hmmmm

[JayKay335i]

Might as well. Land isn't worth anything. Probably never will be. Unless you plan on drilling it wont matter in the long run.

[BTM]

A couple of searches have led me to believe that this is a much more complex issue than most of the OT regulars can give any quality advice on. It seems that mineral rights are often severed from surface estate.

http://blackbearddata.com/oil-and-ga...mineral-rights

If I were you I'd get in touch with a property lawyer.

[NYCGP]

Originally Posted by Freakazoid

hahahaha, I'd have to do serial killer style. Quick numbers would put it probably at about 60 people.

60 people worth $60 million? hmmmm

Family Reunion time!!!




I recommend a tent, kerosene and a Cuban cigar.

[Freakazoid]

Originally Posted by BTM

A couple of searches have led me to believe that this is a much more complex issue than most of the OT regulars can give any quality advice on. It seems that mineral rights are often severed from surface estate.

http://blackbearddata.com/oil-and-ga...mineral-rights

If I were you I'd get in touch with a property lawyer.

Thanks for the link, that's pretty much what I was able to dig out too, mineral rights don't exist in present day society, but the land is so old that they retained the mineral rights. Not a common situation anymore.

i think they'll be in touch with a lawyer (...I hope), I figured I'd take a shot to OT to see if anyone had any exposure to it though. Real world experience would be awesome. Hell even a good lawyer would be useful . the potential upside of could potentially obviously be huge.

[JayKay335i]

Assuming we can give good advice on anything would be a bad idea

[bolinp78]

Originally Posted by Freakazoid

Any chance there's anyone on the forum with experience with owning/purchasing/selling land with mineral rights?

Cliff notes, my wife's family has several hundred acres of land out in wyoming since well over a hundred years ago, an interested oil company/'speculator?' wants to drill in the area.

What county? I do it for a living.

[Freakazoid]

Originally Posted by bolinp78

What county? I do it for a living.

haha exactly why I asked I'll check out, does the county matter out there? (yes I think of wyoming as one big flat area and nothing of consequence out there )

[bolinp78]

Originally Posted by Freakazoid

haha exactly why I asked I'll check out, does the county matter out there? (yes I think of wyoming as one big flat area and nothing of consequence out there )

Yes, the location always matters.

[Freakazoid]

Originally Posted by bolinp78

Yes, the location always matters.

I'll find out, thanks!

[Freakazoid]

looks like converse county for however that comes into play

[NYCGP]

Freak you set up the Family Reunion yet? ...

[Freakazoid]

Originally Posted by NYCGP

Freak you set up the Family Reunion yet? ...

gotta get all this information for bolin first


theeen.....

[Maestro]

Here is my limited experience and this is mostly east coast, very few property owners of the physical land actually still own the mineral right under the land. They were sold and bough many years ago before people had a clue what they were giving up. However, just because you do not own the mineral rights does not mean the actual mineral rights owner can just walk on your land and begin drilling and mining per say. If someone approached you about drilling they may already own those mineral rights and they are just paying you to access the land or lease the land to recover what they have rights to.

A number of years ago it was a big deal to try and buy up mineral right from old forgotten companies which no longer exist but the mineral rights still exist. The problem was figuring out who was the last owner of the mineral rights since they could traded hands many times over the last 100 yrs. If you could locate this last owner you could apply to take over the company and recover the mineral rights. Some people were very successful and others wasted lots of time and money.

Even though the family has owned the land for a long time, is no guaranty they preserved the mineral rights. Looking at the deed of the land may or may not indicate whether the mineral rights are in tacked. You will need someone who know this stuff to do the necessary background searched to determine if the family has the actual mineral rights.

Here is something to keep in mind, if your wife's family does have the mineral rights then you are in the driver seat you can negotiate the best deal. If they do not have the rights, they are pretty much screwed. The owner of the mineral rights can not just walk on the land and begin drilling but you can not stop them from drilling under your land to get to whatever they are looking for. With the invention of sideways drilling they do not have to be on your land to drill they can get one of your neighbors to agree to set up and drill and they can drill right under your property and take it all and never pay you a dime.

They could be coming to you since drilling down is cheaper and paying you a little bit is less then having to sideways drilling from the neighbors land. So you have to decide is is better to take a little bit of money or get nothing and let your neighbor make the money.

A friend of mine and few others were looking into buying up mineral rights since one of the guys knew how to find the owners. The problem became that mineral rights was so fragmented over the year they there was no one owner and unless you got all the rights for entire area you could come up empty even with sideways drilling since you can not drill through someone else's mineral rights. Part of this idea was to find a piece of land near your mineral rights and drill sideways under everyone property to get to the reserves that you were looking to tap this way you did not have to share the profits or pay leasing fees.

[Freakazoid]

thanks for the insight Maestro, we'll do some more research about the actual ownership. They're 99.9% certain that the ownership still exists, and it seems the company that is inquiring knows this as well, but it can't hurt to be certain.

I really can't imagine owning and LIVING on land and then having a corporation come and drill/destroy it

[arggg45]

Originally Posted by Freakazoid

thanks for the insight Maestro, we'll do some more research about the actual ownership. They're 99.9% certain that the ownership still exists, and it seems the company that is inquiring knows this as well, but it can't hurt to be certain.

I really can't imagine owning and LIVING on land and then having a corporation come and drill/destroy it

Disclaimer: I work for an O/G company and deal with this type of scenario on a daily basis, however, any information contained in this post may or may not apply fully to your circumstance. I do not work in Wyoming, and the rules and regulations vary greatly from state to state. That said, this is a basic overview of what's going on.

The process of determining actual ownership is called running title, which is effectively a 'discovery' process to figure out exactly who owns the land and if they have ever sold their mineral rights. You can go the office of the county clerk and do the research on your wife's tract of land. You will need the legal location for the land, which is typically based on a section-township-range measurement of the property lines, and not a physical address. Once this has been done and the actual ownership of the mineral estate has been established, the O/G company will procede on acquiring a lease from that owner.

As far as living on the land and having an Oil/Gas company come and drill/destroy it, you're a touch mistaken on several points.
1.) They have several hundred acres of land, depending on the spacing rules of the field, you may end up with multiple wells drilled, possibly from the same pad. I'm not familiar with the field rules of this play. You may also have one pad site not near a home, etc.
2.) Most drilling sites do not destroy much of anything, since they're temporary, and heavily regulated by the states. It takes approximately 40 days to drill and complete a well in the Barnett Shale (in TX). After that, assuming the well produces, after you receive and sign a division order, it becomes monthly mailbox money....

If you can provide more detailed location information, via PM or email, I'd be more than happy to explain this in more detail.

[bolinp78]

Originally Posted by arggg45

Disclaimer: I work for an O/G company and deal with this type of scenario on a daily basis, however, any information contained in this post may or may not apply fully to your circumstance. I do not work in Wyoming, and the rules and regulations vary greatly from state to state. That said, this is a basic overview of what's going on.

The process of determining actual ownership is called running title, which is effectively a 'discovery' process to figure out exactly who owns the land and if they have ever sold their mineral rights. You can go the office of the county clerk and do the research on your wife's tract of land. You will need the legal location for the land, which is typically based on a section-township-range measurement of the property lines, and not a physical address. Once this has been done and the actual ownership of the mineral estate has been established, the O/G company will procede on acquiring a lease from that owner.

As far as living on the land and having an Oil/Gas company come and drill/destroy it, you're a touch mistaken on several points.
1.) They have several hundred acres of land, depending on the spacing rules of the field, you may end up with multiple wells drilled, possibly from the same pad. I'm not familiar with the field rules of this play. You may also have one pad site not near a home, etc.
2.) Most drilling sites do not destroy much of anything, since they're temporary, and heavily regulated by the states. It takes approximately 40 days to drill and complete a well in the Barnett Shale (in TX). After that, assuming the well produces, after you receive and sign a division order, it becomes monthly mailbox money....

If you can provide more detailed location information, via PM or email, I'd be more than happy to explain this in more detail.

Whew, you saved me from going off on that guy.

Another piece of misinformation that you did not address was the "sideways" drilling (it's really termed "horizontal"). A company cannot drill horizontally and perforate (produce) in their target zone if the perforations are too close to their drilling unit boundary, or the boundary of an unleased mineral interest. The laws on this footage requirement vary. There are laws in place to attempt to minimize 'drainage' as it is called, but this again varies by state and by field, as different fields have different characteristics that affect the calculated 'drainage area'.

But to say that oil companies can legally profit off of an unleased mineral owner by drilling under them is just plain wrong. There is something called forced pooling in many states, by which you can petition to be allowed to allocate unleased owners into a drilling unit, but this does not mean that you can disregard them completely. They are still entitled to royalty after a well has paid itself out (again, laws on this vary by state). That's one of the quickest ways to get your ass summoned to court.

Also, in Texas, if I have the mineral rights leased, I CAN go onto your surface and drill a well, provided I am within the letter of the law and not shutting down your place of business or preventing you from making a living. Google "dominant estate", and know that the mineral estate is the dominant estate in Texas.

As a sidebar, you'll see a lot of environmental groups keying on this "dominant estate" issue, saying that they do not have rights, blah blah, but the purpose of forced pooling (which is extremely hard to get approved in Texas, it is basically non-existent, unfortunately) is to maximize the resources' potential. Oftentimes, there are owners that cannot be found, or owners that refuse to lease just because they feel like it, and forced pooling attempts to allow companies to develop their leased minerals in an efficient manner. Drilling a well is not as simple as leasing a tract of minerals, moving a rig onto the surface, and drilling. In order to avoid trouble and lawsuits from disgruntled surface owners, companies will almost always contact the surface owner, tell them what is going on, and negotiate a surface damages agreement with them. This agreement will set out an amount that they will be paid and will also outline the ways in which the company will perform operations. I do this all the time, and I rarely have an issue, because I am reasonable with them and I do not hide anything. The company will then pay the surface owner based on what is agreed upon. Most companies follow a general model with this, and some surface owners will get a lawyer involved and come up with their own agreement.

[arggg45]

Bolinp78 beat me to it. Read his post.