The questions mineral owners actually ask

The most reliable way is to look for records with the county or parish where the land and/or minerals are located. If you own the land, but are unsure about the minerals, the best place to look is the land deed. In areas with known mineral deposits or formations, it is common practice to clarify mineral ownership. If the minerals were reserved by the surface owner, there will most likely be a paragraph stating as much. If the minerals were sold along with the land, there is typically a descriptor making that clear as well. If you believe you own the minerals only, a mineral deed should be filed with the county or parish in which the land is located.

If you have the probate, will, or an affidavit of heirship as well as a death certificate, you can contact the operator on the check and request an ownership change form or inquire about their formal process, so you can change the ownership into your (and, if applicable, the other descendants') names. If you don't have anything but the check stub, still contact the operator on the check (the payor) and explain that you found the check stub and you don't know what your parent(s) owned. They should be able to give you a county and/or specific wells. If you have power of attorney, you can even ask for a division order for your records, that will include land descriptions, interests, the owner number, etc. It doesn't hurt to ask for any land documents they have as well, although you will rarely get anything. Once you have an idea of what is owned, or at least the location of what is owned, you can go to the website of the County Clerk (sometimes called the clerk of court or recorder) and search for any documents you might need.

While being able to see a rig from your property is a decent indicator that there are minerals under your property, first you need to determine if you own the minerals or not. In most cases, the minerals were severed from the surface long ago. In other words, someone owns the minerals and someone else owns the surface. If you do own the minerals, you can contact the County Clerk's office to ask about activity in the area, speak with your neighbor who has the rig on their property and get the name of the operator or look for a sign with the operator's name near the property. Then contact the operator and speak with the land department or leasing department and explain that you have unleased minerals near one of their wells and see if they're willing to lease with you as well. If you do not own the minerals, then unless you live in a state where the minerals revert to the surface owner after lying dormant for a certain period of time, there is not much you can do. (Louisiana is 10 years, North Dakota, Ohio, and Indiana are 20 years, and Michigan can revert to the surface owner if the conditions of certain statutes are met.)

Start with anything that names an operator, a well, or a check stub, since that will usually get you a county from that payor's owner relations desk. From there, the county clerk (sometimes called the clerk of court or recorder) keeps a grantor-grantee index you can search by name, and most counties now have that index online going back a decade or two, with older records requiring an in-person or mailed request. Search your grandmother's name and any prior married names as both grantor and grantee, since a deed into her is what will give you the legal description, and don't stop at the first hit, because minerals are frequently spread across several tracts acquired at different times. If she was ever paid by a specific operator, ask their division order department for a copy of any division order in her name, since that lays out the land description, decimal interest, and county in one place. Tip: before speaking with the operator, have the legal documents showing that you have the right to inquire on her behalf, like a will, copy of a probate, or power of attorney.

Call the owner relations or revenue department for every operator you can identify from old checks, check stubs, or division orders and ask directly whether they're holding funds in suspense under that person's name or owner number, since a death in the chain of title is one of the most common reasons payments get held rather than mailed. Have the deceased's full legal name, any prior names, their owner number if you have it, since that's what lets the desk search their system. If they can't find anything, or if enough time has passed, check your state's unclaimed property division and the mineral state's division as well, since funds that sit unclaimed past a state's dormancy period escheat to the state and move from the operator's suspense account into a state database you can search by name. Search every name variant, including maiden names, since a large share of unclaimed mineral money simply sits under a name nobody thought to search. www.missingmoney.com is the nationwide site that will take you to the correct state's database if money is found.

If it was properly signed, notarized, and delivered at the time, it's legally valid whether or not it was ever recorded, but an unrecorded deed creates real practical problems, because the county records still show the prior owner, and an operator or title examiner has no way to know the deed exists until you bring it to them. The fix is usually to record it now, in the county where the minerals sit, along with anything showing the chain from that document down to you if it wasn't made directly to you. A quitclaim deed is worth reading carefully before you rely on it, since it only transfers whatever interest the grantor actually had at the time, with no promise that they held good title or full ownership to give, unlike a warranty deed, so it isn't proof by itself that the interest was ever theirs to convey. Bring the original document, not a copy, to the county clerk or a title attorney, since some counties won't record from a copy, and hang onto the original either way.

The lease is only good if the parameters of the primary term were met and moved into the secondary phase AND there have been one or more producing properties or timely shut-in payments to hold the lease. (There are several nuances to this based on the specific leased terms.) If you also found corresponding pay stubs, then you can probably answer that question fairly easily, but if no one remembers any mention of royalty checks or ownership, determining the status of the lease is a bit more complicated and it is best to contact a landman to help.

Generally speaking, a mineral lease is just like any other lease. You are lending someone your asset and allowing them to use it, within specified parameters, and earning money from that use. Leasing is necessary to monetize what you own because minerals in place or unproduced minerals under the ground cannot be utilized. In order to get them from under the ground to the end user (e.g., the power grid of your town, the fuel in your vehicle, or the oil tanker headed to another country), a well must be drilled, pipeline laid, the composition of the minerals altered to specific regulations, etc. Most people do not have the time, money, or know-how to do this, so the mineral owners rely on the operating companies to help them out. This is where a lease comes into play. A mineral owner leases them the right to drill/produce their minerals, within certain parameters, and in exchange the owner is paid a negotiated royalty rate and the operator keeps the rest, called working interest. The royalty rate is cost-free (other than potential post-production costs), while the working interest is cost-bearing and why it is a larger percentage. The lease is active as long as the parameters are met.

The first thing you should do is present a counter offer to the person offering to lease. Whether you are negotiating directly with the operator or a smaller firm looking for leasehold, remember that you cannot get what you don't ask for. The initial offer is almost always as much in favor of the person doing the asking as possible and there is almost always wiggle room. Keep pushing for what you want until you are either a) content with the terms or b) at a standstill. If you arrive at option b, however, you do have a choice to make before it is made for you, especially in states that are very operator friendly. Arriving at an impasse exposes the mineral owner to forced pooling or a version of it, depending on the state. (e.g., Forced pooling is very common in Oklahoma, becoming an unleased mineral owner or unleased mineral interest owner in Louisiana is common as well.) From a more macroeconomic perspective, the states want the minerals out of the ground and developed so they can be used, which makes sense. The factors contributing to whether you want to choose option b above vary by state, so it is at this point that contacting a 3rd party or doing some research will benefit you. There are pros and cons to being force pooled and understanding the nuances and terms of each state are important. If the research is something that interests you, the state mineral code will have all the terms laid out. If you would rather consult an expert, fill out our form to start a conversation.

No. Unfortunately, once a lease is signed, the terms are locked in until one of the conditions in the lease is met for expiration of the primary term or termination during the secondary term. A lease can hold your minerals for 100 years or more, which is why it is so important to negotiate the terms. The person offering the lease is presenting you with the options in their best interest, not yours, so do not be afraid to counteroffer. DO NOT SIGN SOMETHING YOU DO NOT FULLY UNDERSTAND. Contact an independent landman, oil and gas attorney, a member of a reputable organization, like National Association of Royalty Owners (NARO), or consult a reputable online forum, like mineralrightsforum.com where experienced oil and gas professionals as well as mineral owners will ask for, give, and/or receive advice. There are many oil and gas professionals who want to protect the mineral owner and will give you advice. If you feel more comfortable going through a more official path, contact an oil and gas attorney that is knowledgeable about the area in which your lease will cover. Every state has nuances and it's important to understand them when negotiating your lease.

He or she probably is knowledgeable and trustworthy but they are not your friend, they are an employee of the operator and are paid to get the best deal for them, not you. Do independent research to ensure you're getting the best deal. At the very least, get a second opinion. Reading a lease the way the operator reads it is the work we do, if you want it read before you sign.

Chances are that the lease is still in the primary term, which is the amount of time an operator has to meet the parameters set out in the lease (typically drilling a well capable of producing quantities) to move the lease into the secondary term. Basically, if the well has not been completed, there is no money to give you. Your check is the portion of proceeds from the sale of the produced minerals. If you think that your primary term has ended and you still have not received a payment, contact the lessee and ask about the drilling status. There is always a chance that the lease was allowed to expire, or the lease has been sold to another operator. While this is a common occurrence, the lack of communication can be frustrating. We recommend requiring certain notifications and specific timelines be a part of your lease.

Don't sign anything, and don't feel rushed. That offer didn't come out of nowhere. Buyers send letters when they know something about your area, usually new permits or new wells nearby, and the deadline in the letter is a sales tactic, a real buyer will still be there next month. Before you talk numbers at all, figure out what you actually own: how many net acres, whether they're leased, whether they're producing, and what's going on around you. The buyer has already done that homework on your minerals, down to the well, and you shouldn't be the only person at the table who hasn't. Then get an independent opinion of value, because one offer letter is not a market. If you do decide to sell, two or three bids will almost always beat the first letter that showed up in your mailbox, and remember that first offers usually start low. That's not an insult, it's just how buying works. Also remember you don't have to sell at all. Minerals don't spoil, and if somebody sent that letter, it's because they think your minerals are worth more than they're offering. Putting a real number on an offer is work we do every week, if you want a second set of eyes before you answer.

Selling minerals is a real transaction, like selling land, so it needs to be done in the correct order. The first step is knowing what you own: net acres by property, is your interest leased or unleased, are the properties producing or not, and what activity is around you. The purchase price is determined by these factors, so having a complete picture of what you own will help you get the best price. The second step is being able to prove that you own it and, therefore, have the right to sell it. To do this, you need the relevant deeds, probate records, leases, division orders, recent check stubs, etc. A serious buyer will ask for these during due diligence, and a clean title with the supporting documents makes you money by saving the buyer's time spent on title work. At this point, we recommend that you get a value opinion before you solicit a single offer, so you know what your assets are worth before you hear anyone else's. Now you are ready to market in a way that creates competition. You can talk to buyers directly, use a broker, or use a listing service, but whatever the path, multiple bids beat one phone call every time. Expect the winner to do title due diligence, and expect the closing paperwork to be a purchase and sale agreement followed by a mineral deed. Read both before you sign, and don't hesitate to have an attorney also look them over. We also recommend that you talk to your CPA before you close, not after, because the tax treatment of a mineral sale is worth a conversation while you can still plan for it. Valuing your minerals before you take them to market is a service we offer.

Tying your DOI means checking the decimal on the division order against your own math before you sign, instead of trusting that the operator got it right. They usually do, but "usually" is doing a lot of work in that sentence, and a wrong decimal pays you wrong for the life of the well. In an ideal world, the math should be simple, but with the technological advances over the past 20 years and the increasing speed at which it is evolving, the calculations have become quite complicated. Here is a straightforward example, if your minerals have been unitized: your net mineral acres in the unit, divided by the total acres in the unit, times your royalty rate. So if you own 20 net acres in a 640 acre unit at a 3/16 royalty, that's 20 divided by 640, times .1875, which comes to .00585938, and that decimal should match what's printed on the division order and later on your check stubs. Your net acres come from your deeds and probate records, the unit size comes from the state (in Oklahoma, the Corporation Commission), and your royalty rate is in your lease, or in the pooling order if you were pooled. If your math doesn't match their decimal, don't panic and don't sign, ask the operator for their calculation worksheet, they should provide it. Sometimes there's a good reason for the difference (only part of your tract sits in the unit, the well is a horizontal spread across more than one unit, or somebody carved a royalty interest out of your chain years ago), and sometimes there's no good reason and you just caught an error before it cost you money. Tying decimals is part of what we do every month for the owners we work with, if you'd rather hand off the math.

We recommend having everything in one place, including a written record of everything owned. Minerals get lost when the documents live in six drawers across three relatives' houses. Keep the documents: deeds, probate and heirship records, every lease and every amendment, division orders, and your check stubs, including the detail pages that show wells, volumes, and deductions. We also recommend keeping any offers to purchase or lease, even if you have no intention of doing so or are already leased. Those documents help paint a picture of the value over time and activity in the location your minerals are located. A good rule of thumb is: if it came from an operator or a courthouse, keep it, paper copies in one fireproof box and digital copies in one folder, ideally both. Then make a simple list, one line per property. A notebook works, a spreadsheet works better: county and state, legal description, your net acres, the operator, the wells, your owner number with each operator, your decimal, and the royalty rate. That one page answers most of the questions that come up, and it's the first thing anyone helping you will ask for, whether that's a landman, an attorney, or the operator's owner relations line. Last, keep it current. When a new division order comes, a well changes hands, or an address changes, update the list the same week. Ten minutes now saves your kids the archaeology project later, and if you found this page because you're doing that archaeology project right now, see the first question at the top. Building and keeping that file straight is the first thing we do for every owner we work with, if you'd rather not start from scratch.