I get a lot of my info from an outfit called Marcellus Drilling News. If you want to keep up with what’s going on in the region, they’re very useful. Today they posted an article that says more companies are moving into buying minerals instead of leasing. The article also goes a little bit into the considerations that a mineral right owner would have to think through before selling their mineral rights. If you’re thinking about selling, read the article. It will just take a couple minutes, and it will give you some points to consider while making that decision.
I usually strongly recommend to most people that they keep their minerals, but there are times and situations where it makes sense to sell.
I have property in WV. My 120 Acre farm at one time had at least three working wells. Chesapeake wanted tobbuy all my mineral rights. I didn’t sell and all of a sudden my royalty checks from Chesapeake stopped completely with no notice. When I called Chesapeake they told me that they were not pumping that well and gave me no reason. I asked when they would be pumping again. She said she didn’t know. After 2 years and no royalty check I called again. The man on the phone told me that the well only generated $12 in the last two years and I would not get any royalty until it reached $25.00. I asked him if they were going to cap it and he said that they have not decided yet. He was quite a smart aleck during our conversation. I feel like this whole thing happened because I would not sell.
You may have the ability to challenge the validity of the lease. In West Virginia, if no royalties have been paid, and there’s no production, and it’s been over two years, the lease is presumed to be expired. What you need to do is check to see whether there has been production from the well over the last two years. Track down the API number of the well, go to the WV DEP Office of Oil and Gas website and use that number to get a production report. If no production has been reported for the last two years then you’re off to court. If the production has been reported as 6 mcf per month, then you might or might not have a case. Much more than that, and you’ll probably not be able to convince a court that the lease should be declared expired.