You are here:

Oil/Gas/Assignments for Oil and Gas Leases

Advertisement


Question
QUESTION: My father just recently passed away and we have found Notarized Assignments made to him for oil royalties but these were never filed with the state.  They do not seem to be the Certified Copy and were given to him in 2011.  Since they were not filed and I have found out the lease holder himself has now passed away should these just be considered void or no longer valuable?  It is not for that much interest but we also want to make sure we are not being taxed on revenues not received.

Thank you

ANSWER: If the assignments were for a share of production from a lease that has seen production then there could be some money there for you. I'd notify the current operator of the well, if there is a well, and tell them about the assignments. Just because they were not filed does not mean they are not valid, though if there was never any production and the lease has since expired they will not be worth anything now, but I would still think that you could collect any funds that were attributable to past production from this lease if there are any.

As for any taxes due, if the company put any money into a "suspense account" for you until they could figure out who to pay they probably didn't report it to the IRS but I'd check with an accountant once you get this figured out. If there was never any production from the leased premises then of course there's no money to be taxed either.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
www.mineralhub.com
The Mineral Hub



---------- FOLLOW-UP ----------

QUESTION: Sorry for asking one of my questions again, we do not have the certified copy of the assignment and the person who assigned the interest/royalties has passed away also we have just found.  I contacted his wife and she has told me that she has no paperwork, that they have done an extensive search to all (not just ours) interest shares given to others and they only located three that were ever filed and my father's is not one of them.  The wife did state where she saw my dad was receiving money based on a loan and the assignments might have been given as collateral and if the loan not paid by a certain date then the assignment might possibly be filed then.  I asked her if there was any documentation of the loan paid in full and she said yes and then some.  I have not seen this yet but I do know the last check for a deposit we found was dated 12 of 2012 and it was deposited right before my father passed this October so it was paid.  I do not know if the check documented "paid in full".

Thank you

Answer
If the assignments were in fact used as collateral for a loan than has since been paid off then of course you shouldn't expect anything from the assignments. Additionally, if there was never a well drilled on that lease then none of the assignments made to anyone would be worth anything. If you knew what lands the lease covered you could check with the state's oil and gas regulatory body to see if the lease ever produced anything, or at least get the lessee's address and contact them to check on this.

That said, most assignments of overriding royalty interest never amount to much money anyway so I would keep that in mind before you go spending a lot of effort tracking this down.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
www.mineralhub.com
The Mineral Hub  

Oil/Gas

All Answers


Answers by Expert:


Ask Experts

Volunteer


Frederick M. Scott

Expertise

Oil and gas leasing, lease negotiations, how to best deal with the oil and gas companies or their representatives, buying/selling mineral rights, forced-pooling, correlative rights, deeds and conveyances, and "post-production" costs. I am most experienced with Oklahoma properties and laws, but am able to answer questions concerning other oil and gas producing states in many cases.

Experience

I am a Certified Professional Mineral Manager (CMM) certified by the National Association of Royalty Owners (NARO) in Tulsa, OK. I am also a Registered Professional Landman (RPL) with the American Association of Professional Landmen (AAPL). I have managed my family's oil and gas properties in Oklahoma for over 10 years and have dealt with many landmen, title analysts, attorneys and other oil and gas professionals in the process. I have written several articles which have appeared in various oil and gas industry magazines and newsletters. I have negotiated and drafted leases, prepared deeds, affidavits, and other legal instruments relating to my own minerals, as well as performed title, legal research, and curative work for same. I have acquired a good deal of knowledge on the subjects of oil and gas law, mineral appraisal, and landwork over the past ten years, and also worked as a professional landman and lease buyer for a time. I've seen the business from "both sides" and therefore feel confident I can help out most of the folks who ask questions in this forum.

Organizations
National Association of Royalty Owners (NARO); American Association of Professional Landmen (AAPL)

Publications
National Association of Royalty Owners "Action Report" (ROAR); NADOA Magazine, The Mineral Hub, Landman Magazine, and several royalty owner association group's newsletters.

Education/Credentials
Certified Mineral Manager (CMM), Registered Professional Landman (RPL)

©2016 About.com. All rights reserved.