I just received a letter yesterday informing me of a lawsuit they have filed to drill on my section (13-20N-4W) of which I own 1/4. The suit itself is a "Relief sought: Establish Horizontal drilling and spacing units." It also mentions that the unit should be formed as a "governmental section." The hearing is to take place on New Years Eve @ 8:30am (weird!!).
I'm curious if anyone has heard of such a thing as suing to drill on my land. Also, what a "Governmental Section" refers to. Any help would be appreciated, as I am very new to this.
This sounds like it was filed in the Oklahoma Corporation Commission and has to do with establishing a drilling and spacing unit.
This sounds like a normal process.
Thanks Matthew. Yes, at the top of the documents, it states, "Corporation Commission of the State of Oklahoma." What has got me puzzled is how or why they have to sue to h-drill on my land? Thanks in advance for your reply.
They have to sue (administrative action) to establish what the drilling and spacing unit will be. Whether they can drill in a 640 acre (one section unit) or 1280 (2 section unit) or 160 (1/4 section unit).
The documents you have received will state what releif they are requesting.
Devon has filed a spacing for sections 12,13,15,19,22,27,20n-4w . The next step will be to file for Pooling which they have done in 14 and 23 which have wells . 14 drilled from 23 had first production 8/21/12 and tested 69 BOD & 326 MCF , 35/64 choke No report on 23 yet. The pooling order for 23 dated 6/27/12 ordered them to pay $250 for 3/16. Pooling for 14 dated 8/21/12 ordered $350 for 3/16.
Thanks Ron!! You're a resourceful guy, and I can't thank you enough for that. I have no idea what "35/64 choke" is...lol. However, is $250-$350 per 3/16th lease a good price? Also is that all I would get or is that on top of the BOD production? Thanks!!
That is on top of any production. It might be a good idea to take your time. You see in my post above it went up $100 in two months. If you have a 1/4 section they will want it bad. The price is not all there is to think about,terms of the lease are very important. Let me know if I can help and there are others on here who can help.
Hiya Ron, yes I saw the $100/acre increase over a short 2 month period. Before he died, my Grandfather signed a 3/16th lease that runs out in August of 2013, for a small amount of money ($11,000). The lease also states that the company (Barton Land Consultants) has an option to renew the lease in August for the same terms (3/16ths @ $11,000). Knowing him the way I did, I'm sure he believed there was nothing there in terms of oil or gas, and he saw it as free money; as there hadn't been any lease offers on that land since the late 1950's when there was a very shallow well that didn't produce much oil. I'm sure if he knew there would be any activity in the area he would have asked for more money and a non renewing lease. However what's done is done, and its up to me to make sure that Myself and my 87 year old Grandmother do the best we can with this opportunity.
I want to thank you for the info you've given me, as all this is new to me. I'm College educated, but had exactly zero classes dealing with mineral rights (hangs head in shame...lol).
I am curious as to this "bonus" pooling money which would be awarded to us through the spacing lawsuit Devon has filed. Say the pooling price ends up at approximately $50,000. Do we get all of those funds or do we get 3/16ths of those funds? My assumption would be all the funds and the 3/16ths part deals strictly with production if and when wells are drilled.
PS: The Devon hearing is on New Years Eve AM @ 8:30 in OKC (I believe). Using your terms, that if I have a 1/4 section they would "want it bad" is there anything I could/should do regarding this hearing, or is it a waste of time to drive 4 hours there and back just to have a judge say "Here's the price?"
Thanks again my new friend, I am truly grateful for this advise, and wish I could do something in return.
If Barton has the lease when Devon files the pooling they will be the one to get the bonus and you will get the option money and 3/16 of the production from your 1/4 of the section. The good news is if they got a well that produced at the rate of the test on the well in 14 in the post above the 3/16th on your 1/4 section would pay about $9,250 a month before taxes and any allowed deductions in the lease. Remind me to check you section from time to time because you won't get notice of the pooling that will go to Barton.
Also If they drill a well before Barton has to take the option you won't get the option money because the lease will be held by production.
Thanks again for the info Ron. I can't begin to tell you how much your advise is appreciated. However I've got to say that it really stings (Barton getting the pooling money). So if I am understanding correctly, all I can hope for is that the well hits and produces at a good rate.
One last thing, if they do drill before Barton has to take the option (lease held by production), does Barton automatically get the 2 year extension written in the original lease without having to pay the additional $10,000; AND will it remain at a 3/16ths royalty? From the way I am understanding you, what this now comes down to is when the well is drilled.
Yes If the well is started before the first lease runs out and there is production they won't need to renew the lease because it will be held by the production from the well and yes it will be for the 3/16. Also there is a fair chance that they would put more then one well per section and you would have the same interest in every well in the section. We have an interest in a section in Grady Co. they are drilling now and they have drilled 7 wells in the section next to it.
Ron, I sound like a broken record, but thanks again for the education on this topic. Congrats on your 7 well potential by the way. If anyone deserves some good karma coming their way, its you, for all the help you've given me.
One last thing and I'll quit bugging you....the extension written into the original lease goes through August 2015 (began 2010....3 years with a 2 year extension option). If the well is "In production" or "held by production" after August 2015, is the lease with Barton over and done with, or does Barton hold the lease indefinitely?
Once a well is in is production the lease is held by production as long as the well has production. There might be some loop holes on the deeper formations below the production, but I would have to do some research on that and it doesn't come in to play now.
I was afraid you were going to say that....:(
Thanks again for all your help, and as a good friend of mine from the UK would say, "You're a brilliant bloody Rockstar."
Take care, and best of luck with your minerals. I hope you get some serious results. I'll post any new details regarding this section of land as soon as the information becomes available to me. Again, I can't thank you enough.
The hearing was postponed until Tuesday Jan. 8th. We'll see how it goes (keeping my fingers crossed).
Spacing order went through on 01/08/2013, but nothing else was done. I'll keep everyone informed as soon as new info comes this way.