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Question
Thank you in advance for your assistance! I live in North Carolina. Recently, I received an invitation to sell my mineral interest in Panola County,TX. from Anthem Oil & Gas, Inc. This reminded me that I once received a royalty check. My mother was  co-executor of my Aunt's estate. The will was probated in North Carolina and a notarized copy filed in Panola County. My mother passed away in 2000. I was not aware of her mineral rights until several years later. The other co-executor informed me in 2007 that I was due a royalty. She gave me the telephone number of the company and they ultimately sent me a check for $100.00. I can't recall the name of the company. Since that time,there has been no communication from anyone. The co-executor is almost 90 and can't recall much information to help me. I have copies of the lease agreements from a recent download from Panola County. I don't know how to tell where the well(s) are located or even if they are currently being operated.  The last known operator was Costilla Energy in Midland,TX. I think they declared bankruptcy. The only information that I can understand other than the county location is: South 30 acres of the West half of Block 12 of John McAdams Survey A-422 and McAdams Survey A-436. I'm not sure, but I think the lease is in the name of Edens. Where is the lease number located on the document? I need help finding out what I should do. Any information is most appreciated!

Answer
Let me begin by saying that the decision to keep, or sell, your mineral rights in Panola County, Texas must be your decision and yours alone.  All I can do is give you some information that might help you make that decision.

First, Costilla Energy didn't declare bankruptcy, they sold to Dominion Oklahoma Texas Inc. (or L.P.) pretty much everything they owned in Texas, in about 2003.  Dominion OK TX Inc. later merged into Louis Dreyfus, which later merged into XTO in Fort Worth.  All of that said, the production from current wells is not the best indicator of future value of your mineral rights.  Also, you should check the NAUPA website at http://www.unclaimed.org/ to find out if the majority of your royalties got paid over to the State with proper jurisdiction since the payer probably didn't have an address for you or your mother for at least some of the time the well(s) produced.  Check Texas, North Carolina, Delaware, Nevada, and California in the NAUPA website.  The money could have been paid over to any of those state because of unclaimed property laws.

But think about future value: how do you determine that?  This way: if the property has a history of producing at any time in the past, it was done using vertical or directional drilling.  Penetration in the subsurface interval containing the oil and/or gas was very limited by these methods, and these types of wells leave a lot of production still in the ground on the day they are plugged and abandoned as no longer economical.  That's why horizontal drilling today is so valuable.  Companies are looking for old wells no longer producing very much, or even plugged and abandoned, and they are re-entering them to drill horizontally straight through the producing interval.  A horizontal well can end up producing the same amount as the original well, because often that is how much production gets left in the ground by a vertical or directional well.

So what is your land worth?  Visit the website http://www.texas-drilling.com/panola-county to see what drilling history Panola County has had from 1991 through March, 2014.  This information may be helpful to you in making a decision whether or not to sell.

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Marsha Breazeale, M.Ed., CDOA, CPLTA

Expertise

All questions regarding division orders; ownership decimal calculations; title ownership and payer record changes (testate/intestate inheritance; deed; assignment; court order); oil and gas lease analysis for record-keeping and purposes of payment by operator or payer; pooling, horizontal wells, horizontal well allocation units; unclaimed property reporting; royalty owner relations questions. All questions concerning administration of surface land contracts and payment questions, such as for Surface Right-of-Way, Sub-Surface Right-of-Way, Easement, Surface Use Agreement. All questions regarding industry-standard and company-specific policies that affect land owners.

Experience

Sr. Staff Division Order Analyst. Certified Division Order Analyst (CDOA, National Association of Division Order Analysts) and Certified Lease Analyst (CPLTA, National Association of Professional Lease and Title Analysts) with 35 years of experience as a combination division order analyst and lease analyst in exploration and production in the oil and gas industry.

Organizations
National Assoc. of Division Order Analysts (NADOA), National Association of Division Order Analysts (NALTA), American Association of Professional Landmen (AAPL), American Society of Trainers and Developers (ASTD)

Publications
"How an Oil & Gas Exploration & Production Company Operates" and "Principles of Oil & Gas Lease Analysis: Standard Clauses", Oil Patch Press; Articles in NADOA Magazine; LandFocus EDU Professional Training Manuals

Education/Credentials
B.A.in Management from Our Lady of the Lake University in San Antonio; M.Ed. in Instructional Design from WGU Texas.

Past/Present Clients
Past 15 years: GeoSouthern Energy Corporation; Contango Oil Co./Crimson Exploration & Operating Inc.; Apache Corporation; BP America; Marathon Oil; Newfield Exploration

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