Swallow Group, LLC

The continuing division of mineral interests is a source of increasing difficulty in the oil and gas world. This problem is exacerbated with the passing of each generation. Often, mineral interests were owned at one time by a grandmother and/or grandfather but have now been divided through the siblings and cousins of several generations. As time goes by, mineral interests become divided between more and more family members. The interests become smaller and smaller. More complications arise which may cause disagreement and division among family members and which may prevent oil and gas development altogether. We encourage those families to seriously consider reassembling their personally owned interests into an entity formed to own and manage the interests for the benefit of all of the owners.

Entities can be structured so that voting rights and distributions are allocated according to the size of the interests each family member contributes. Buyout provisions can be included to keep the interests within the family. Many families use family entities as part of their estate plans, to minimize estate or income taxes and/or to provide income to a younger generation.

The unified management of the interests within the family entity alleviates many problems and gives certain advantages to the family. The entity will be more likely to have the strength and financial ability to hire a professional manager who can navigate the complex world of the oil and gas business on behalf of the family. The experience and expertise of a professional manager puts the family on a more level playing field when dealing with sophisticated oil companies and their professional personnel. Verification of proper payment received is often difficult for individuals and can be handled more efficiently by a professional manager.

Your attorney can advise you about the type of entity best suited for your situation, such as a family limited partnership, limited liability company, or a corporation. He or she will draft the paperwork to form your new family entity. The Swallow Group, LLC can serve as the manager of that entity, providing the same services as we provide to our trust clients and oil and gas management clients.