Hello,
Our family recently received news on Easter that we are involved with 60 acres mineral rights in Oklahoma. Much to my surprise they are located around a sweet spot in Grady County. I believe our family owned the land at one time. The property was sold but we retained the MR. Can one of you nice folks fill me in on the status of section 28-6N-5W.
The producing well is called the Pipkin. We are not interested in selling.
Thank you,
Ross from So. Cal.
Ross - be patient. Someone will know.
John
Ross,
Force pooling is when an operator has gone in and leased at least 51% of the mineral owners in a particular section of land and they want to drill a well. So they can force pool the remaining 49% of the mineral owners. This means that they usually offer you three different options to lease. When a mineral owner leases his minerals they are provided with a up front cash consideration (bonus) which is a cash number multiplied by the number of acres the owner owns. Say $1,500 per acre x 20 acres. The owner also negotiates a royalty number which is the percentage the mineral owner gets from their proportionate ownership in the well. Usually one of the following numbers: 1/4th (25%), 1/5th(20%), 3/16ths (18.75%) and the less common now-a-days 1/8th (12.5%).
Usually when an owner is force pooled they declined to lease when the company was first taking leases or maybe the company couldn't locate or get in touch with the owner or a few other reasons. When normally leasing the mineral owner is free to negotiate his own bonus amount and royalty with the operator. So when force pooled the owner will be presented three options to choose from. One with a high per acre up front payment and a low royalty amount. A middle choice with a medium up front per acre payment and a decent royalty amount and then a low up front per acre payment and a high royalty amount. So you are choosing whether you want more money up front or want to wait for a well to be drilled and get a larger percentage of the royalties.
That is a very rough explanation of force pooling. I am not sure about current activity in your area, that would require some research on the OCC.
Cam
Ross:
If the time to respond under the Pooling Order is over, generally 20 days after the date of the Order, NO, you can't negotiate anything and your interest is subject to the terms of the Order.
There is no need for a lawyer. I have attached a copy of Contiental Resources, Inc.'s Increased Density Application wherein they are going to drill another Woodford well in this section very soon.
Good Luck to you.
Todd M. Baker
104-Sec.286N5WGradyCo.Inc.Den.pdf (433 KB)Ross: Terms were negotiable until the date of the Pooling Order. All parties could choose different options before the pooling and in the actual Order itself. What is the name of the party you have inherited from and I will do some checking to see if I can find out if they were pooled or actually signed a lease. You need to contact Continental to arrange with them to get your interest in pay status from the Pipkin well and any new wells that are drilled.
These days, most of the increased density wells are horizontal. You have to read the paperwork to tell. You have the Pipkin #1-28H (horizontal) well which is lined up on the far west side of the section. Think of a cigar in a cigar box. You have room for quite a few more wells. It looks like section 21 just to your north has seven wells. So now think of six more wells lined up in your cigar box right next to each other. They are spaced properly so they will drain the most efficiently. I am not saying you have that many-they just have the request for one more, but the exhibits from the hearing will give an estimated ultimate recovery and you can tell by the numbers what the expected total wells might be.
If other members of your family leased, each one could have made a different decision on their bonus and royalty rate. If you are pooled, you must make a selection from the options they give you within 20 days or they assign you the lowest royalty. Usually, if family members stick together, they can get better terms, but each signs their own lease.
The Pipkin well was drilled in 2014, so you are held by production (HBP) by that well and also held by the terms of the lease or pooling that went with that well. If you inherited since then, you need to contact Continental and get into pay status. You may need to probate a will or do other title work to prove you are the correct owners. That is a nice well.
Very informative, and we thank you. Sorry forum for sounding like an ignoramus. lol We are working on getting a copy of our pooled lease agreement now. None of us are planning to quit our day jobs. We have all interest in 1/3 of 60 acres. There are 20 acres for my mother, aunt and uncle to split. I believe someone said our pooling order included $1000 per acres and 3/16 royalty. Thank you,
If your ancestor was pooled, here is a copy of the Order of Pooling. Think of it as a lease outlined by the Corporation Commission.
201401140%202014%20Increased%20density%20map.pdf
This is a map from 2014 that showed the wells back then. The Pipkin well is the far west side of 28. The strange cigar shape is roughly the size of the drainage area. They had proposed another well back in 2014, but did not drill it. 201701141 Section 21 has seven wells now.
Pipkin%20reserve%20estimate%202014.pdf
This one is the Pipkin reserve estimate and the estimated ultimate recovery of that reservoir for the whole section. 2014
The new well request 201800952 is planned to be a three! section well in 21, 28, and 33. They will have similar exhibits posted after the hearing of where the well will be. This new well will be 1320 from the east line of the sections.