A Story About a Man Named Jed
by Cody Jones
An oil and gas operator calls you to tell you he’s interested in leasing your mineral rights in western Oklahoma. Your first thought is what mineral rights?
With the introduction of new drilling technologies, mineral interests that have been dormant for years have become hot commodities. Through cold calls from operators or mineral acquisition companies, many of our clients are discovering they have rights in minerals of which they were previously unaware.
More often than not, the story goes something like this: Grandpa and Grandma die, leaving five children to take over the farm. Over time, four of the children decide to leave the farm, and one remains to oversee the operation. The siblings convey the land in bits and pieces, granting quarter-sections to each other and reserving mineral rights, or some portion thereof. The siblings then pass away, leaving their interests to their children. Rinse and repeat. The minerals haven’t been leased in decades, so the younger generations are unaware that anyone still has an interest to lease. Then Jed, the one cousin who still lives in the county, receives an oil and gas lease proposal in the mail – the modern day version of shooting and hitting bubblin’ crude.
Jed discovers his father inherited the minerals from his grandfather, so Jed assumes he and his siblings own the minerals. The only problem is that no probate was conducted when Jed’s father passed away, and the severed mineral interests are the only asset remaining in his father’s estate. Thus, Jed doesn’t have a final decree or a deed transferring the mineral interests to him and his siblings. They can’t reap the economic benefits of the minerals without proving ownership. Thankfully, Section 67 in Title 16 of the Oklahoma Statutes provides a possible alternative to probate – an affidavit of death and heirship (c.f. 16 O.S. § 3.2(A)).
Jed can record an affidavit of death and heirship in the county records to establish the rebuttable presumption of ownership. The affidavit must recite the following: (1) that the decedent died without a will, or if the decedent had a will, the will was never probated and a copy of the will is attached, (2) the names of the decedent’s heirs and their relationship to the decedent, and (3) that the affiant is related to the decedent or otherwise has personal knowledge of the facts stated therein. A properly prepared affidavit is not a true substitute for a deed or decree because it will not provide marketable title until it has been recorded without challenge for ten years. However, many operators will assume the risk of relying on an affidavit and lease the mineral rights from the presumed heirs in the meantime. In this way, Jed and his siblings can receive income from the minerals, but they cannot sell or transfer their interest until they obtain marketable title.
The simplicity of the affidavit appeals to many of our clients who stumble upon mineral interests, but the affidavit can only be used when severed mineral interests are the only remaining estate assets. If surface interests or other assets are involved, a probate or intestate administration may be necessary. Furthermore, clients should weigh the risks of waiting ten years to obtain marketable title. During the interim, an instrument may be filed which contradicts the heirship alleged in the affidavit. Similarly, the client may die or become incapacitated before the client’s interest vests, in which case the client may have lost the opportunity to control the disposition of his or her interest. Lastly, if the client foresees possible family discord regarding ownership of the mineral interests, an affidavit may not be the easiest, or cheapest, alternative in the end.