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Mineral Rights help

1,805 Views | 26 Replies | Last: 23 hrs ago by TxAg20
CanyonAg77
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10:17a, 1/31/25
AG
So we receive some money from mineral rights in Dawson County.

Not much. Don't think the mansion in the TV show Dallas. More like a vacant lot in Happy, Texas.

We recently received a division order for a well we didn't know had been drilled. We have mineral rights, a distant cousin has leasing and surface rights. So yea, free money for picking the right ancestors.

Like most properties in the area, it has multiple royalty owners, and it's a horizontal well, to complicate things. And from the land my grandfather owned, my mom owns some portions that are just hers, and some that she and dad divided for my brother and I before they were drilled.

So, at minimum, we should have royalties of X percent for me, X for brother, and X for mom.

Or it should be me X, brother X, and mom X+, since she owns some minerals that she didn't split, as they were already producing.

Instead it is me X, brother X, and mom 0.2X

We talked to the very unhelpful folks at the oil company, they basically said: "Prove it." Brother sent them the legal papers where mom and dad split with us, they say it is not enough.

We can go on the Dawson County appraisal district, and find info on the wells that are in production. There does not seem to be a way to search for who holds mineral rights on property not yet in production.

Where do we go from here?

Is it something we could go to the county seat and find?

Hire a lawyer?

Hire a landman?

TL;DR : How do you find mineral rights on property, without having a deed in your hands?
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OnlyForNow
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In reply to CanyonAg77 • 10:27a, 1/31/25
AG
Hire a good o&g lawyer.
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Charismatic Megafauna
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10:34a, 1/31/25
AG
Do you have a lease or is your interest force pooled? Guessing force pooled since they are taking the hard line. Determining mineral interest requires a lot of work running title. You don't have to be a landman but there's a learning curve. I would ask the operator politely if they could share a copy of the drilling order title opinion and see what you can refute in there. Then you can either just be a pain/squeaky wheel or lawyer up. Care to share the name of the operator?
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CanyonAg77
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In reply to OnlyForNow • 10:38a, 1/31/25
AG
Yeah, kind of leaning toward a lawyer. The distant cousin hired one because the operator has been producing since March 2024 and had yet to pay her any royalties.
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CanyonAg77
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In reply to Charismatic Megafauna • 10:47a, 1/31/25
AG
Charismatic Megafauna said:
Do you have a lease or is your interest force pooled?

(Showing my ignorance) Don't know. The distant cousin leased it, I believe.

Side question, how far out from the lateral do they have to pay rights? Do they only pay the leaseholder directly above, or do they owe some distance either side of the horizontal?

Another weird side thing, there is a bankrupt oil company that owns 50 acres of lease in the path of the horizontal. There was a well permitted in 2014, and never drilled. There are two horizontals from the same pad. One is perforated under the 50 acres, the other lateral has a no-perf zone there.

Quote:
Determining mineral interest requires a lot of work running title. You don't have to be a landman but there's a learning curve.

So, taking a day and driving down to the courthouse would be wildly inefficient and likely unproductive?


Quote:
I would ask the operator politely if they could share a copy of the drilling order title opinion and see what you can refute in there

Since the cousin already hired a lawyer to get her share delivered, it may be most efficient and talk to him. He could already have that. Otherwise, I appreciate the idea.

Quote:
Care to share the name of the operator?
Birch resources

The weird 50 acres leased and never drilled was Big Star, became Callon, became Apache
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Charismatic Megafauna
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11:07a, 1/31/25
AG
Probably makes the most sense to hop on your cousin's coattails

The 50ac probably expired and has been leased by birch or somebody else, if the wells never produced or haven't in a while

Regarding how far from the wellbore they have to pay, it depends how the unit is drawn, which is the result of a funny financial/political/geologic exercise. The division order should have a map of the unit and the mineral owners in it.
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CanyonAg77
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In reply to Charismatic Megafauna • 11:26a, 1/31/25
AG
Quote:
The division order should have a map of the unit and the mineral owners in it.
What we received had our share, nothing more. I can find the plat from the RRC that shows where the well was drilled, etc.

Or are you talking about

Quote:
the drilling order title opinion
?
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Charismatic Megafauna
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12:00p, 1/31/25
AG
No i have less experience in Texas than other states, but before you get royalties you should be provided with a document called a division order, which tells you how your ownership is calculated relative to the unit they are about to produce. Lots of decimals and in my experience usually includes a map of the unit. They want you to sign it but don't, because then you are agreeing with their calculations and that makes it tough to argue if you find a mistake later on. You don't have to sign it to get paid. The division order title opinion (doto) is a thick document produced by title attorneys summarizing their research and findings as to who should be paid for minerals extracted from the unit and how much. The division order is drafted from the findings of the doto
Everybody loves a dirt road
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CanyonAg77
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In reply to Charismatic Megafauna • 1:05p, 1/31/25
AG
Yeah, all we got is the single page with just our share listed
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Charismatic Megafauna
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1:33p, 1/31/25
AG
I can't find units online anywhere but i can see where birch is operating in your area. Looks like based on the well you could zoom in on the tx rrc online gis and see what surveys are included in your unit
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CanyonAg77
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In reply to Charismatic Megafauna • 1:37p, 1/31/25
AG
I can get the plat. It doesn't have mineral owners listed
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JILAS-79AG
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1:59p, 1/31/25
AG
Go to TX Railroad Commission website. Operator required to file Drilling Permit showing "Unit" outline, tracts, mineral owners, acreage, etc. TX does not have "Forced Pooling (like OK). Do not sign Division Orders ("DO") until happy with calculation. Operator required to escrow funds until DO signed.
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CanyonAg77
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In reply to JILAS-79AG • 2:16p, 1/31/25
AG
I'll look at the RRC site again, but the drilling permits I could dig up did not have royalty owners listed.

For instance, here's the W-1 for another Birch Well, not ours. No royalty info that I can see.

Balerion the Dread Permit

Balerion the Dread survey plat
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OnlyForNow
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In reply to CanyonAg77 • 3:54p, 1/31/25
AG
Oh, it's all cataloged and just sitting in an account. So while you've been unable to use or earn interest on the money, it's there somewhere.
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CanyonAg77
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In reply to OnlyForNow • 3:58p, 1/31/25
AG
That's not the worry. The worry is getting correct distribution for all, especially mom.

And I'm tempted to ask for payments with interest. Been producing for 300 days at this point, and they just now sent us DO
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OnlyForNow
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In reply to CanyonAg77 • 4:03p, 1/31/25
AG
From my own personal experience, I don't think you can get interest added to it unless you can show damages - we didn't get paid for over two years and pretty sure were not awarded interest (Louisiana not Texas) -- just a big fat check that hit taxes all in one year I believe.

The better lawyer you get with, that should be one of the first things they could tell you.

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CanyonAg77
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In reply to OnlyForNow • 4:51p, 1/31/25
AG
Quote:
I don't think you can get interest added to it
I am given to understand that companies are required to pay within 90 days. Seems there should be a relief for holders who aren't paid in 90 days. And the cousin I mentioned earlier was going after them for late payment, so I'll see if she was successful.
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TxAg20
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5:25p, 1/31/25
AG
It sounds like your cousin has the "executive rights" to your mother's, your brother's, and your minerals. The lease they signed will have the pooling language and any deadlines in it. There will be a copy of this lease, or a memo of the lease, recorded in the Dawson County records.

It's unlikely you're going to get any interest on held funds as any payment deadlines are usually based from the date of cured title and a signed division order.

It's unlikely you're going to get a copy of the drilling title opinion or division order title opinion, but you can always ask.

Your best bet is to use the attorney your cousin used as they should already be familiar with the lease.

It's easy to be upset with the oil company when you don't agree with their title opinion, but there are probably dozens, if not 100's, of mineral owners in this single unit and they don't have the time, or the desire to spend money, to educate every mineral owner on what they own.
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FILO505
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5:37p, 1/31/25
AG
If you do end up going with a lawyer, Joseph Briers here in BCS is an O&G guy. Great dude, with Lawyer's Title
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W TX Refugee
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10:52p, 1/31/25
AG
If you need local counsel DM me. Grew up in Lamesa and can probably point you in the right direction.
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CanyonAg77
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In reply to W TX Refugee • 10:57p, 1/31/25
AG
W TX Refugee said:
If you need local counsel DM me. Grew up in Lamesa and can probably point you in the right direction.
Cousin used Garrett Ferguson in Lamesa. Will likely talk to him Monday.
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normaleagle05
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In reply to TxAg20 • 11:11p, 1/31/25
AG
TxAg20 said:
It's easy to be upset with the oil company when you don't agree with their title opinion, but there are probably dozens, if not 100's, of mineral owners in this single unit and they don't have the time, or the desire to spend money, to educate every mineral owner on what they own.

Quoting this bit for posterity's sake. What a great summation of the common situation between so many mineral owners and their lessees.
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CanyonAg77
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In reply to TxAg20 • 11:13p, 1/31/25
AG
Quote:
It sounds like your cousin has the "executive rights" to your mother's, your brother's, and your minerals. The lease they signed will have the pooling language and any deadlines in it. There will be a copy of this lease, or a memo of the lease, recorded in the Dawson County records.

Probably true, and another reason to use the same lawyer.

Quote:
It's unlikely you're going to get any interest on held funds as any payment deadlines are usually based from the date of cured title and a signed division order.

True. The well was permitted 22 months ago. Completed and producing 10 months ago. Sent out the DO one month ago. Pretty crappy way to do business. I can't imagine anywhere else that you could take assets for a year without bothering to even trying to find the owner's address.

Quote:
Your best bet is to use the attorney your cousin used as they should already be familiar with the lease.

Likely course of action.

Quote:
It's easy to be upset with the oil company when you don't agree with their title opinion, but there are probably dozens, if not 100's, of mineral owners in this single unit and they don't have the time, or the desire to spend money, to educate every mineral owner on what they own.

But it is, or should be, their legal obligation to discern those numbers, and allocate them accurately, in a timely manner.
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tamc93
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11:33p, 1/31/25
AG
Did they tell you how much they had in suspense?

Are you talking a steak dinner every year or every meal of the day?

Lawyers are not cheap, but agree on trying to get it right.
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CanyonAg77
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In reply to tamc93 • 11:38a, 2/1/25
AG
tamc93 said:
Did they tell you how much they had in suspense?
Will not do so without a signed DO

Quote:
Lawyers are not cheap, but agree on trying to get it right.
Looking online at last year's production, we can afford a lawyer. Hate that it comes to that, only the lawyer benefits from them screwing it up to begin with.

Quote:
Are you talking a steak dinner every year or every meal of the day?

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W TX Refugee
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In reply to CanyonAg77 • 3:23p, 2/1/25
AG
Don't know him, but he took over the practice of a good one there in town. Asked Dad about him and said he thought he was good and stays busy, for what that is worth. If that does not work out may need to try Lubbock or Midland.
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TxAg20
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In reply to CanyonAg77 • 4:43p, 2/1/25
AG
CanyonAg77 said:

Quote:
It's easy to be upset with the oil company when you don't agree with their title opinion, but there are probably dozens, if not 100's, of mineral owners in this single unit and they don't have the time, or the desire to spend money, to educate every mineral owner on what they own.

But it is, or should be, their legal obligation to discern those numbers, and allocate them accurately, in a timely manner.

It is their responsibility, but "timely" is subjective. It is rare that an oil company has this done "in house". Every oil company that I'm familiar with has outside attorneys/law firms do their title work. The oil company then uses the Division Order Title Opinion, from the outside attorney or law firm, to issue division orders. The title opinion does not typically show how each mineral owner came to own their interest. It just shows who all the mineral owners are, and their portion of ownership as of a certain date.

In a title opinion, there are often title requirements that need to be met or "cured" to reliably allocate ownership. These are issues that are ambiguous in the county records due to poorly written wills, divorce decrees, and assignments. If there's one of these issues in the chain of title that ends with your ownership, you won't receive a division order until that requirement is cured.

I worked at a small oil company for 15 years and land/legal is one the departments I oversaw. We had 30-50 title opinions each year and probably 5-10 mineral owners each year claim their division order was incorrect. 3 of those claims, over 15 years, turned out to be correct. So, although rare in my experience, it does happen.

The process of figuring it out goes something like this:

1. Mineral owner calls or writes that their division order is incorrect.
2. Division order department goes back to title opinion to confirm the division order matches the title opinion.
3. Division order department responds to mineral owner that title opinion shows their interest is as reflected on their division order and explains what little they can understand through the title opinion.
4. Mineral owner claims it's incorrect based on family knowledge.
5. Division order department says send us copies of recorded documents that support your claim.
6. Mineral owner believes it's the oil company's job to figure it out.
7. Oil company believes they just paid a law firm $30,000-$100,000 for a title opinion and the lawyers probably got it right and mineral owner is wrong.
8. Depending on the division order analyst handling unit, they may inform the land department of the claim or they may do nothing.
9. Mineral owner hires a lawyer who sends a certified letter/nastygram to oil company. This goes to top of land/legal who will send copy of letter to attorney/law firm that wrote title opinion.
10. Law firm/attorney will go back to title opinion notes and explain why title opinion is correct or blame landman that generated run sheet for missing instrument if incorrect.
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