Mineral Rights Owners Resources

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NAPE Rockies 2015

Phillips Energy Partners will be in attendance at the annual Denver NAPE Expo, or NAPE Rockies 2015. Our team views NAPE Rockies as one of the top annual oil and gas expos for networking and exhibits. With an expected 2,500 attendees we’re all in a good position to be surrounded by some of the top minds in the industry.

If you’re attending NAPE Summit in Denver, Colorado, stop by and meet the Phillips Energy Partners team. We hope to see you there!

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Does a Drop in Oil Prices Mean a Decrease in Royalty Checks?

The recent decline in oil prices over the past year has had vastly different effects on various parties. To be sure, while motorists and homeowners may be cheering that it’s significantly less expensive to fill up the tank or heat the home, many oil companies are forced to cut back production, leading to thousands of layoffs nationwide.

But one question may remain in the minds of landowners in South Texas, West Virginia, Pennsylvania, or other areas with resource-rich land beneath many homes: how will the decline in oil prices affect us as mineral rights owners?

Ultimately, if they haven’t already, mineral rights owners who lease their property may soon experience a sharp decrease in their income stream from royalty payments each month. Of course, as a mineral rights owner, it’s important to know the economics behind the drop, as well as what you can do to protect your financial interests, both now and in the future.

Basic Economics

Why have oil prices dropped over the past year? And why would a decrease in oil prices lead to a decline in royalty checks? The answer is the result of a basic economic calculation.

To begin, while oil prices have dropped for a number of factors, one of the largest contributors is the market’s inundation with supply; in other words, there is a greater supply of oil available on the market than before. When there is a surplus of supply, sellers are forced to drop their prices due to the wide availability of oil from multiple sources.

This, in turn, will harm the mineral rights owners, who possess rights over the source of the oil. If oil companies can only sell their product for a fraction of what it once fetched, this burden will be passed onto the mineral rights owners, whose mineral rights will similarly decrease in value. This translates to a decrease in royalty payments; as oil prices have halved over the past year, it is likely that royalty payments will follow suit, even if not to a 1:1 ratio, if they have not already.

What Can Mineral Rights Owners Do to Protect Their Financial Interests?

There are certain tactics that mineral rights owners can employ to help avoid financial catastrophe during this lull in royalty payments. For one, mineral rights owners always have the option of selling their interests outright, instead of leasing them for routine checks. This will likely yield a higher payment upfront, albeit at the cost of losing the mineral rights forever. Given the decrease in royalty payments, selling your mineral rights outright may be the best strategy based on market circumstances for most mineral rights owners. This is also a strategy that relieves mineral rights owners from being at the mercy of uncontrollable and unpredictable market prices.

In addition, often a mineral rights owner may be able to lease his or her rights and still garner a lump-sum payment, instead of routine checks. This option may work best for those individuals who depend on mineral rights as an income stream and who need cash immediately. Note that even with the lump-sum leasing option you may feel the effects of the lower oil prices in your payment and you should not move forward with this decision without weighing against selling your mineral rights outright.

Will Royalty Checks Increase Again in the Future?

While some experts may predict a rise in oil prices again in the future, it is impossible to know for sure. For now, if you have any questions about how a drop in prices may affect you specifically or if you’re interested in exploring your options for selling your mineral rights, contact Phillips Energy Partners today.

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Abandoned Mineral Interests – What Mineral Rights Owners Need to Know

Those who possess non-participating mineral interests (NPMI) on a piece of land retain a certain type of ownership that comes with restrictions. To be sure, individuals who retain non-participating mineral interests may still lay claim to the subsurface resources, and, as such, may benefit from royalty payments; however, they lack executive rights, meaning they cannot make decisions regarding leasing, selling, or producing, and they generally do not benefit from any bonus payments.

In North Dakota, the concept of non-participating mineral interests was once again thrust into the spotlight when a surface owner attempted to subject a given set of NPMI to rules regarding abandonment. Here, the Supreme Court ruled in favor of the NPMI holder, proving a win for those with such rights throughout the state; and, given the precedence set, potentially throughout the country.

Specifics of the Case

The case, Yesel v. Brandon, centered on a North Dakota surface rights owner who brought suit to quiet title to a NPMI under abandoned mineral statutes (bringing a suit to quiet title is a request for the court to “quiet” any challenges or claims to said title of land or interests). In this case, the owner asserted that under the abandoned mineral statutes, the NPMI in this case should be determined abandoned, since it hadn’t been used in two decades.

In response, the owner of the NPMI made two claims: first, that the NPMI should not be subjected to the statutes provided; and second, if the NPMI was subjected to the abandoned mineral statutes, that the actions of the regular mineral rights owners, those with executive rights, should be considered overall use of the rights, including for the purposes of the case.

North Dakota Supreme Court Rules in Favor of NPMI Owner In its ruling, the North Dakota Supreme Court chose not to address the issue of whether or not the NPMI were subject to the abandoned mineral statutes. However, the Court claimed that because the mineral owners with executive rights had exercised said rights over the past two decades, the NPMI should thus not be considered abandoned. In making this ruling, the Court posited that the NPMI cannot be considered abandoned solely because the owner has not exercised rights, largely because said owner has no executive rights in the first place.

A Boon for Mineral Rights Owners

Ultimately, this ruling comes as a significant boon for those with NPMI in the state of North Dakota. If you have questions about this case, or are interested in how it may affect your situation, don’t hesitate to contact Phillips Energy Partners today.

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A Homeowner’s Guide to Mineral Rights and Their Real Estate

If you possess mineral rights beneath your land, you retain an extremely valuable asset with potential to generate revenue for years to come.  You have the option to sell your mineral interests outright, or instead lease your rights to a drilling company for a small upfront bonus, along with the promise of regular royalty payments in the future.

But before you plan on signing a lease on your rights, there are numerous factors you should consider that will help you protect yourself and your financial future. The following are questions to research, and we also encourage you to seek consultation with a mineral rights expert at Phillips Energy Partner, before you make any final decisions.

Do I Own the Mineral Rights?

This is perhaps the most important question to ask yourself before moving forward in your valuation exploration. Do you own the mineral rights beneath your property? Or do the rights belong to a third party?

In some situations, the surface rights (rights to build and farm on the property) and mineral rights are owned by the same party, a concept known as “fee simple” in a collective sale. In other circumstances, however, the rights are owned by multiple parties; here, the rights are considered “severed.”

How can you tell if you own the rights? In some cases, ownership may be shown directly on the deed to your property. Or, if you believe you own the rights, but don’t have proof, you can search county records or create a chain of title backwards from the present to help you determine.

Can a Mineral Owner Drill on My Land if I Don’t Own the Rights?

What happens, then, if you don’t own the mineral rights on your property? Does the mineral interest owner have the right to drill on your property?

Unfortunately, if someone else retains rights to the mineral interests beneath your land, they may be allowed to build a well and begin drilling on your property. Of course, the extent of this should be dictated in a mineral deed, which may restrict the amount of time during which drilling can occur, or it may prevent excavation beneath a specific depth.

I’m Buying Property. Am I Buying Mineral Rights as Well?

In the event that you are about to purchase property, you may also be interested in whether or not you will gain access to the mineral rights as well. In fact, the availability of this answer depends on where you live.

For example, if you live in one of the “disclosure” states, which include Louisiana, Michigan, North Carolina, Ohio, Texas, and Wisconsin (both Florida and Colorado are currently considering disclosure laws as well), property sellers are required to disclose whether or not the mineral rights have been severed from the land. However, if you plan on purchasing property in any of the other 42 states, you may need to conduct the aforementioned research beforehand to discover who owns the mineral rights.

Consider Consulting a Professional

Answering these questions can be difficult without the assistance of a trained professional. If you need help determining whether or not you own mineral rights and/or what the value of those mineral rights are contact Phillips Energy Partners today for a free initial consultation.

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How Oklahoma Royalty Owners Recovered $119 Million from Chesapeake Energy

If you own mineral rights associated with a piece of property despite not owning the surface rights, you have the option to lease your interest for compensation. And, of course, the royalties you receive should be directly tied to the size of your ownership, minus anything as agreed upon in a contract.

This simple concept, however, was at the center of a lawsuit recently decided in Beaver County, Oklahoma. Here, a drilling company associated with Chesapeake Energy Corp. allegedly deducted significant amounts from royalties for non-related expenses, and, as such, was ordered to pay nearly $120 million to the plaintiffs.

Background of the Case

The case focuses on Chesapeake Operating LLC, a unit of Chesapeake Energy Corp. that has leased mineral rights throughout Oklahoma. Originally, a lawsuit was filed in 2010 by John Fitzgerald, a Kansas resident who believed that he was underpaid royalties owed to him from his Oklahoma interests. Shortly thereafter, Fitzgerald sought class-action certification, which was granted in 2013.

The allegations of underpayment stem from expenses deducted by Chesapeake from royalties for marketing, compression, processing, and other services. The underpayments allegedly took place over the course of 10 years, from 2004 to 2014. But the deductions of said expenses may have ultimately been due to a confusion over who bears these burdens; specifically, in Mittelstaedt v. Santa Fe Minerals Inc., the Oklahoma Supreme Court decided that oil and gas lessees are responsible for making the gas marketable, and not the mineral rights owners. Here, however, the Court chose not to define this term, leading to a variety of different interpretations.

Effects of the Case

In this most recent case, Chesapeake’s actions proved to be against the law, and they have been ordered to pay $119 million in compensation, which will go to both plaintiffs and their attorneys. And this may have a significant impact on the future, as well; numerous class-action lawsuits have been filed in Oklahoma recently alleging royalty underpayments by drilling companies, so this recent decision may certainly act as a beacon of hope for anyone who feels they may not have been awarded what they truly deserve.

Ultimately, if you own mineral interests, it is in your best interests to speak with a professional who can help you decide the best course of action. Contact Phillips Energy Partners for a free property evaluation and have a trusted mineral rights consultant in your corner.

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Ohio’s Utica Shale Generating Hefty Expectations with University Findings

The Utica Shale in the northeastern United States has long been overshadowed by the adjacent Marcellus play, considered the second largest shale oil and gas play in the entire world. Original estimates of the Utica’s containments were nothing to scoff at, as initial research showed that it housed 38-trillion cubic feet of gas, as well as 940 million barrels of oil. This pales in comparison though to the recoverable gas alleged to exist in the Marcellus, with estimates ranging from 141 to 1,500 trillion cubic feet.

Recent research, however, has uncovered massive potential in the Utica Shale that lies beneath the surface. To be sure, a study conducted by researchers at West Virginia University leads experts to believe that the Utica, in reality, may be one of the biggest plays in the world.

Just How Big is the Utica Shale?

According to the study performed by the Appalachian Oil and Natural Gas Research Consortium (a program within the National Research Center for Coal and Energy at West Virginia University), previous estimates conducted on the Utica Shale by the United States Geological Survey were wildly off, possibly by a factor of 20. In fact, results from the new study show that the Utica Shale may truly hold up to 782 trillion cubic feet of gas, as well as nearly two billion barrels of oil. Naturally, this has stunned many, with oil and gas industry players now looking hungrily toward the Utica Shale with possible future plans.

Effects on the Future of the Oil and Gas Industry

There is no doubt that the results of this recent study are relatively groundbreaking, and highlight an area in the United States wherein a massive reserve of natural gas resides. But what effect, if any, will this have on future production?

For now, with an oversaturated market and low prices of oil and gas, industry players may be wary of investing heavily in another shale play, even if its reserves may be astronomical. That being said, a future rebound in the market could signal a renewed surge in activity in the Utica Shale.

At Phillips Energy Partners, we are excited about the discoveries presented in this new study as it further highlights the promise of domestic oil production potential. If you live in the Utica Shale or any other shale play, contact us today for a free property evaluation.

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Two Perspectives on the Keystone XL Pipeline

The Keystone XL pipeline has certainly been the topic of heated debate ever since it was first introduced. Originally proposed in 2008, the Keystone XL would act as an extension to the existing Keystone Pipeline, which runs from Alberta to both the Gulf Coast and Illinois. The XL extension, which would meet up with the Keystone in Steele City, would hypothetically provide greater support for the growing oil and gas industry within the Bakken Shale.

Of course, like any issue of national importance, there are two sides to this debate, with supporters and critics battling viciously over this project in hopes of getting their way. Both sides retain strong arguments; regardless of the merits, however, the ultimate fate of the pipeline extension may lie in the hands of the next United States president.

Pipeline Supporters

Why do the supporters see the Keystone XL as a necessary step? For one, the creation of the pipeline extension would inevitably lead to a larger amount of jobs in the energy sector, as more workers would be needed to help transport the oil across this new swathe of territory.

In addition to this, one supporter, namely David Hill, the president of the Ohio Oil and Gas Association, cites safety concerns if the pipeline is not created. Specifically, he asserts that by not allowing oil to be delivered through this extension, the nation will instead be forced to rely on more dangerous forms of transportation, including truck and rail. This, in turn, may lead to a greater number of catastrophic accidents that occur in transit. This also further burdens the national highway and rail infrastructure.

Pipeline Critics

There are, however, arguments against the creation of the pipeline, as well. Many conservation groups oppose the creation of the extension, as they believe it will have a significantly negative impact on the environment. The National Resources Defense Council, Friends of the Earth, and numerous other organizations highlight the dangers of transporting tar sands oil across the country and the likelihood of water contamination, the inevitability of deforestation, and the possible displacement of indigenous populations. And, of course, there would be a constant fear of a significant pipeline spill, whose effects could last for generations.

Interestingly, there is limited information that balances the environmental impact of increased train and truck transport vs. that of the new pipeline.

The Future of the Pipeline

As of yet, the pipeline is still a dream; while Congress passed a bill in February approving construction, it was vetoed by President Obama, who believes it should be fully assessed by the State Department before moving forward.

However, this could rapidly change after 2016, when executive power will transfer to another Commander in Chief. The pipeline could have an impact on mineral owners in the Bakken Shale and beyond.

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How to Prepare for Mineral Lease Negotiations

In order to take advantage of the ownership of mineral rights and reap a financial benefit, the owner generally must sign a mineral rights lease, providing a drilling company the opportunity to explore and, ultimately, extract resources from the ground. Within the mineral rights lease often exist clauses regarding the length of the lease, the royalties retained by the rights owner, and other related specifics.

Of course, in order to protect the owner’s interest in the leasing of the mineral rights, it is in his or her best interest to prepare adequately for negotiations over the terms. And to help, we have provided a small guide to ensure you have the information and resources necessary to approach a mineral lease negotiation.

Check Your Ownership

To begin, it is imperative that you retain proof that you own the mineral rights on a specific portion of ground. It’s important to understand that just because you possess the surface rights to a property does not mean that you possess the mineral rights as well; the rights could have been severed, with the mineral interests going to another individual. Make sure to present proof of your ownership, either through a legal description on the property’s deed, a copy of the mineral rights record from the county clerk’s office, or through other means.

How Much Do You Own?

In addition to overall ownership, it is necessary that you show proof of your ownership in terms of net mineral acreage. Net mineral acreage can be calculated by taking the acreage of the property itself, and multiplying it by the fractional interest you own in the minerals. For example, if you have a 50 percent (1/2) interest in a 100-acre piece of land, then your net mineral acreage totals 50. This will be utilized to calculate the eventual compensation you can receive should the land undergo production.

Should You Lease or Sell?

In deciding how to utilize mineral rights, owners generally have two options: they may either sell the rights, or lease them instead. And benefits exist to both; by leasing the mineral rights, the owner will likely receive royalties over the course of time throughout the future, while selling them outright may lead to a larger up-front payment. However, because leasing rights may still yield an immediate financial bonus as well, mineral rights owners should be wary of selling their interest without guidance from a professional.

Explore the Results of Neighboring Negotiations

Perhaps one of the most important factors to consider in the negotiation of a mineral rights lease is whether or not it provides compensation for royalties comparable to other land in the area. Before entering negotiations, the owner should conduct initial research to discover the average price of mineral rights royalties nearby, and use that knowledge to his or her advantage.

Speak to a Professional

Beyond these guidelines, there are a host of other specifics to consider when negotiating a mineral rights lease. As such, we encourage anyone who is interested in leasing or selling mineral rights to first consult with Phillips Energy Partners. Our professionals can advise you on the best course of action to help you protect your interests and we can provide a free property evaluation.

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Does Oklahoma’s Ruling Allowing Homeowners to Sue Over Quakes Set a Precedent?

When asked to consider natural disasters in Oklahoma, many outsiders would immediately conjure up images of destructive tornadoes ravaging the state. To be sure, Oklahoma lies within an area of the United States known as “tornado alley,” wherein devastating twisters are relatively routine.

Surprisingly, however, a recent ruling made by the Oklahoma Supreme Court centering on damage recovery due to natural disasters had nothing to do with tornadoes, but instead centered on earthquakes, and their alleged causation by fracking in the area. Specifically, the High Court ruled that those who suffer damages due to earthquakes caused by oil and gas activity can sue for damages in civil court.

Does Fracking Cause Earthquakes?

The case centered on an alleged phenomenon, specifically that hydraulic fracturing may lead to earthquakes. How, exactly, is this described to occur? As the result of fracking, a significant amount of wastewater is produced. To dispose of this wastewater, drilling companies generally inject it into underground disposal reservoirs, which lie next to fault lines. Due to the proximity with the faults, the heightened activity is claimed to lead to these seismic events. Of course, these are the allegations and the stance of one side of the argument; the other perspective argues that these allegations aren’t “based on science.”

Until now, industry players had made significant attempts to block any lawsuits filed by earthquake victims against drilling companies within the state, with many legal professionals arguing that these claims should be heard by the Corporation Commission, and not a state court. This recent ruling, however, opens the gates for injured victims to pursue damages from liable parties. This ruling does not assign blame for the seismic events, but it does open the door for appointed attorneys to try and do just that.

Does This Set a Precedent Nationwide?

Victims of earthquakes in Oklahoma now have a legal remedy for the damages they suffered due to the perceived actions of oil and gas drilling. But is this an isolated event? Or is it possible that other state Supreme Courts will take similar actions to allow for the recovery of civil damages?

In reality, this decision may have been influenced by the fact that Oklahoma has seen the greatest rise in earthquakes over the past years, with 585 occurring in 2014. That being said, other states, including Texas, Ohio, Colorado, Kansas, Alabama, Arkansas, and New Mexico, have witnessed a recent surge in seismic activity, according to a report by EcoWatch; and, not surprisingly, these states have seen a related increase in oil and gas activity. As such, although this significant decision has roots in the Oklahoma Supreme Court, it may not be long before a similar ruling crosses state lines as more information is uncovered on what is a loosely understood phenomenon currently.

Perception vs. reality will continue to be argued by each side on this controversial matter. In any situation, the effect on domestic drilling will likely be negligible as domestic oil and gas production has been quick to adopt change and will continue to do so if speculative allegations can be backed and proven as facts in a court of law.

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Can the Domestic Oil and Gas Industry Outlast the Standoff with Saudi Arabia?

In July of 2014, much of the world stared in awe as the price of crude oil fell to a mere fraction of its peak levels. To be sure, after trading at $115 per barrel in June, it fell to $70 per barrel in December, and now sits at approximately $48 as of this writing.

Since the rapid decrease in the cost of oil, many experts have pointed to a variety of factors that precipitated the decline, one such factor being the overproduction of oil by Saudi Arabia allegedly in an effort to significantly harm the industry in the U.S; by overproducing oil and artificially decreasing the price of oil, Saudi Arabia has robbed profitability from the domestic market.

Of course, there is no question that falling prices have had a negative impact in some oil-producing states like Texas, where the state lost over 25,000 jobs in just March of this year. That being said, there have been some positive effects as well, and it is likely that the United States will outlast this standoff without incurring catastrophic damage to the oil and gas industry.

What Are the Positive Effects of Saudi Arabia’s Actions?

The actions of Saudi Arabia have undoubtedly hurt the oil and gas industry, with companies nationwide cutting spending and shedding jobs each and every month. On a more positive note, however, this has resulted in decreased gas prices for United States citizens; specifically, the average national gas price is expected to drop to $2.60 per gallon in 2015. This, in turn, puts more money in the pockets of those in the United States, which can further help fuel the economy in other areas.

The Truth for the Oil and Gas Industry

But while low prices at the pump are a pleasant byproduct of oil overproduction, both domestically and internationally, it does not mitigate the damages sustained by the oil and gas industry nationwide. As mentioned before, Texas lost tens of thousands of jobs in a single month, with nearly 60,000 cut across the country from January to May 2015. And some oil and gas companies have even looked to bankruptcy to escape the debts they incurred during times of profit, yet that they couldn’t service when prices dropped.

Does this mean, though, that the domestic oil and gas industry has taken such serious damage from which it cannot rebound? Not likely – while oil prices are sitting beneath $50 per barrel, many believe that this has stabilized, and may even increase slightly in the near future. Hopefully, this in turn will lead to the emergence of a more resilient national oil and gas industry that can look forward to robust growth in the future.

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Top Online Forums for Mineral Rights Owners

The Internet has the inherent ability to empower individuals willing to search or inquire with information that was not possible prior to the digital age. This is especially true concerning niche topics and topics with time-critical information. At Phillips Energy Partners, we are more than happy to educate and consult mineral owners, but understand that some mineral owners may wish to perform the preliminary research on their own to orient themselves with an industry that may seem overwhelming to the uninitiated.

To facilitate the research process, we have consolidated a list of online resources for mineral rights owners. While it’s important for mineral owners to become at least loosely acquainted with most of these resources, the majority of users will find that the mineral rights forums contain the most pertinent information. These mineral rights forums provide a platform for mineral owners to connect with other mineral owners as well as industry professionals in a casual environment for free. No information is behind firewalls and all you need is a free account and an agreement to abide by simple forum etiquette to ask and answer questions on each of these platforms.

While covering the vast options of forums that claim to cover mineral rights is beyond the scope of this article, we want to highlight four mineral rights forums that stand out for their quality and exclusivity to mineral rights owners.

– Haynesville Shale Forum: Obviously, this forum is most pertinent to mineral owners in Texas’, Louisiana’s and Arkansas’ Haynesville Shale, but that is a clear benefit as conversation is isolated to what matters to the forum users. Furthermore, the users are the heart of any forum and there’s no better benefit than knowing that as a Haynesville Shale owner you’re not going to have to filter through threads that do not pertain. Threads are topically oriented to the Haynesville Shale. GoHaynesvilleShale.com filled an immediate need when launched and welcomed 10,000 members within the first summer of being live. That number has since increased ten-fold and the exponential growth can be credited to the admins and moderators maintaining a high-quality resource for Haynesville Shale mineral owners.

– Marcellus Shale Forum: GoMarcellusShale.com also has the inherent benefit of being a topically oriented forum most relevant to mineral owners in the Marcellus Shale formation, which spans multiple states including Ohio and Pennsylvania. GoMarcellusShale.com was developed to fill a need. As explained by the forum’s creators, “Googling ‘shale’ brought up little information.” That is certainly not the case now as GoMarcellusShale.com alone has over 227,000 pages in Google’s index. GoMarcellusShale.com also excels in granularity of categories to make navigating the site a breeze and reduce one’s reliance on search. For example, you can isolate threads exclusive to your county by navigating first to the state then specific county.

– Eagle Ford Shale Forum: EagleFordForum.com shares the same administrators as the first two forums on our list, so, as expected, the quality is consistent and the moderators are vigilant in keeping threads clean and eliminating Spam. Choosing between these topically oriented forums is as intuitive as selecting the domain that pertains to your mineral rights ownership. Interestingly, there is a benefit in being active on all three forums as many of the threads affect mineral rights owners nationally and the answer to your question may be on a sister forum.

– Mineral Rights Forum: MineralRightsForum.com is another high-quality forum with a very active community. Opposed to the sniper approach of isolating a single shale play, Mineral Rights Forum has taken a shotgun approach with topics pertaining to all United States oil and gas activity. Along with casting a wider net in terms of community geography, MineralRightsForum.com also tries to be more than just a mineral rights forum; you’ll find a blog on the site as well as an online marketplace for mineral rights owners. The broad focus is a little surprising on a website that has “forum” in the domain, and the blog is not the best we’ve seen in the industry, but identifying a preference between the more topically oriented forums or the general mineral rights forum is subjective.

As with any forum, the active members are the heart and the website design, navigation and moderators are merely secondary. We recommend that you explore all of these mineral rights forums and identify which community shares your interests and is most relevant to you.

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The Dormant Mineral Act – a Win for Utica Mineral Holders

In a significant win for mineral rights owners in Ohio, the state Supreme Court upheld previous amendments to Ohio’s Dormant Mineral Act that allow mineral rights owners to preserve their interest in land by simply filing an affidavit. This is extremely beneficial for mineral rights owners who retain no claim to the land above, as they now have a convenient option to preserve interest in their minerals that the landowners have declared abandoned.

The Dormant Mineral Act

To understand the significance of the ruling, it is first necessary to examine the Dormant Mineral Act. Under the Act, mineral interests that are severed from the land above are considered abandoned after 20 years unless, within that time frame:

the mineral interest was part of a transaction;

production on the rights had begun;

the rights owner properly filed a claim to preserve rights

a tax parcel number was created for the rights.

The original act was created in 1989, and additional amendments were ratified in 2006 that provided further clarifications. Specifically, the amendments provided the following:

First, the surface owner is required to alert the mineral rights owner of the intent to declare the mineral rights abandoned.

If the mineral rights owner wishes to contest this claim, he or she must then alert the surface owner, and file an affidavit that identifies an event that occurred within the previous 20 years that preserves the mineral rights.

Finally, the amendments also clarified that the 20-year clock starts running when notice of the claim of abandonment is first established.

Ruling of the Ohio Supreme Court

The source of the recent ruling was a case, Dodd v. Croskey; in the case, the Ohio Supreme Court aimed to “resolve the question of whether a mineral-interest holder’s claim to preserve a mineral interest from being deemed abandoned in accordance with [the Dormant Mineral Act] is sufficient to preserve that interest if the claim was filed after notice of the surface owner’s intent to declare the mineral interest abandoned and outside the 20-year window immediately preceding that notice.”

Here, the Supreme Court ruled in the affirmative, meaning that mineral rights owners may file a contesting affidavit after an abandonment claim is published, and have no obligation to do so within the preceding 20-year period.

What effect will this have on mineral rights owners in the Utica Shale? Most importantly, this recent ruling places more power in the hands of mineral rights owners whose interests have been severed from the land. To be sure, the process has been simplified for these mineral owners to preserve their rights and reap the benefits of their ownership.

At Phillips Energy Partners we celebrate all wins for mineral owners. If it is unclear how this act positively affects you, contact us today for a free initial consultation or request a free property evaluation.

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Is the Texas Oil and Gas Association Beneficial for Mineral Owners?

The Texas Oil and Gas Association (TXOGA) is a true cornerstone of the oil and gas industry within the state. Founded in 1919, it is the longest running and largest organization within Texas that represents interests within the petroleum industry, and claims to embrace every aspect of the Texas oil and gas trade.

Of course, as a statewide trade association, the TXOGA makes efforts to advocate on behalf of players of all sizes, from small independent companies, to major producers. But does the reach of the TXOGA extend all the way to individual mineral owners within Texas? Are Texas mineral owners even a consideration by this organization in a state so saturated with massive entities in the field of oil and gas?

Purpose of the TXOGA

The TXOGA claims to represent the interests of the oil and gas industry in Texas. But considering that so many entities are present within this field, what exactly does this mean? Ultimately, the TXOGA focuses on three main activities: regulation, legislation, and public/industry affairs. And within this, the TXOGA has one main objective, specifically to address the issues of government regulation and taxation.

To do so, the TXOGA utilizes representatives who monitor legislation and propose changes or amendments; contact various regulatory agencies and engage with state legislators and their staff; and advocate in courts of law, generally at the appellate level. The TXOGA retains professionals with experience and expertise who can assist in furthering the stated goals of various organizations and entities within the oil and gas industry.

What Are the Benefits for the Individual Mineral Rights Owner?

Naturally, with such lofty goals, it may not seem as if the interests of an individual mineral rights owner may ever be the focus of an organization such as the TXOGA. That said, however, in reality, specific actions taken by the TXOGA may prove highly beneficial for mineral owners. To be sure, TXOGA representatives may propose and advocate for legislation that decreases taxation on the product reaped from minerals beneath the ground, or may champion regulation reform that puts more power in the hands of those who own minerals.

In contrast, however, there may be occasions wherein mineral owners are at odds with major industry players. Here, the TXOGA’s actions may be in line with the interests of the latter, leaving mineral rights owners to fend for themselves, or to turn to other statewide trade associations for additional advocacy.

Overall, the TXOGA plays a significant part in advancing the goals of the industry, however, individual mineral owners may only receive the benefit of staying informed on industry trends that may otherwise be more difficult to uncover.

If you have specific questions about your Texas mineral rights, then it will be hard to obtain information strictly pertaining to you via a TXOGA membership. Contact Phillips Energy Partners today and will be happy to provide a free initial consultation.

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How NOAA Measures the Impact of Local Shale Plays

The National Oceanic and Atmospheric Administration (NOAA) is an agency of the United States federal government tasked with monitoring the conditions of atmosphere and the oceans in an attempt to preserve Earth’s natural environment. Not surprisingly, NOAA is responsible for presenting hurricane warnings, analyzing droughts, and generally reporting on the condition of the climate.

Of course, it is widely understood that oil production throughout the United States leads to the emission of methane and other gases into the atmosphere. As such, NOAA conducts routine tests in the skies above oil plays nationwide to discover their true impact. Doing so, however, requires a significant group effort, as well as a plane filled with a handful of brilliant minds.

Scientists Circling the Texas Skies

According to an April 2015 report from NPR, in order to measure the impact of the oil and gas fields on the air over Texas, NOAA sends manned aircraft into the sky to conduct measurements. To be sure, scientists on the flights track factors such as the excessive production of ozone and methane, both of which are released from oil fields on the ground below.

And these NOAA scientists aren’t flying first-class in a jetliner while at work; instead, this project utilizes a four-engine turboprop that is otherwise used to fly directly into hurricanes.

The Point of the Project

Of course, the NOAA scientists are interested in measuring the exact amounts of methane and ozone in the atmosphere. More specifically, however, the scientists hope to find out what fraction of ozone and methane extracted in oil fields actually ends up in the atmosphere. This is known as the “leak rate,” and it varies depending on the area.

Some scientists are also focused on what portion of methane in the atmosphere is the result of oil fields, and what comes from other sources, such as cows on feedlots. According to the report, oil fields will produce methane with a large amount of ethane, while feedlots produce methane with ammonia.

Sharing Statistics

By conducting the project, NOAA intends on highlighting the impact the oil and gas industry may have on the atmosphere above the skies of Texas and other oil-producing states. In turn, this may help operators and regulators adopt better practices to ensure the air is safe for current and future generations. This relationship between NOAA and oil producers is one that has a positive impact on the industry and will help local shale plays in Texas to continue to realize expansion.

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NuStar’s Midstream Financial Success in the Eagle Ford Shale

NuStar Energy, an oil and gas transportation company located in San Antonio, witnessed a record setting first quarter in the Eagle Ford Shale region. To be sure, according to a recent report in the San Antonio Business Journal, the company shipped an average of 290,000 barrels of oil per day through the South Texas crude oil pipeline system.

Overall, this massive volume shipped led to well over $500 million in revenue for NuStar Energy for the quarter ending on March 31. And, of course, these substantial numbers are due, in part, to the recent expansion in the crude oil pipeline within South Texas.

South Texas Crude Oil Pipeline Expansion

What is the South Texas crude oil pipeline expansion? And what effect has it had on the shipment of crude oil across the state, specifically by NuStar Energy?

Beginning in 2013, NuStar announced a proposal for a pipeline expansion project that would allow for a far greater quantity of oil to be shipped through Texas. According to a 2013 report from Reuters, the expansion was to consist of two phases; the first phase was expected to be available for service in the third quarter of 2014, with the second phase following in quarter one 2015. The purpose of the expansion project was to increase the amount of oil that could be transported daily across the region.

And, as the numbers show, the expansion has been successful, even exceeding its original goals. A separate Reuters article from January 2015 asserts the expansion was expected to double capacity to 200,000 barrels per day for the entire system; this is well below the 290,000 daily barrels actually transported in the first quarter.

Second Expansion Expected

As of this writing, the proposed expansion of the South Texas crude oil pipeline is nearing completion, with NuStar Energy reaping its benefits. Furthermore, from April 2 to April 23 of this year, NuStar was soliciting shippers through a “binding open season,” in which shippers could make firm commitments to transport their products on NuStar’s expanded pipeline. What does this mean for NuStar? Ultimately, with solid commitments from shippers across the state, the expansion of its South Texas pipeline is certain to provide significant financial gain for NuStar, both during this coming quarter and well into the foreseeable future.

Don’t underestimate the implications enhanced midstream has on Texas mineral rights owners. Contact Phillips Energy Partners today or submit a free online offer request.

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A Look at the Adoption of CNG Vehicles

In an effort to help preserve the condition of the environment, and decrease any further damage, some individuals have begun using compressed natural gas (CNG) vehicles. CNG vehicles, as their name implies, run using a compressed form of natural gas, and are generally a low-cost, cleaner burning alternative than their counterparts.

Surprisingly, though, natural gas powers only approximately 150,000 cars in the United States, compared to the millions of others that run on traditional fossil fuels. Why, then, are these vehicles so few in number throughout the country? And can we expect more CNG vehicles on the roads in the near future?

Why CNG Vehicles Are a Rarity

Although there are only a few hundred thousand CNG vehicles in the U.S., that number jumps to 15.2 million worldwide. Why? Although strictly speculation, this sizable difference may be due to the fact that other countries support natural gas vehicles and embrace this cleaner, more efficient form of transportation.

Conversely, in the U.S., where natural gas is plentiful in some areas, there are still limited fueling options, a fact that inevitably leads to a decreased demand for CNG vehicles. Consumers may be enticed by the inexpensive, cleaner CNG vehicles, but may prioritize ease of locating fuel over decreased cost.

What Could Lead to the Adoption of CNG Vehicles?

Ultimately, one of the best ways to lead to the widespread adoption of CNG vehicles is through government support. Specifically, governments could use funds to convert state vehicles to run on CNG, and help local communities do the same.

In fact, this is exactly the purpose of Senate Bill 12 in Texas, a piece of legislation currently in front of the 84th legislative session in Austin. Senate Bill 12 would take a portion, 3 percent, of the $1 billion allocated to the Texas Emissions Reduction Plan (TERP). Using this money, the government would convert many of the state’s 28,000 vehicles to run on natural gas or other alternative fueling options. The bill also proposes fueling stations that are strategically placed in areas throughout the state. Local governments would also be able to use the resources to convert their own fleets to run on CNG.

As of now, the bill’s future is unknown, with both strong supporters and critics Hopefully, though, if the legislation becomes law, Texas will have the chance to act as a model state on the quest to leverage the abundant domestic resource.

“CNG Pumps” image based on “CNG pumps in gas station” by Darin McClure, CC-BY-2.0.

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The Eagle Ford Shale Mobile App – Useful for Mineral Owners?

By now, many of us have realized that there is a mobile application to streamline nearly every aspect of life. Apps can help us calculate tips, search for apartments, learn about world history, and even begin and maintain meaningful relationships with others.

And now, thanks to an ambitious San Antonio entrepreneur, there exists an app solely aimed toward landowners and energy companies in the Eagle Ford Shale, helping these parties in a variety of ways in South Texas. The app, the Eagle Ford Mobile Network, is meant to be an online resource to serve the needs of those working and living within this well-known oil play.

How the App Serves the Community

How, exactly, does the Eagle Ford Mobile Network work in the favor of landowners and energy companies in the South Texas area? Most importantly, it provides an online listing of a host of information relevant to many people. Specifically, the app features listings for jobs in the Eagle Ford Shale area, different service companies, and even equipment that is currently for sale. Furthermore, the mobile app also contains information regarding news about the Eagle Ford Shale, activities in the oil and gas industry, and even energy-related conferences that will be held in South Texas.

The app was originally created by Marco D. Flores, a San Antonio entrepreneur who wants to replace traditional print directories that may become obsolete within a short period of time. His mobile application can be constantly updated, and will remain relevant for all those interested.

Using GPS location services, the app gives users a list of resources directly within their area. Companies have the option of paying to be placed at the top of their specialty directory, no matter where they are located. Furthermore, businesses may also choose to contribute to the app’s blog, which can offer information for both service companies and landowners.

How the App Can Help You

Should you download the app? Depending on your position in the Eagle Ford Shale, you may wish to utilize the mobile app for a variety of reasons. You can locate service companies in the area, find jobs in the oil and gas industry, and even advertise your services to those throughout the Eagle Ford Shale. And, as further incentive, the app is free of cost, as of May 2015, supplying increased rationale for testing out this application to see what it may offer.

For mineral owners? Well, the app is free, so there’s no cost of entry, but there’s also no inherent benefit for mineral rights owners in the Eagle Ford. However, at zero cost of entry it may be wise to download the app to stay privy to local drilling activity, which will have a direct effect on the value of your mineral rights.