royalty controlled by others
I have 2 pieces of royalty for which another mineral owner has both the rights of negotiation and is recipient of bonuses. Does he have a fiduciary right to act on my behalf as he would for himself? Also, his right to receive bonuses was conceived in a 1948 lease when bonuses were $ 2 - $4 per acre. How can the bonuses of today be legal with the four figure numbers? He has negotiated a lease for which I have not received any copy thereof or any communication(s). I am most interested to know if such happenings have occured before in WV in the current leasing atmosphere and what the outcomes have been. Ann Day
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Permalink Reply by Dexter Green on -
He has no fiduciary duty to you unless there was an explicit agreement at the time that the royalties and minerals were severed. The mineral owner could conceivably have chosen to sign a lease with the lowest possible royalty in order to increase the bonus and there is likely no recourse that you could have.
Additionally, as an owner of the royalty interest you will be supplied with a copy of the lease upon request and be responsible to sign any division order(s) in the future. Since you are not the fee mineral interest owner your role is merely that of a collector of revenue generated from the well(s). As you have no executive rights over the mineral estate you are not entitled to be part of the leasing process.
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