1-6n-8w

Oklahoma Mineral Rights Grady County, OK
1

Anything going on close to this section? My nephew has received an offer to lease, for $1,250 acre/ 1/4royalty/ 2 years.

I know about the nice wells just West of Highway 81 by the Ninnekah flashing lights, and the wells over by Lake Burtschi, but anything been drilled closer to command this kind of offer?

Thanks

2

Your nephew's section touches section 7-6N-7W where both Continental and Unit have filed various applications...

Continental / Spacing Final Order #620809, Location Exception Interim Order #622815

Unit / Spacing Final Order #627162, Pooling Final Order #627805, Location Exception Interim Order #627735

You can check the orders here... http://imaging.occeweb.com/imaging/OAP.aspx

I believe Continental will be drilling the Woodford formation and Unit will be drilling the Hoxbar formation. So your nephew's section may be a prime spot.

3

That's a nice offer. The trick is a good lease which can pay off far more than the bonus if you get a good no deducts clause.

4

Thanks for the info.

He has been sending me copies of the lease, and I have been telling him what to delete/change. Kind of "rough" at first, but he might end up with a decent lease once the smoke clears

5

Last week I received a copy of a drilling application on this section from EOG. The target is the Hoxbar formation.

6

Earl, who is offering that lease? I have a couple leases that expire next month in the area and I’m looking to get a 1/4 royalty and $1250 is the highest offer that I have seen.

7

Freedom oil and gas. Sticky point on the lease is they want the free oil and gas clause.

8

I have offers for this section that are very close to each other. How can I tell which companies are the most reputable? All include a no deductions/gross proceeds clause.

9

Shelly,

The 2 main oil companies that are doing the drilling in this area are the most reputable, they are EOG Resources and Unit Petroleum. They would be my first choice. There are other companies that lease for these 2 oil companies, McLinn Land Services and Calvin Energy have been leasing for EOG, they would be a second choice. And then there are independent guys that you have to be very careful with, if you use one of these always get a check in hand when you hand over a signed leased. Some of these guys will try to sell your lease to a third party at a higher price and they will try to wait until they get paid before they pay you.

There are some other clauses that you should have in your lease, I'm not an expert on that but there are some very knowledgeable people on this forum that can help you with that.

10

One question always leads to another... So, can anyone advise on what clauses, other that no deductions/gross proceeds clause should be included in my lease?

11

You need a two year cumulative time on your shut-in clause (not consecutive), you need a depth clause, you need to strike the warranty clause, you need a commencement of drilling clause, you need to consider whether you want no deductions or enhanced deductions, you do not want a top-lease clause. Those are the starter ones to watch.