Now that you sold half your minerals , the drill company who owns the 50% you sold will press a partion suit if you do not sign for their terms and sell all the mineral interest on the court house steps to the highest bidder (a drill company )
Likely to hold onto it for royalties or resell at a higher price. With most of the land in the county already unitized, it wouldn't seem practical for them to attempt to drill. That's a guess from someone that doesn't work on the operations side of things.
I worked brokering and buying minerals for a couple of years, and several of the investors/buyers were energy companies like this one.
Maybe, this company owns an undivided 1/2 interest in mineral deed and leased it to themselves. Now they can set their own royalty rate and demand an override royalty interest from any company that they assign the lease to. Its probably not smart to lease it directly to themselves, but there are benefits to lease it to a subsidiary. Large companies do this all the time. Dominion Transmission leased to Dominion Exploration...EQT does this too. If you drill on your fee acreage without a lease and someone forgets to pay the taxes...you just lost your well. Regardless...what this company is trying to do is raise their royalty interest. Theyre probably assigned themaelves 15%...now by assigning the lease to a larger company whose intentions is to drill theyll get another 7.5% override. Theyre trading the lease bonuses in for long term royalty. This could affect you. They just lowered your property's net working interest by their override royalty rate divided by 2, and un this market of tight margins that COULD make a difference as to when you get your property unitized. NWI is very important in a down market.
Interesting. And I guess they could purchase the 1/2 interest for the same, or close to the same, price as they turn around and lease it for, meaning they've paid 0.00 dollars for whatever override they negotiate, 12.5-20% royalty.
Now they have two assets instead of one. They have the lease, which they can leverage much easier, and the mineral deed. Now what I would do is trade the rights of the lease for more mineral fee interest, but that's me...I would guess more and more large mineral holding companies do this, we just dont realize it. They are leasing it back to a subsidiary or a partner. It's probably good business if you think about it. These larger mineral holding companies are a double edged sword...1. They will keep the price of minerals up during down times...which is good. 2. They will buy up large swaths of acreage and demand larger royalties, bonuses, and working interest in properties, thus making it more difficult for your E&P companies to put projects together, but...3. They will drive up the royalty rates, and lease bonuses which is good for the mineral owner.
You wrote that you found a partial release of oil and gas lease. If that's actually the case, then the company just killed the lease. Now, the actual document may be something other than a release of lease (the title doesn't change what the body of the lease does), but it would be worth it to read closely and see. You may have been the beneficiary of a newbie screw up or an incompetent employee screw up or just a standard screw up.
Sometimes companies buy the mineral interest so they can participate (especially smaller companies who want well information) in a well where they are not able to pick up any leases. If all the leases in the area are owned by companies that want to drill, the scenario you described is one way for them to get a foot in the door. So they bought your minerals knowing your lease would expire before a well was drilled and when Gulfport offered to renew or extend the lease on their minerals, they said no. So the lease on their minerals expired and they can now participate in any well that includes the land in the DSU.
My lease was just renewed one year ago. The partial release says other than changing hands, everything else in the lease remains in effect for the rest of the 5 year lease period. The company that bought my minerals doesn't own a majority share. My brother also owns a 25% share of the total. The land is right next to the Family well & the Eagle Creek well, both high producers of gas. I don't understand why Gulfport would sell the lease for that reason.