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Oklahoma Watch: Unclaimed mineral-rights money ends up in state coffers

Increase in oil and gas production leads to increase in unclaimed royalty payments
BY CHASE COOK, For The Oklahoman Published: February 24, 2013

The amount of money owed to Oklahoma mineral-rights owners who can't be located has exploded in recent years as oil and gas production increased sharply across the state.

An Oklahoma Corporation Commission account that holds unclaimed royalty payments for five years has ballooned from less than $5 million a decade ago to a record $53 million last year.

In fiscal 2012, the account had more than 262,000 missing mineral-rights owners, with a highest individual amount owed of $329,270.

Another account in the Office of the State Treasurer owes about $52 million to mineral owners whom oil and gas companies report they couldn't locate.

If drilling continues to expand, the combined $105 million in both accounts will likely rise.

Most owners will never know that they're missing out on their share of the state's oil and gas boom. An average of about 95 percent of the Corporation Commission account isn't claimed by royalty owners during the five-year period the money sits in the account.

The state benefits by using the cash and investment returns from the accounts to bolster the state budget. Portions of returns go to the Corporation Commission, the treasurer's office and the state's general revenue fund.

Until recently, Gladys Dronberger was among those missing owners.

Several decades ago, her grandfather, John Snyder, was sitting in Calumet drinking coffee with friends when a man drove up and offered to sell the men investment shares in a well. The farmers pooled their money and bought some shares.

In the 1970s, Dronberger's father, Archie Edward Barrett, and his family inherited the investments in the well.

Fast forward about 40 years: A friend of Dronberger's sees Barrett's name in a public notice and calls Dronberger, who lives in Edmond. It turns out there was still about $100 left in that old well, Dronberger said. Barrett had died in 2005 and left the shares of the well to Dronberger, who said she then gave the shares to her grandson, Preston Dronberger.

“I just gave it to him because I thought it would be interesting for him,” Dronberger said. “And lo and behold, it had some money. I knew it had paid dribbles throughout the years.”

Dronberger's case is typical of people who inherit a mineral interest. Some mineral-interest owners have properties that might not have generated any lease or production payments for years, if ever.

Property ownership records kept at county clerk offices across the state are not automatically updated when people move from place to place or inherit mineral rights. If the owners don't make sure the records are current, they may lose track of what they own.

That's particularly true when ownership interests have been subdivided over several generations and when the owners hold the mineral rights only, and not the land, as is often the case. Some interests have passed down through four to five generations thanks to Oklahoma's storied oil and gas drilling history.

When an energy company comes along and decides to lease a property that has no current oil or gas production, it will dispatch “land men” to check county records to determine who owns the mineral rights. For any given property, there might be dozens of mineral owners.

“It's sort of like being a detective,” said Blake Thompson, of Norman, a former land man who now runs, a website that allows mineral owners to advertise properties available for lease or purchase.

If the land men can't locate one or more fractional owners because the information is out of date, the state will allow the oil company to go ahead and lease the land and drill a well under a “force pooling” arrangement. Land men typically check court records and search online to find names and last-known addresses.

Under state law, the only effort oil and gas companies are required to make is to send a letter to a mineral owner's last-known address.

The missing owners' share of any lease bonuses and production payments are given to the state, which keeps the money until the owners step forward to claim it, no matter how many years pass.

The amounts of money owed to individual owners range from less than $1 to $329,270.

Most people with substantial mineral rights know what they own and do what is necessary to make sure they receive their share, said David Sikes, past president of the Oklahoma chapter of the National Association of Royalty Owners. Missing owners tend to have smaller interests and aren't even aware they are owed money, he said.

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