Continental, Devon, QEP and Cimarex are the players in the area. They are drilling for the Woodford horizontally. Most of the drilling was in 2011, so looks like some new interest is building again. A newer play is called the Meramec.
I would proceed cautiously, but not in a bad way. Leasing is just starting again on the sections that were not drilled before. My experience has been that the first offers are about a third to a half low to what the final offers might be, so you don’t want to be the first horse out of the gate. If you don’t like the current offers, you can wait for force pooling, but that might not ever happen.
For comparison, Section 3 received $1000 3/16 or $0 1/4 in pooling in 2010. Section 1 received $1500 3/16 and $0 1/4 in 2011. A few years back for sure, but actually when oil prices were not as high as the last two years.
I have a more general question. I am negotiating a lease. Is net royalties saying transportation costs are included? Do transportation cost cut hugely in to the amount of royalties received?
Charles, you do not want any transportation costs taken out-that is what “net” means. They can start our very small and by the end, cut hugely into your royalty amounts. You need a special clause to prevent that.
My husband and I are pushing retirement age and we’ve been offered what we believe is a fair price for our minerals rights as a purchase. Our problem is we haven’t been involved in leasing our minerals for very long to gain much insight as to how this all works and are having a hard time deciding the best way to go with oil prices where they are and not having a crystal ball to know whether to stay in our get out and invest the money. I guess I’m asking what the con census might be on the near future in Blaine County. We have minerals in three sections-one is producing approx 100 barrels a day and the other two are not producing, but are leased. Any insight would be really appreciated.
Just as an FYI to others in the area, I recently received an offer from Liberty Minerals, LLC to purchase my mineral interest in Section 26, Township 15N-10W at “$4500 per acre, if your interest was leased on a 3/16 royalty.”
If I could just figure out a way to make Continental pay for the gas that was obtained sporadically from the same property between 1997-2010, without having to spend the entire amount suing them, I’d be a happy camper. If anyone has any helpful hints on that topic, I would be more than appreciative.
Felix Energy is pooling in 15-15N-10W. I have three offers on the table for that section-one of which is LIberty (way low on their offer to buy). Activity picking up.
Lori: if you wouldn’t mind giving the section/township/range of each property, that would be helpful. Blaine County is a big place, and the answer is going to depend a lot on your location. Until the Meramac raised it’s head, things had really slowed down a lot in Blaine County. There were some pretty good Cana Woodford wells in 14N-11W and 13N-11W, etc, but the best of the Cana Woodford was in the edge of Canadian County, and that’s where all the infill drilling has been happening. But things sometimes have a way of changing if you are patient for long enough. Anyway, those legals would help.
Some lawyers would be interested in a class action lawsuit, especially if you have specific information on this situation that would apply to many other royalty owners over a large area. The lawyers basically take a big chunk of the settlement as their payment. There are several firms that have taken various oil companies to task over this issue.
The Meramac wells that Cimarex and others have drilled in the general area are causing renewed interest in some parts Blaine County. A good bit of leasing has been going on in spite of the low oil prices. Cimarex in particular has been leasing in 15N-10W, 15N-11W, 16N-10W, 16N-11W, etc.
If you are in far eastern Blaine County then you are in Newfield Territory. They have a couple of big wells that hit last year in the Stack Play. You can find out more in their first quarter report on their website. Minerals in this play have gone for as much as $4500 an acre for 3/16, even after the oil prices dropped.
My sister and I leased our interests in 1997 for three hundred dollars each…and never heard more. In cleaning up estates of deceased parties, I was surprised when I found the old production amounts of the well on the Oklahoma Corporation Commission website. Money was never turned over to the state as “lost” or unable to deliver by Continental. I spent a small fortune having an attorney clean up the title and I and the other owners were paid by Devon, what was due for well production after 2010. In one phone conversation with Continental, I was told that indeed it appeared as though money was due for the well production and copies of all the ownership information were submitted. When I didn’t hear back from them, I attempted to call again, however, subsequent phone calls were sent to message boxes and never returned. My title attorney stated that he knew someone at Continental and would see if he could get answers over the phone. When that didn’t appear to work, I was told a letter was sent to Continental to which there was no response. Years are passing and I would like to get the mess cleared up. If anyone else in the area has had the same issue with Continental, I would appreciate knowing so that we could possibly proceed with a class action suit. Thanks for your help.
I agree with JW. You might want to use the next six months or so to do some research. The Meramac formation is getting more popular and the oil prices seem to be creeping back up. I think the end of 2015 and early 2016 will be better for us.
In general, when offers to buy happen, the first one out of the chute is probably half of what the property is worth. “Fair” is willing buyer and willing seller, but not always the “best” for the seller.
I just got an offer for $3000/ac and 1/5 royalty for leasing a section in 15-10. So you can see that the interest is building. If it were me, I would wait and see what the next year brings.
I have a farm and mineral rights (HBP) just immediately east of 19-15-10, so I’m familiar with the area. 19-15-10 has a fairly disappointing Cana Woodford well. However, all 3 of these properties are good prospects for the Meramac formation. Marathon, Felix, and Cimarex have all leased in the area and in your two other sections. The closest Cimarex Meramac well is in 23-15N-10W, and it has been making a solid 500 barrels per day, so it is a good one. Cimarex and others are doing more drilling and making plans to drill.
Selling or not selling is a personal situation, depending upon your age, need, etc. Most people would advise not to sell, especially with the good prospects that you currently have. But there is no sure thing. People have walked away from good offers in the past to later discover that no one was interested any more. Since you didn’t mention what your offer was, I can’t tell you if it was a good one or not. If you decide that you want to sell, keep in mind you don’t have to sell everything. You could sell half, or you could selectively sell, or you could make a higher counter offer. If it were mine, I would sit tight, but you will have to decide based on your own situation.
Thank you all for your thoughts and each of you have given me a lot of information to think about. Our offer was 4500.00 per acre for 19-15-10 and 3000.00 per for the others. My biggest fear is walking away, then no one interested down the road. I thank you for your help!
Matt, read the last couple of days for the sudden interest. It is up to you of course, but the area is heating up and I would not sell. Read the most recent Newfield presentation to get a feel for the area.
Net acres is the amount you actually own. Go to your mineral deed to find out. Sometimes they will say 10/640ths which means 10 net acres. See what the original parcel was. Sometimes it is 160 and you have a percentage of that.
I have received an unsolicited purchase offer for $5150 (along with 9 others for lesser amounts). This is “per net acre”. How do I determine “net acres”?Does anyone have an opinion on this offer, regarding amount, thoughts about near and far future offers, have ideas about why the sudden interest?