Mineral Rights for 45 Cousins

  My husbands great grandparents left him and 45 cousins minerals in Belmont County. We are suppose to be receiving money from the oil rights by Oct. 19. I hope it goes through. It is with Gulf oil and we have signed the papers about 3 months ago.  Bonnie

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Permalink Reply by DESJR on September 27, 2017 at 9:23am

WHAT WELL, WHAT TOWNSHIP?

Permalink Reply by Barry D on September 27, 2017 at 12:23pm

Bonnie,

To my knowledge, Gulf Oil is not working in Belmont County. Could it be Gulfport?

What money are you expecting to receive? Signing bonus?

Why by Oct. 19th?

Permalink Reply by Bonnie Crawford on September 29, 2017 at 9:00am

Hi Brian, Your right it is Gulfport. My mistake. All of the heirs signed a contract and the contract says we will be payed by Oct. 19. Haven't seen any money yet. It makes me nervous waiting for it to come. My husband has 1.388 acres of the 50 acres in total at $4,000.00 an acre. The royalty is 18% part of all oil and any constituents thereof produced and marketed from the leasehold. Do you know what that even means? The effective date goes back to Sept. 2013 and ends Sept. 2018. 

Permalink Reply by Bonnie Crawford on September 29, 2017 at 9:16am

Sorry Barry not Brian.

Permalink Reply by Barry D on September 30, 2017 at 12:26pm

Bonnie,

First, in short, oil gas and other constituents thereof means the royalty covers anything produced and then sold (marketed).

For example, in this area the wells also produce "condensate" which is a constituent.

Without seeing the document signed by you and you husband I would only be able to guess as to why the effective date is Sept, 2013. My guess is the original lease was dated in Sept, 2013 (when some of the other cousins signed) and the company just now caught up with your husband. Again, just a guess and there could be other reasons.

Don't be nervous, forget about it. Some day you may open the mailbox and a check will be in the delivered mail - SURPRISE! Surprises are fun.

Permalink Reply by Dott on September 30, 2017 at 12:59pm

Bonnie, 

I too am guessing without further information.  So a 5 year lease was signed in Sept 2013 and it ends in Sept 2018 unless Gulfport Drills.  If they do not drill by then there may be a clause in your Oil and Gas Lease that says Gulfport can renew for another 5 years at the same signing bonus $4,000.00.  So it sounds like the money you are waiting for is the $4,000.00 an acre signing bonus for the first 5 year contract lease. (Like Barry said Gulfport may have only now found you). The Royalty of 18% would only be paid on the OIL, Gas, and Constituents (Wet Gas Condensate) if you are placed in a Unit and a Well is drilled.  If multiple wells are drilled everyone in the Unit would share what is coming out of the ground. You would get a Royalty of 18% based on your part of the pie which is 1.388 Acres.  If Gulfport Drills a well you will receive what is called a Division Order.  Make sure the division order states exactly what is in your lease and based on the percentage decimal you should receive before signing it.  Once the well is drilled it takes about 6 months to receive your first royalty check.  The checks should come every month after that as long as they continue to service the well.  There will be deductions involved depending on your lease terms.  Some deductions can be quite hefty which can leave you with very little in your check.  Also Oil and Gas companies are known to take more deductions than they are due but some are fair. I hope this has answered all of your questions.

Permalink Reply by Bonnie Crawford on October 2, 2017 at 10:24pm

 Yes, I am waiting for the $4000.00 an acre for first 5 yr. lease. But what makes me nervous is the contract says if we don't get the money by 120 business days then they can send me a letter and decide not to pay me. Is that just a common thing the oil companies put in a contract? Thank you for letting me know about the percentage decimal, as I haven't even heard of it. Yes, this answers my questions. but it is very overwhelming. But it makes me feel better knowing I can ask questions and you all have answers. Yes, i do have a clause that they can renew for another 5 years. Actually, I had been working with a lawyer from Ohio and he said there was no way we could get any money out of this. That has been about 7 yrs ago. But this lady from Continental land found a clause that said that 50 acres would always remain with the ancestors of my husbands great grandparents. So she contacted me and all the cousins and had us sign the papers and send them to Gulfport Energy Corp. And here we are now.  Bonnie

Permalink Reply by Dott on October 3, 2017 at 4:45am

Bonnie, It sounds complicated for sure.  It sounds like maybe the Oil and Gas Company thought someone else owned the land and paid them the bonus years ago and now they have to pay it again to you because you were able to prove that you are the rightful owner.  They may be reassessing whether the land is important  enough to them to pay the money again to you and your relatives. Just a guess. Things have changed since 2011 many leases were not renewed but things seems to be changing again for the better, however O&G companies are being very selective because so many are financially strapped with the poor decisions they made and prices going down.  But I would expect that if they are legally in this first five years as a lease that they are bound to having to pay you.  It is a their loss that they paid someone else first. You don't have much longer to wait and then you will know for sure or you can contact another Lawyer to get a second opinion.  They usually will take your call and give you some answers for free as a consult hoping they will have your business. But make sure in all of these affairs that you work with an Oil and Gas Attorney.  I made the mistake of using my mom's Trust Attorney when she passed away and I inherited the O&G rights and I paid dearly.  He did not know what he was doing and gave me incorrect advice.  That is before I educated myself which you need to do.  There are plenty of articles online that can help you understand the O&G business. 

Permalink Reply by Bonnie Crawford on October 5, 2017 at 5:29pm

I got my first royalty check today. Yea ! I called the land corporation lady and ask her why it wasn't the big amount. She said I would get division order papers to sign and then I have to wait 120 days again to get paid. I don't have a oil and gas attorney. The only person i have worked with is the land corporation lady and she only answers questions that I have about what we will receive. But i did have an attorney in Belmont helping us before but he said we would never get any money. then the land corporation found the clause saying that 50 acres would always stay in the family. What is the most important thing I should or should not do? Thanks, Bonnie

Permalink Reply by Dott on October 6, 2017 at 6:04am

Bonnie who is this Land Corporation Lady? Is she a middleman from brokerage land corporation who buys Oil and Gas Leases, finds owners and takes a percentage of the profits or is she with Gulfport? It seems to me that you need to at least find our some of the basics.  1. What is the role of this Land Corporation?          2. Who pays them?  3. Are you due a Bonus Check?  4. What is the name and location of the well if one is drilled?  5. The first check you received what is is for? ( Over the years I read that if you cash a first check without knowing what its for and if it is the correct amount that it could change the terms of your lease but I don't know if that statement is true or not). At first you said you did not know if there was a well and then you said you received a royalty check.  Are you should it was a royalty check and not a bonus check that had been due to you all along? You certainly need more information to go forward. To gather all of this information ask hard questions to the Land Corporation as well as calling Gulfport. Oil and Gas companies usually have "Landowner Liaison Departments". If you had an Oil and Gas Attorney he could find all of this out for you and let you know what is going on and what SHOULD be happening.

Permalink Reply by Bonnie Crawford on October 12, 2017 at 6:59pm

Hi, The land lady works for Continental Land Resource. I called and ask her if she gets paid a percentage for working with us and she said it is her job to find people who get money from their mineral rights and she only gets paid by the land company. The check I got she said was a bonus check and I will get the big amount when i sign the division order that Gulfport will be sending me. So I  guess, she is helping us get what we deserve. Everytime i call her she is very helpful in answering my questions. I have contacted a lawyer that we used in the beginning after finding out about the minerals. Bonnie

Permalink Reply by Dott on October 13, 2017 at 9:49am

Bonnie,

Reading the website for Continental Land Resources it sounds to me like they are like the Landman that contract out to the Oil and Gas companies to help them get leases signed, find out who really owns the land, gets documents signed by the Mineral Owner etc.  Some can be helpful but they are not your Friend so tread carefully.  They work on behalf of Gulfport. Usually you get the entire bonus money in one check and then once a Well is drilled and producing you will get a Division Order to sign. Then about 6 months later you will receive royalties. So I don't know what the BIG amount is that she is talking about unless she thinks the Well is a huge producer and you will be get a Big Royalty check.  But be clear that is not always the case after Gulfport takes their deductions. Again, don't sign the division order until you check with your Oil and Gas Attorney. Run all of this by him because he is the one who should be on your side.

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