By: Tony Watterud, CMM, AVP Trust Officer
It’s common that when a grandpa, grandma, uncle or aunt die, the children or grandchildren are faced with the challenge of sorting through the family Oil and Gas Mineral Ownership. This can be a daunting task for anyone not familiar with the family history and the oil industry. We commonly hear things like “Frank always handled all that! We knew they had Oil interests but didn’t know much about it!”
There are some very important things to know when it comes to Oil and Gas Mineral Ownership.
- Know what you own. How many net mineral acres? Where are they? Are my minerals leased? Are they producing?
- Know who to ask. Who are the leasing agent and the oil company contacts? What state agency can I contact with questions? What associations can help me?
- Know what is going on in your area. Are there producing wells around me? Is there current leasing activity? Are my minerals in a hot spot or along the fringe? Into what formation are my wells drilled? Am I being paid fairly?
- Know what your lease says. What is my decimal ownership and is it correct? What percent does my lease say I should be getting? What is the term of my lease?
- Location of important documents. Do I have the lease, division orders, maps?
- Know that you must be vigilant. Don’t be complacent. There are countless stories of those who just cashed their checks and were underpaid many thousands of dollars. Companies may not have to pay you if it’s beyond the statute of limitations and/or they may be holding money in suspense due to a title issue.
- Plan for what the future may bring. What to do with the money? How will I be taxed? How will my revenue be affected with regard to the well’s decline curve?
- Know the difference. Are my minerals a royalty interest or a working Interest?
There are just a few examples of the information needed to effectively manage your Mineral Ownership.
Mineral ownership can be complex, but it doesn’t have to be a mystery. First Western Bank & Trust’s Oil and Gas Management department has the strategic partnerships to manage these minerals efficiently and economically for your family. We offer revenue processing, division order verification, research on suspended funds, electronic document maintenance, mapping of wells and mineral interests, online access, or to just call or stop in to visit with us directly.
At First Western Bank & Trust you can bank on us for your Oil and Gas Mineral Management needs!