MineralOwnership.com

No doubt you have seen or felt the economic impact of the “sky is falling” attitude going around this great land of ours now.  You have probably seen the stock market or your 401k plummet in the last few weeks, and those pesky landmen trying to throw money at you so that your minerals can be financial prosperous to you and your family.

Well…those landmen are becoming a little more welcome now that a little extra income coming in is alwasy good in exchange for a few hydrocarbons underneath your house that you will never miss.

A typical homeowner in an urban natural gas play might expect to receive $40-$50 per month.  Think about it.  That adds up.

Let’s assume someone in the Barnett Shale in Fort Worth can expect a conservative royalty for the next 5-10 years.  Also assume $40 per month income from that royalty.  Simple math and some financial calculations show, if you invest that money with an estimated 10% return:  over $8,000 after 10 years.

My advice is simple.  Isn’t a little extra money always a good thing?  In such woeful economic times, every little penny helps.  And to use an old adage, “get while the gettin’s good.”

I’ll step down off of my soapbox now.

If you live in the hotspots of oil or natural gas that are now surfacing, excuse the pun, then you are used to hearing about people signing leases with companies for a percentage of royalties and cold hard cash.

Let me first of all allay the myth that oil and gas companies won’t just drill under your property whether you sign or not.  Oil and gas drilling is regulated, in most states, by the railroad commissions in those states.

Now that we got that out of the way…

For much of the new gas deposits in the United States, the trapped gas is held within rock formations that have only just recently been profitable drill locations for oil and gas companies.  That being said, a local property owner will not usually have the financial means or acreage necessary to install their own drill.

So, what are some of the reasons that people don’t sign mineral leases for mineral rights?

• Environmental concerns over the somewhat fledgeling horizontal urban drilling techniques
• Noise and eyesore annoyances
• Length of mineral lease
• Encompassing mineral leases covers surface to the core of minerals instead of individual earth stratas to increase income potential

In my personal opinion, with the current economic situation, you shouldn’t let a financial opportunity like this pass you up if you can help it.

If you live near any of the natural gas deposits contained in shale, then you probably already at least heard of the Barnett Shale. However, I’ll attempt to concisely inform my only consistent blog reader, my wife, what and where this natural gas deposit is.

The Barnett Shale

Now for the amazing figures and facts:

• Signing Bonuses PER ACRE have now gone above $25,000 and royalties around 25%.
• Although the US Economy is drifting toward a recession, the DFW local economy and job market is booming similar to the Texas oil boom of the 70’s and 80’s.
• Some predictions have estimated consistent production for at least 10 additional years.
• Don’t be surprised if some major events, sponsored by oil and gas companies, are soon heading to the Fort Worth area where money seems to now grow on trees…errr…at least under them.

Don’t forget to email me at admin@mineralownership.com with any suggestions and comments.  And…don’t forget that you can leave a comment too.

August 21, 2008

The mysterious Title Search

You see, when you buy a house or sell/buy mineral interests/rights…a title search will be performed somewhere in the process.

Let’s employ the grade school technique of the five W’s:  who, what, where, why, and when.

Who:  Some landman or Joe Shmoe like me.

What:  The title search is the tedious process done by someone like me to ensure there are no looming creditors or Uncle Sam’s tax collector ready to get their piece of any money made upon the sale of a house or similar event.

Where:  Title searches are completed in the cities and counties that the land/home is in.  Dirty and dusty, and I do mean dirty, archives and records are perused to collect the entire picture or story of the land, home, or mineral ownership.

Why:  Without title searches, interest in the property or minerals could be lessened or completely revoked by parties (IRS, Mortgage holders, and contracted laborers with materialman and mechanic’s liens.)

When:  Title searches are performed before home closing, for reasons listed above, and before mineral leases are signed.

Bonus “W”:  Who pays for the title search?

In real estate, the home buyer usually pays for the title search as part of the closing costs.

In mineral leasing, the drilling company will pay the cost, gladly I might add, for the title search for the “buried treasure” that sits under many homes and acreage across the U.S.

Well, to quote a wise pig…th-th-that’s all, folks.  See you next time with the next blog on the world of exciting and enticing Lease Bonus Checks.

Welcome to MineralOwnership.com! 

This is a brand new website and my first attempt at blogging, so please enjoy and bear with me through the normal growing pains.

This blog is going to be dedicated to the questions and answers that arise from the boom in the energy industry that has resulted from the rise in oil and natural gas.  Hopefully, this blog will be useful tool to help you understand more about mineral rights and mineral ownership.  My goal is to make some of the legal mumbo jumbo less obtuse and more easily digestible.

          Before we get down to business, here is a little about me first.  I work in the oil and natural gas industry, and I am familiar with many of the administrative aspects of mineral rights, leasing and royalties that are of interest to many people who not only live on many acres, but live in a suburban utopia.

          I’m going to start this blog off with a list of some of the future blog topics I will cover that should offer more help when dealing with the oil and gas business:

·         Title Searches

·         Royalties

·         Oil and gas leases

·         Bonus check

·         Estates and wills

·         Importance of contiguous acreage

·         Liens

·         Judgments and Tax Liens

·         Warranty deeds and Deeds of Trust

·         Subordination

·         Subrogation

·         Affidavits

Whether you are in the Barnett Shale (Texas), Haynesville Shale (Louisiana), Marcellus Shale (Pennsylvania), or in one of the many other oil and gas hotspots, this is the blog for your inquiring minds.