Mineral Rights

Riding around the neighborhood in our realtor’s white van, searching for a house to call our own, Jim casually mentioned that some of the houses were sold along with their oil and mineral rights. These homes were built before anyone realized that something of significance was lying underground.

When we finally found our home, after searching for over a year, the last thing on our minds were the oil and mineral rights to our property. We were worried about more pressing matters like the fact that our house had a crumbling foundation and wasn’t connected directly to the city sewer line.

After we moved into the house in the fall of 2002, while going through the paperwork from the title search company, I noticed that two of the home’s previous owners had entered into contracts with Union Oil Company of California in the late 1950’s and early 1960’s. But, that was over 40 years ago and we faced more immediate needs. I placed all the papers from the title search away and forgot about them for two years.

During the Spring of 2004, we received a letter from Mrs. O., the daughter of the second family to own our home. She mentioned that her father was paid $50 a month in oil royalties over 55 years ago. That caught my attention and I wondered how much those royalty payments would be worth today.

I contacted the Union Oil Company of California, or Unocal, and was told that they were not actively drilling in Los Angeles and hadn’t been for years. They informed me that the contracts found during the title search were old and no longer valid. So, I forgot all about receiving royalty payments.

In the fall of 2005, a neighbor mentioned that she was offered a substantial amount of money to sell the oil and mineral rights to her property but had decided not to sell. I wondered aloud if we should be receiving royalty payments. Our neighbor said she was pretty sure that the previous owners had retained the mineral rights to our house. I’m not quite sure how she came by this information and she wasn’t forthcoming. I searched for several hours through our paperwork and finally found the deed to our house. It stated the previous owner had given up any claim to the mineral rights for our property. Wow!

I contacted Unocal again and said that our neighbor was receiving royalty payments, had been for years, based on the old contracts signed with Union Oil. The Unocal representative became very frustrated and assured me in no uncertain terms that they were not making any royalty payments in the Los Angeles area.

Undeterred, I asked a different neighbor if she was receiving royalty payments. She was and offered to give me the name of the company who was paying her once she found it. She said the contracts had changed hands several times over the years and thought she was being paid by a company located in Texas. Our neighbor is elderly and at times becomes confused. She gave me names and addresses of several companies, some who had nothing to do with oil. After several weeks of false leads, she offered contact information for a company that seemed promising. The company worked in oil, was located in Texas and their company website had a link to royalty payments.

I contacted the company and a few days later received a response from an entirely different company also located in Texas. The mineral rights had just changed hands again. A few emails from the company later, I learned that the previous owner was still receiving royalty payments on our property. We faxed the oil company a copy of our deed and let them know that we were unaware that we should have been receiving royalty payments; this information had not been disclosed to us by the previous owners.

It took consistently emailing, faxing information, sending certified letters, filling out tax documents twice (the first set was lost), several exasperating telephone conversations and about four months to receive our first royalty check.

Mrs. O.’s father made out better over 55 years ago, but you know the saying…”Every little bit counts.”