Crawley Petroleum reached out to me mentioning they are drilling in Blaine County. The offers for leasing were 3 year, $600 per acre at 3/16th OR $450 per acre at 1/5th. Section 5-18N-12W
Has anyone received other offers? Is this a decent offer?
Thanks! David
Last OCC activity in the township was in 2020-21 by Staghorn. They were in sec 31 & 33, They are back leasing in 33 this year.
Crawley has filed a few leases in section 6 at 3/16ths and 1/5th. Derby is leasing in sec 15 @ 1/5th.
If you have not leased for a while, it would be wise to get an oil and gas attorney to look over any draft leases. Most of them are not in the mineral owner’s favor and need some critical edits.
Thank you for the information and your advice. It has been a bit since we’ve leased. I will begin a search for a reputable oil and gas attorney.
We got an offer from Crawley as well. Also one from Allegiant Exploration on that same section. Not sure what’s going on. Sounds like Crawley’s application closes 20 days from 12/22/22. (Sorry if I don’t have the terms right.) We’re wondering if we should lease or sell the mineral rights.
Suggestions and comments welcome.
Thanks, Chris
You can lease or wait for force pooling. Multiple offers is an indication of coming drilling, so I would not sell. Some parts of Blaine are heating up again with multiple wells being drilled.
Thank you for the suggestions, Martha. Two questions. Is there any advantage/disadvantage to taking the offer of $1,200/acre lease or going with the forced pooling rate of $800/ac for 1/8th? (aside from the greater payout.?) And, can we sell to them if we lease to the higher offer company? Would that diminish their interest? Their low ball offer to buy is not acceptable to us now. Thanks!
The pooling will most likely have several options including 1/8th and 3/16ths and maybe 1/5th. You can always sell. Offers for sales are usually higher with higher royalty leases. Offers to buy (in my experience) have been for the value of my current production and not for any future production as that is where they intend to make a profit. Our family would rather get the royalties so we do not sell. In general, if the well is successful, the royalties at the higher royalty rate choice far outweigh the bonus at the lower royalty rate.
I suspect any new well will be a horizontal well.
A fact to remember, the Pooling Applicant must testify to the fair market value for the nine Sections surrounding the Section being pooled. Transactions included in fair market value calculations must have occured prior to the Force Pooling Application filing date.
The transactions are supposed to be within the last year.
Thanks for the observation. That makes sense.
Nice to have options. My brother is likely to want to keep the the rights for his family. My wife and I are thinking it might be wise to sell since our situation is different. Thanks much.
My point was that transactions that occur after the Pooling filing date aren’t valid for fair market value calculations.
The applicant doesn’t have to mention “multi-tract” deals which may include acreage outside the nine sections or multi-tracts with family members or allied groups. Frequently, those have higher offers, but no one mentions them.
Be aware that buy offers are usually for a discounted cash flow analysis of current production and not for future production of additional wells. That is how they intend to make a profit.
Absolutely correct! Multi section transactions are not apples to apples… are not generally part of the hearing testimony.
This topic was automatically closed after 90 days. New replies are no longer allowed.