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Question
Location: Aransas Pass, Texas  San Patricio County
size: 2/10 acre
lease executed: Aug 12, 1960  By: MOKEEN OIL CO.

This lease was signed by my wife's mother and I remember her telling us she received a small check every month, usually less than ten dollars, then at some point she signed this lot over to my wife, transferred the lease and then we forgot to follow up on everything else.  Now, we are trying to go back and recover any assets outstanding but we are unsure of where to begin.

Answer
You've asked an excellent question, probably the most common question among landowners who have inherited mineral rights or acquired them from inside their family.  Unfortunately, there is no easy answer. But I hope I can point you in the right direction.

Based on the facts you provided, I went to texasfile.com where I have an account and looked at the oil and gas leases taken by Mokeen Oil Company around August, 1960.  All of the leases are what we call "town lot leases" meaning these are homeowners who also own or owned the mineral rights in the land their home is sitting on.  This is why your lease is only 0.20 acres.  All of these small lots would be required by Texas law to be combined, or "pooled" to form an area of land large enough to drill a well on.  Texas requires spacing of certain sizes between wellbores.  This is why your mother-in-law's checks were so small each month.  Even if the size of the pooled unit was as small as 40 acres, she was entitled to (at most) only 0.20 divided by 40.0 times 1/8 royalty (most likely the rate in the lease) or 0.00062500.  By moving the decimal place to two places before the end, you get 000625.00 and read it like dollars: $625.00.  This means she was entitled to $625.00 out of every $1 million produced from the well.  Wells drilled back in the very early sixties in San Patricio County rarely produced more than $3 million over the life of the well.  Oil was selling for less than $1/barrel, and natural gas was selling for pennies per thousand cubic feet.

I have told you all of this to point out first what size of money you might be looking for, so you can decide how much effort it is worth.  It sounds like you don't know for sure how much money your mother-in-law received altogether, so it's questionable whether there is anything remaining to be paid.  More imporantly, the second point is that Texas has a statute of limitations on how long you can wait to try and collect amounts that might be owed.  The statute of limitation that most oil companies follow is the 4-year rule.  They usually agree to pay unpaid royalties going back only 4 years from the date the claim is made, unless they have been holding and accruing funds for the owner and were unable to pay them because there was a legal problem with the title that had to get resolved first, something like that.

The last point I'd like to make is that, because the lease was taken almost 54 years ago, it is almost certain it is no longer producing and has expired under its own terms.  Mokeen Oil Company should have filed a Release of Oil & Gas Lease into the San Patricio County Deed Records, which they or a successor-owner of the lease may have done.  You would need to check county records, searching on the name of the Lessor (homeowner) in the lease to see if one was filed.

After reading all of this, if you are still interested in pursuing this, you could "run the title forward" by using texasfile.com.  Start with finding your lease among those in their database.  Then search all of the Assignments and Releases that have Mokeen Oil Company as the Assignor or Grantor, looking at the Exhibit A of the document to find the Name, Volume and Page of your lease.  Good luck, and let me know if I can help further.

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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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