I have a potential lease for 19, 1N, 5W but want to make sure it is a good deal because it is with an investment company. The offers are $1,400 per acre bonus at 3/16, $1000 per acre bonus at 1/5 or $400 per acre bonus at 1/4. Anyone know of any better offers? Or who might be looking to drill so I can contact them directly?
Marathon appears to be best guess based on the lease. You can likely get more bonus money from the investment company than the operator. Most are not investing in the lease to flip it to the operator. They are leasing it to allow them to take a working interest and participate in the well.
The bonus they (or the operator) pay you may not be the most important part of the lease.
Who is making the offer?
Frontier Energy out of Edmond, OK. I have an attorney that will go over the lease and Frontier has already ok'ed my mandatory Pugh, Depth, Shut-in and Deduction clauses.
United Prospects LLC out of Oklahoma have also signed some recent leases.
$2100 1/8
$2000 3/16
$1500 1/5
$300 1/4 are the amounts Continental pooled for in 17 catty corner to you. So your 1/4 is good, the others are low.
See the other posts, but the other thing to consider is the long term value of multiple Woodford wells if drilled. See the attached spreadsheet to get an estimate of value. Plug in your net mineral acres, your lease offers and then see what you think. You can vary the production amounts as well. For the Woodford, I have been taking the 1/4 since in the long term (and quite often, the short term) the payout is substantially better.
The closest well to you had a completion of 5 BBLS oil and 8733 mcf gas. So you could plug those numbers in and see if a gassier well makes a difference. I plugged it in with 10 ac and the 1/4 is better within two years. Or wait until Oceana is finished and use its numbers. Or wait until pooling when the offers will likely be the ones above or nearly the same since they are in the nine-spot.
Most likely to drill is Marathon since they have already filed quite a few leases, but I think Continental probably has a piece of it.
1732-NMACalculationsimplemodifiedfor3bonus.xls (50 KB)Thanks Rick
Thank you, M. Barnes! Thank you for your advice and for sharing the spreadsheet!