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Old Flat Rate Oil and Gas Leases

Updated on June 27, 2017

Non Producing Gas Well

Non Producing Gas Well
Non Producing Gas Well

Educate Yourself on Flat Rate Leases

The main question is "How do I start learning about what I have". First, remember that no matter how much money you throw at this issue or who you hire, no one is going to give the amount of care and concern that you will personally. So prepare to do most of the work yourself if you want all of your questions answered.

In one afternoon you can get online and uncover a vast amount of information concerning the lease and or mineral interest. Of course this is the easy work but it can still be rewarding and maybe even peak your interest a little more in your mineral interest.

You will never know if there are problems with the old flat rate lease you acquired until you do your research and fully understand what you have.

Cabell County Assesor

Source

Where to Start Looking

First you need a name. The person who willed or gifted you the mineral interest is a good place to start. Take that name and go to the State and County Assessor's office website the mineral interest or lease is held and see if there is any information on that person owning any lease or mineral interest. Make a copy of all the documents you find. Pay close attention to:

  • Ownership
  • Ownership history
  • Address
  • Sales
  • Sales history
  • Legal description
  • Deed book and page number
  • Assessment

All of this information will give you a great starting point. Again, be sure to make copies of the webpages so you can look back at them later. You will be looking at them many times, trust me.


Property Taxes

Property Tax
Property Tax | Source

Check for Taxes Paid

You should now have some names, legal description and if you are lucky maybe some information on a prior sale or deed book and page number.

Take the information you have learned and go to the website for the tax office of the state and county where the mineral interest or lease is held. Be sure to enter every name you found in your search at the assessor's office.

Here you will check for:

  • Owners name
  • Address
  • Legal description
  • Taxes paid or due
  • Deed book and page numbers

Pay close attention to the taxes due. If there are taxes due and you are sure you own the real property, pay those immediately. This will keep your mineral interest from being sold to the state for nonpayment of taxes and eventually auctioned off to the highest bidder at a tax sale.

Also there is a difference between owning a lease royalty interest and a mineral interest. You may own one or the other or both here you will be able to determine that here. Oh, make copies!

Deed Books

Deed Books
Deed Books

Do a Complete Title Search

This task may be difficult, you may not live close to the state and county where the deeds and BCL's (bonds, contracts and leases) are located. You will have to physically go to the records room of that state and county and begin the long process of uncovering all the documents associated with the lease and mineral interest.

Things you will need to bring with you:

  • All of the documents you made copies of.
  • Laptop computer with charger.
  • Money for copies of the documents.
  • Bifocals (I needed mine).
  • Water

Most County Clerks that work in these record rooms are very helpful and will briefly guide you through the process of getting started but some won't. Keeping that in mind I will give you some guidance.

There are two ways you can start. If you were lucky enough to have located a book and page number your golden. Go find the book turn to the page and begin your search. Look in the margins of the page number as most of the documents are cross referenced with the preceding document.

If not take the last name of the persons you found in your earlier work and the dates, more specifically the year and look for the person in the Gran-tor or Grantee Catalog books depending on which end of the deal they ended up on.

If you get hung up you can and quite frankly will return to these books often they are the backbone of the records room.

There are also will books if you have a will book and page number. Do not overlook anything even court documents. Someone in your chain of title may have acquired your mineral interest by special commission or court order.

Most title searches produce a lot of information depending on the amount of years you have to go back 50, 75 or even 100+ years. My advice to you is, work two days in the courthouse gathering records then go home or go back to the hotel take a break for a day or two then sit down and revisit the documents. This will give you a better perspective on what you have found and I bet will produce a lot of quality questions.

You will make mistakes like, missing a document in the order or even perceiving a document as one thing when it clearly is another. Read every document in its entirety.

Chain of Title Form

Chain of Title
Chain of Title | Source

Parallel Title Searches

During the search for your mineral interest deeds and or leases you could not have helped but to come across surface deeds and maybe even some right of way sales. You will need to also make copies of these documents. While you are there you may as well get all you can get.

You will have questions that need answers but if you don't complete these parallel searches you will not have a complete picture of what is going on. When you are done in the courthouse records room you will have multiple chain of titles:

  • Surface chain of title
  • Mineral interest chain of title
  • Lease chain of title
  • Operator chain of title

Fill out a Chain of title form. This will help towards keeping everything in order.

Held By Production

Held by Production
Held by Production | Source

Problems With Flat Rate Leases

To be honest with you I find most flat rate oil and gas leases to be unfair. Most do not benefit anyone except the oil and gas companies. But examine your flat rate oil and or gas lease closely for discrepancies.

Older oil and gas leases where more concerned about shutting the gates and not letting the cows out. Today we have "Pugh" clauses and what not. Older flat rate leases are pretty simple. Look for answers to things like:

  • Is there a "HBP" clause (Held by production)?
  • Where there any changes and or modifications to the original lease?
  • Is there still production from the wells?
  • Where the gas wells drilled during the primary term of the lease agreement?
  • Is the well even on your mineral interest?
  • Has the well been plugged?

WVDEP
WVDEP | Source

More Quality Resources for Flat Rate Leases

There are plenty of quality online resources that will help you answer the questions from the previous paragraph. I am using links related to West Virginia but most states also have the same resources.


Non Producing Gas Well

Non Producing Gas Well
Non Producing Gas Well

Are There Flat Rate Lease Issues?

Is your flat rate lease held by production? With the information I have given you here you will be able to make that assumption and understand your lease a little better. It is a lot of hard work and will take a lot of time maybe even years as it did me.

If you are like me and hate the ideal of hiring someone to do what I know I can do better than good luck with your project. Take your time and exhaust all of the free resources available to you when you have questions then spend your money. It will make the questions you ask your attorney worth the money you pay him if indeed there is a problem. .

There are so many different directions your search may take you so don't just rely on what I have put into this article as the only way. It was designed to get you going and to peak your interest. You may through your surface title search be able to pull up where you mineral interest is on an assessors map web portal. You may want to check the latitude and longitude of the well location on your mineral interest.

Again good luck with your search and I hope this article has given you some good basic information to help you get started.


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