Do you have escheated funds held by the State? This is a question that many mineral owners never consider. Argent Mineral Management’s role is to advocate for our clients and take a proactive approach in our daily management practices. One example of how we do this is searching for escheated and suspended funds. Before a new well is drilled, oil companies typically have a law firm prepare a title opinion to confirm mineral ownership on the tract(s) where the well will be drilled. Typically, if a mineral owner cannot be located and a well is subsequently drilled, the oil company will hold the unclaimed revenue in a “suspense account” until the legal title owner comes forward to claim it. Oil companies are required to send (escheat) these suspended funds to the State after 2-5 years, depending on what State the well is located. At Argent, it is our standard practice to locate and retrieve these funds for our clients.
Checking for Escheated Funds — A success story
A client of mine inherited hundreds of mineral and royalty assets scattered across the U.S. from her husband, who passed away in the early 2000’s. She managed these assets by herself for over 15 years. When this became too much for her, I stepped in to handle management. At the time, she was receiving well over six figures annually from oil and gas revenue. During my initial research, I was able to locate a small amount of funds in the name of her husband that had been escheated to the State of North Dakota from a large oil company. Prior to this, our client did not have any knowledge of ownership in North Dakota, as they were acquired decades prior and got “lost in the shuffle.” We then discovered that ancillary probate had not been completed in North Dakota when her husband died and title never legally transferred to our client. The fun part came next. North Dakota typically requires funds to be escheated to the state after two years. So, we began researching her husband’s ownership in North Dakota and located multiple mineral interests that he had acquired. We then searched for producing wells on these tracts. As luck would have it, more than ten wells had been drilled in the two years prior that we believed our client had an ownership interest in. With the help of a licensed oil and gas attorney, we were able to complete the ancillary probate in North Dakota. This allowed us to retrieve the escheated funds being held by the State and begin contacting the three oil companies who operated the new wells. Ultimately, we were able to recover over $300,000 in suspended funds being held by the operators from past production. On top of that, now that ownership was legally transferred to our client, her monthly revenue rose by nearly 50% overnight.
Escheated funds can lead to sizable and ongoing revenue
This one important step of checking escheated funds led to a sizable one-time recovery and an increase in ongoing monthly revenue. This is another example of how our proactive management and industry knowledge leads to satisfied clients, and our goal is to provide this level of service to every relationship.
If you have questions or concerns about selling your minerals, our mineral management team is here to assist you. Give us a call at (800) 375-4646 to learn more.
Travis joined Argent Financial Group’s Mineral Management division in 2021 as a Mineral Manager. Gist, a Fort Worth native, is an accomplished mineral rights and land manager with more than 11 years of experience.