MRP 290: Listener Questions June 2025

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MRP 290: Listener Questions June 2025

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In this month’s episode, we tackle listener questions submitted by Caroline, Nancy, Anita, Terry, Humberto, Rebecca, and Jason covering inheritance challenges, tax strategies, emerging lithium opportunities, and practical lease evaluation tips.

As before, many of the questions in this episode are covered in more depth in my Mineral Management Basics online course, including how to read a legal description, perform a title search, identify nearby oil and gas activity, and determine whether you should be getting paid on a well. 

Thanks again to everyone who left a review or who submitted a listener question!  If you have a question about your minerals or royalties, you can send it to feedback@mineralrightspodcast.com!

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Listener Question #1

Hello Matt,

I have been listening to your podcast and looking at the Mineral Rights Forum recently as I try to figure out our father’s oil and gas leases. Our father died a couple years ago and I’m just starting to figure out these investments. I’ve contacted the operators I can find and submitted an affidavit to Canadian Co, Oklahoma, where all of the holdings are located to start the process of transferring the mineral rights from our father to my brother and me. I’ve even been looking up properties and wells on the OTC website. However, I just do not understand the 1993 Assignment of Oil and Gas Leases deed from Canadian Co clerk’s database. Even after listening to various episodes of your podcast and talking to operators and the clerk’s office, I don’t understand, what exactly our father’s lease means. For example, does he have rights to all wells on a certain piece of property or only to the well named? And what kind of rights does he have? And since he/I did not manage these investments at all for close to 20 years, are we missing out on some money?

Can you help me?

Thanks.

Caroline

Listener Question #2

We JUST SOLD [our interests] to a land company. How do we figure capital gains? I’m told I inherited these in 1988 when my father died.  I am going to need an appraisal according to my accountant. Hopefully we won’t have to pay 100% capital gains. I would like more information as to how to approach this.  i will gather the info concerning the legal description  from JRS Land company along with the amount we got for selling our right to them. 

Nancy

Listener Question #3

Matt,

I think your Action Items for Mineral Owners may have answered a question I have about leases and lithium. Is it only new leases that can take lithium into account, or is there something that could be filed now when deeds reserve “oil, gas and other minerals” and leases are for the following:

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Our minerals are in Oklahoma.

Anita

Listener Question #4

Hi Matt,

Thank you for reaching out. I am a mineral owner who has inherited multiple mineral rights from previous family heirs. “My urgent need” is to understand a proposal from an oil production company to remove language in our current (inherited  lease) that would allow an ‘allocation well,’ even though we already have provisions for pooling wells that are currently producing. As I live in a different state from where the oil lease is located in Texas, and local lawyers have been unable to assist with the lease review. Therefore, I am trying to educate myself on whether allowing this change would be beneficial without the support of lawyers. Do you have any information on “pooling” vs “allocation” advantages/disadvantage resource tools that can support my learnings on this topic?

Once above is resolved, I will begin a title search to realign and identify my ownership of multiple mineral interests. I received my inheritance in various stages of my life, and I am now at a point where I need to ensure all my ownership documents  (title, deeds, leases) are in order. The “title” search podcast is what sparked my interest in joining your group as I know it would be beneficial as I perform these activities. Look forward to reviewing your podcast list.

Warm Regards,

Teri

Listener Question #5

Good day Matt,

I’d like to ask if you have any information on minimizing the amount of ad valorem taxes I have to pay the county on my oil and gas royalties? Is there a formula I should check to see if the county is calculating what they are billing me is correct? Any way to protest these taxes like we do for our home property taxes?

Thanks   

Humberto

Listener Question #6

Hey Matt – I found your podcasts on recently have been listening in.  Very interesting stuff.  I’ve already learn some new concepts. I work stateside for Louisiana.  I’m in a state office that managers the state’s mineral assets much like other state land offices although we were  separated from the Louisiana state land office many years ago.  We handle the leasing, enforcing the lease terms, participation in unitization, creating the state royalty deck, tracking wells with state participation, negotiating voluntary units,  etc. . . Most of the terms that you use on your podcasts are quite familiar although some are a bit different.  I take a few calls a week from private mineral owners who ignorantly are told by the parish assessor office that the state can tell you all about their mineral rights.  I’m amazed at the ignorance of the parish officials.   The ignorance is equally shared with the Louisiana oil & gas commissioner staff.  Since they are regulatory so they keep “in their lane” as to what they know about mineral rights which is very little.  My staff and myself have a knowledge base that most within the Dept. of Energy and Natural Resources lack.  Most calls have been forwarded several times before they get to me.  As a public servant to the taxpayers, I feel lead to take the call and hear their story.  My predecessors never took the time to take such “calls” but I like helping people and it breaks the monotony of my regular duties.  I always begin my conversation with a reminder that private minerals is not a public thing (i.e., not the responsibility of the State).  I find that most folks just want someone to explain to them in simply terms  – what is lease? why aren’t they receiving a royalty check after a parent dies?, who operates the well where they own minerals, what is a royalty, prescription for non-use, a division order, etc.  I usually ask them for a S-T-R and use the state’s SONRIS oil & gas system to locate the wells in the and nearby.  Determine if the wells are unitized, who operates the wells what is the current production, find the unit field order and the unit tract ownerships.  Most of the time they are astounded that someone in either local or state government actually provide them with information and a bit of guidance.  I usually end with – call the operator to speak to the owner relation group, share some of the information that I gave you,  if the estimated value is significant and necessary, hire an oil & gas attorney. 

Anyhow enough about what I do.  Here are some questions that you have probably had clients ask:

These questions largely involved Haynesville assets

  • UMO – assuming a well has reached payout, with the interest subject to 8/8ths less expenses, what is considered reasonable operating costs? We are seeing lessees reporting very high monthly operating costs that are netting out any UMO revenue.  We receive the JIBs every quarter on these but it is a daunting task to sift thru these expenses.  Granted, in these cases, the UMO interests is very small, less than 3 acres or so, in a government 640 acre section.  Unfortunately, the operator has not been motivated to lease the interest due to the interest being insignificant. The state almost always chooses to be leased rather than the headache of being an UMO.  The thought has occurred to me to offer a below market royalty burden to motivate the operator to into an operating agreement over the acreage.  Any thoughts?
  • Non-Operatng Lessees – I’m seeing royalty gas values reported by our lessees that are substantially reduced in comparison to the mandatory state production reports. Their explanation is that the well operator is not giving them “the wellhead” gas volumes due to marketing contracts.  There is one particular operator that is notorious for this practice and they are the “biggest kid on the block”.  Have you seen this?
  • Non-OP & Non-Participating Lessees – Unfortunately, I have come across where our lessee is elected not to participate in a well which resulted in the state not receiving its revenue.  One excuse has been – “Our software doesn’t know how to receive a non-working interest payment on a well from the operator and distribute to our royalty owner.  The Louisiana Mineral Code is clear in addressing all the parties involved and what their responsibilities are but somehow, these lessees believe the complicated logistics excuses them. 

You are probably wondering why is a state guy asking questions like this. Well, to be truthful, as people retire from an institution, a great deal of knowledge “goes out the door” that is never replaced.  Most of my career has been overseeing conventional plays in South Louisiana where the State is a majority unit participate with one lessee and one royalty payor.  Creating a royalty deck was pretty easy with the exception of disputed title over waterbottoms. 

The Haynesville unconventional play offered a different challenge with operators not being the state’s lessee, cross lateral unit wells, state reporting codes (i.e., LUW), companies not knowing what LUW to report under, etc.  After seeing large volumes of gas being produced from production reports that weren’t being translated to royalty volumes, I had to insert myself into royalty accounting which was traditional outside my duties. I started contacting the haynesville players informing them of the problems I was seeing. It created quite a stir with division order analysts and eventually landmen.  I would often find unit wells missing from their royalty reports.  Of course, the state’s strict adherence to the LUW code has been responsible for many of the errors.   I have been a voice in the Dept. to switch to well specific production and royalty reporting which is the industry standard; however, getting the state to change anything comes at a snail pacer.  Some years ago, I did a presentation to NARO on how to report cross lateral unit wells to the state.  Don’t know how useful it was but “my heart was right” lol.

Hope to hear back from you and if there is any question about Louisiana shoot me an email.

Jason

Listener Question #7

Hi Matt,

 It seems that I, my sister and 3 nephews have inherited the mineral rights for a tiny property (.2178 acre) in Carlsbad New Mexico, the Permian area, which our deceased father reserved when he sold the property as long as 40 years ago. We weren’t aware they existed.

We have been contacted as his heirs by a company, to obtain a lease for those rights.

We have no idea how to confirm that this is not a scam, though it’s not clear what they would gain except access to our Social Security numbers which they have requested in order to disburse the royalty checks. 

 And we certainly have no idea how to evaluate their offer: signing bonus of 750/acre (so 750x.2178=163.35 to divided 1/3, 1/3 and 1/6, 1/6 and 1/6) which is not worth bothering with. But he says the monthly royalty could be as much as 1250 or more (again divided) for a couple of years which would be worth my bother, but not my sister’s.  

 I and 2 nephews don’t have the money to hire a lawyer’s help and my sister and nephew who could hire help don’t need the royalties enough to warrant investing in an attorney.

I’m really mostly concerned with how to confirm the legitimacy of the offer. If it’s not a scam, we’re not that concerned about evaluating the fairness of the offer as we can’t hire someone to figure it out.

Any advice would have great help.

Sincerely,

Rebecca

Resources Mentioned in this Episode:

Mineral Rights Education

How Mineral Rights are Valued

Books

How to Make Sure You are Getting Paid Correctly

Check out the free form letter I’ve created for you to contact your operator about late or missing royalty payments.

Mineral Rights Research

Lithium

Taxes

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