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Oil/Gas/Mineral Deeds and Royalty Interest

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Question
My ancestor was one of 4 men who purchased the mineral rights on several different properties in 1865. One of the properties was ruled a mineral deed by the oil company. Ownership has filtered down so that I have a small interest .00031828 on 300 acres of the land ruled a mineral deed.

One oil company did the research to find out who the heirs were of the original 4 men that owned the mineral deed. They obtained leases from some of the heirs, but not all of the heirs were located. They then sold the leases that they had to another Oil company.

What concerns me is that the second oil company that I signed a lease with had already been drilling and producing on that land 3 years before anyone bothered to trace the present owners.

My 2 questions are as follows:

1. Since no one knew who the present owners of the mineral rights were, and the oil company did not bother to try to trace the families to the present owners, shouldn't the oil company have at least put money aside in the name of each of the original 4 men that purchased the mineral rights? If that was something that they should have done, who would hold that money until the heirs were found?

2. If the agreement with the landowners is not ruled a mineral deed, but it contains language that gives mineral rights to the heirs and assigns of the 4 men. Should they receive royalties?

Answer
You seem to be on the right track.  In many states, royalty payments are sent to the state unclaimed property fund if the royalty owners cannot be found.  Yes, if the mineral deed is the basis for drilling, then the heirs should receive royalty payments.  

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Mark Bonner

Expertise

Interests include oil and gas leases, mineral deeds, royalty payments, interest on late royalty payments, post-production costs.

Experience

I have been an attorney for over 20 years.

Organizations
Norman & Edem, PLLC 127 N.W. 10th St. Oklahoma City, OK 73103 405-272-0200 (Tel.)

Publications
Oklahoma Bar Journal; Oklahoma Association for Justice Advocate

Education/Credentials
Highest Honors, OU College of Law, 1992 Earl Sneed Award for Oil & Gas

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