Partial Mineral Rights Ownership

[tsland]

In Texas.

I have 8 siblings, each of us inherited 12.5% ownership of our parent's mineral rights estate on a 200 acre tract of land. The surface is owned by a nonrelated party.

3 of my siblings have signed a mineral lease with energy company #1, for their percentage of ownership (37.5%). Thier lease gives energy company #1egress/ingress to the property.

The remaining siblings have not signed a lease.

Questions:
1. Can the energy company #1 drill without having 100% of the mineral estate ownership leased to them?

2. If the remaining 5 siblings sign a lease with energy company #2, which includes a surface waiver to the current surface owner, restricting the energy company #2 from drilling on the surface of the property. How will this affect the first 3 siblings and the lease with energy company #1?

Thanks in advance.

[Mr. Knowitall]

1. Can the energy company #1 drill without having 100% of the mineral estate ownership leased to them?

Probably not, but I can't read the title from here. If the energy company has told you "we can't drill without having 100% of the mineral estate ownership leased to us", that's probably in fact the situation.

2. If the remaining 5 siblings sign a lease with energy company #2, which includes a surface waiver to the current surface owner, restricting the energy company #2 from drilling on the surface of the property. How will this affect the first 3 siblings and the lease with energy company #1?

Essentially the same answer.

[mudpie]

No they can't. However, once they have a lease with several owners, they usually go to court and force a "pooling" upon the other mineral owners. It is a strong arm tactic, but legal. They have very deep pockets as owners usually do not. You will get paid eventually, but not what you want. Be aware, if your own 12.5 percent (1/8), that is 1/8 of the net lease amount, not the gross amount.

For instance, say the court awarded lease states that the mineral owners get 2/8 of the net production of a well. Your share is 1/8 of the 2/8 lease, usually after costs are deducted. Not much but a rough estimate.

The surface rights owners would have to also convey an easement for access and the taking of the land around the well. They may also get a cut of the production as well.

[Barbieo]

Not sure if you're still working through your mineral rights issues, but wanted to add that based on my recent experience, the previous posts reflect the laws in Alabama, however, the laws are different in each state. Just yesterday, I found the agenda for the next meeting at the Oil and Gas Board, which is where the operators go to request changes to regulations or approval for forced pooling; noticing there were seven different requests for forced pooling by several different oil operators.

My understanding is that the oil company has to show due diligence when trying to find a mineral rights owner. If they are unable to find an owner, they can request a forced pool. The oil operator cannot just request forced pooling because they are unable to get the deal they want, however if they can show time constraints and numerous reasonable attempts, their request will be approved.

Finally, because the government agency that overseas the oil and gas operators get a significant revenue from the oil/gas they pull from the ground; it is in their interest to allow requests. I've been keeping close track on the meetings and have set up alerts in Google to track activity as I do not live in Alabama. Additionally, I've come across a great website setup for mineral owners at www.mineralplace.com.

I hope this helps, and it is not too late. As a disclaimer - I am not an attorney, just a mineral owner.