Aged, Blind, Disabled (ABD): Mineral Interest Valuations – Ten Quick Tips

Not every case involves mineral interests. Here is a handy cheat sheet for those that do:

  1. Written documentation of the legal description is necessary for each mineral interest (i.e., leases, deeds, wills, division orders).
  2. A 1099 generally does not include a legal description.
  3. Resource valuation is based on royalty production. So, even when there is no 1099 issued, if royalties were produced, we need to know the amount.
  4. Royalty owners’ accounts can go into “suspense” if they fail to cash their checks, meaning the oil/gas company might stop sending the royalty checks.
    • For example, if someone moves, checks may be marked “do not forward” preventing them from being delivered, even if a change of address has been filed with the postal service. A change of address is generally required to be submitted directly to the oil/gas company.
  5. Recently, we discovered two of our clients had thousands of dollars in suspense that we were able to help them get.
  6. Not all oil/gas companies volunteer exactly why a 1099 was not issued, why an account is in suspense, or how much is being held in suspense, if not asked in specific terms.
  7. Requests for information from oil/gas companies can be made via email, often with quick response. Refer to article LTC: Letter to Oil / Gas Company (Mineral Rights)
  8. Communication with oil/gas companies should be done in writing via email. If email is not available, fax may be used with confirmation of receipt upon sending.
  9. Oil/gas companies are required to respond to owner inquiries, but they deal with thousands (or more) royalty owners. Sometimes it takes time, but almost always, a response should be obtainable.
  10. Additional time may be necessary where there is a delayed response from an oil or gas company.
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