There are several factors buyers will consider when valuing mineral interests. The location of your mineral interest is a primary factor and depending on the geology in an area, oil and gas may be easy or difficult to access. Further, current oil and gas commodity prices greatly affect the value of your mineral interests.
The conveyance granting you the interest may state a certain number of mineral acres being conveyed. Sometimes the amount noted is incorrect. There are many possibilities as to why the amount noted is incorrect. For example, the amount may have been copied from a prior conveyance that split that interest amongst multiple parties or there was typographical error in the document. An examination of the records should determine the amount of interest you own. You can have the amount verified by a title attorney or petroleum landman.
The question of whether to probate an estate in Oklahoma is a complex one that will need to be determined by an Oklahoma attorney. If you own the surface and minerals, it is likely you will need to probate your relative’s estate in an Oklahoma Court. If the mineral interest has been “severed” from the surface interest, Oklahoma does provide a statute (16 O.S. § 67) that permits the filing of an Affidavit of Death and Heirship. To be effective, the Affidavit of Death and Heirship must meet all of the statutory requirements and should include the information set forth in the Oklahoma Title Examination Standards. In addition to including the necessary information, the affidavit must be filed of record in the county where the mineral interest is located for ten years before it will establish marketable title to those mineral interests. Oil and gas companies often obtain and rely on these affidavits of heirship when leasing minerals; however, many companies who purchase minerals want the estate probated if the affidavit of death and heirship has been filed of record for less than ten years or if it fails meet the statutory requirements.
A lease bonus is the cash consideration paid by the company taking the oil and gas lease (the lessee) to the mineral owner (the lessor) for the execution of an oil and gas lease. It is typically based on the amount of interest you own.
Royalty statements are the basic accounting documentation that oil companies (also called “Operator” or “Producer”) mail to royalty rights holders to show the amount, month and the year that the royalty rights owner is entitled to production from a producing well.
A royalty owner is entitled to a proportion of the amount of oil and/or gas produced from a specific well. A division order is the document in which the Operator (or First Purchaser) and the royalty owner agree on the amount of ownership interest (Net Revenue Interest or NRI) owned within a well, lease or unit.