Freeholder Mineral Rights

[ken1989]

My wife's family have mineral rights on land that has producing gas well. Well has been in production since 1974. They received monthly royalties until 2012 at which time the well operator changed and royalty payments stopped.
I obtained well production data from the AER (Alberta Energy Regular), the present well production is not much different from years gone by.
I have gone thru info on the web on Freeholders Mineral Rights - sounds like our problem is a common problem.
I would very much like to hear from someone who has information to steer me in the right direction on how to resolve this issue. Thank You.

[oilngas]

Ken; tricky question, the first assumption I would make is that resolution will likely end up in some formal legal solution if there are sufficient funds owed to make pursuit worthwhile.

If I was you I would hire a Geomatics or Engineering Consulting Co. to establish the validity of the freehold Royalty i.e. are the Freehold Minerals reflected on the title today i.e. are you on the minerals title. Then are those rights specific to the well production? i.e. is the production from the same zone as the Freehold applies too? Is the freehold for only Nat. Gas? Liquids?? What are the allowable deductions for production costs etc.

Then I would try and get a record of the official history of the wells ownership, i.e. who really owns the well, operates and reports the production, looks after the well, who are the partners in the well etc. Then I would gather the history of payments to you and match the well production to payments since day 1.

In addition I would gather all the papers you have re; the mineral title and compile the history of that up to present day. Personal aside; often these freehold rights and who is owed what are so fractured a history is impossible to accurately obtain.

If it then looked like you had a valid "claim on the production" and monies were owed to offset the hassle going forward, the well operator was solvent then i would employ a "Petroleum Land Person" that specializes in Freehold to evaluate the data and information you and your team have gathered.

[Cement Bench]

U only have mineral rights if U owned the land before 1905
legal case is called turta CPR v turta cannot remember

[Grizzly Adams]

U only have mineral rights if U owned the land before 1905
legal case is called turta CPR v turta cannot remember

Could be wrong, but a lot of people owned mineral rights into the 30s. Then it was a case of paying a fee to keep them or surrender them. Most people couldn't see the sense of hanging onto them, so they surrendered them. Who'd a Thunk ? :lol: I know a guy who still gets a tidy cheque every year, even though he sold the land .

Grizz

[Cement Bench]

my point is that land titles searches have to be able to trace private ownership back to 1905,

if the land was originally deeded or titled to,a private citizen after 1905 then u r out of luck
that means when a title was created from mere crown untitled land

carry on

[makin tracks]

is the oil company still operating the well? yes, find your paperwork, get to a lawyers office asap, you may be loosing a chunk of money, if lawyer says you are still golden. contact oil company, find out what is what? if they don't resolve. you could likely shut well off, block well access and start legal proceedings,

calling lawyer and oil company is what i would do , first

[sweld]

Sounds like a good gas well if it’s still producing after 45 years. First thing I would do is block access till you get some answers.


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[gevarm guy]

If the well is still producing their must be an operator looking after it, do you have mineral and surface rights if so you should be paid for both. Anyway before you go spending money on lawyers and such, maybe just take the time to talk with the operator of the well and see who owns it. Somebody is paying him.
Maybe a problem with paperwork when companies changed hands, maybe something got lost, who knows. Quick call costs nothing.

[hal53]

If the well is still producing their must be an operator looking after it, do you have mineral and surface rights if so you should be paid for both. Anyway before you go spending money on lawyers and such, maybe just take the time to talk with the operator of the well and see who owns it. Somebody is paying him.
Maybe a problem with paperwork when companies changed hands, maybe something got lost, who knows. Quick call costs nothing.
^^^This.. it could be something as simple as a clerical error when the new owner took over the well and the royalties have been paid to the Gov't. instead of the rights holders

[Deer Hunter]

^^^This.. it could be something as simple as a clerical error when the new owner took over the well and the royalties have been paid to the Gov't. instead of the rights holders

Don't think so... The govt bills royalties based on the well on their lease.

Freehold royalties can be complicated as they are often split between several family members. Likely someone has been getting your share of the royalty.

[hal53]

Don't think so... The govt bills royalties based on the well on their lease.

Freehold royalties can be complicated as they are often split between several family members. Likely someone has been getting your share of the royalty.
Yup...and when the data input people were transferring the wells into the new owners system, all it would take is to click on "crown" instead of "freehold"

[oilngas]

hal; that's why I suggested he / she look for all the paper on the Freehold Mineral lease and who they did a deal with to divest such lease for a Royalty interest or what ever. I have looked into a few of these Freehold deals and they have been so complicated and undocumented we never did develop a drilling deal.

Typically uncle Bob or whatever did not register interest changes on the title.

We did inherit a Freehold deal @ 1/8th. on oil, for a full 1/4 section DSU and after numerous phone calls, just put the Royalty interest monies minus deductions in a trust until the numerous owners sorted out who owned what.

[gevarm guy]

With the price on natural gas this maybe why you don't get any more payments.

To encourage the building of gas facilities and the development of markets for the Crown’s natural gas, the Alberta government implemented what has come to be known as the gas cost allowance (“GCA”) system. Under GCA, companies producing gas from Crown lands are allowed generous deductions for their costs in making the gas ‘market ready’. Deductible costs include all costs to operate gas gathering and processing facilities (including a 10% overhead allowance), annual facility depreciation on a straight-line, 20-year basis, and a 15% rate of return on average invested capital. Although in most early forms of freehold lease agreement, the freehold owner reserved a “gross royalty on all leased substances produced and marketed”, for various reasons royalties on gas produced from freehold lands have also been subjected to deductions for the costs of making the gas ‘market-ready’.

[ORV]

My wife's family have mineral rights on land that has producing gas well. Well has been in production since 1974. They received monthly royalties until 2012 at which time the well operator changed and royalty payments stopped.
I obtained well production data from the AER (Alberta Energy Regular), the present well production is not much different from years gone by.
I have gone thru info on the web on Freeholders Mineral Rights - sounds like our problem is a common problem.
I would very much like to hear from someone who has information to steer me in the right direction on how to resolve this issue. Thank You.

My wife does this for a living for an oil company
p.m. incoming