Friday, September 25, 2009

Recourse for mineral rights owners?

From a previous post about the Santa Fe Opera statement leasing of minerals in Mora and San Miguel Counties: "Statement Summary: An unnamed donor gave the mineral rights to the Opera. The money goes to funding the apprentice program for young singers. The Opera needed the money and it believes it is legally obligated to make as much money as it can off with the mineral rights. The Opera stops short of calling itself “green,” but does point to its environmental record."

And further, "...we had no recourse other than to sell or lease these rights, in order to maximize their benefit to the Opera and to meet the organization’s fiduciary obligations." More>>>>

Please note the Santa Fe New Mexican article by Staci Matlock, "State can force mineral rights owners to allow drilling," 2/16/2008, with selected quotes below:

..."the company pays a royalty on any oil and gas extracted, usually one-eighth of the revenues from what is produced, Fesmire said. Mineral rights owners can negotiate for higher royalties. " Yet, according to the Santa Fe Opera lease (88MB), "the royalty shall be one-eighth."

...."If a company hits a dry hole, it loses all the money invested in the drilling. If it finds hydrocarbons, it begins paying the royalty to mineral rights owners who signed leases up front. But people who were forced into the lease do not begin receiving royalties until the company has recouped drilling costs, plus up to 200 percent more, Fesmire said." -- Plus up to 200 percent more.

Furthermore, "The OCD has to approve a company's request for forced pooling and forced unitization. Mineral rights owners can protest to the state. " So, there is recourse.

Related post back in September of 2008:

0il and gas leases sold in Mora County

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