Any idea of what is a FAIR Rate for 12 NMA to lease in Major County? Also what is the most that Royalty Bonus that would be possible. Finally - if we do lease - how long from when we sign the lease would be possibly get a Royalty Payment?
Any help on this would be greatly appreciated.
Thank you!
The general answer is “not much”. Bonus amounts are not public unless someone on the forum or at the coffee shop shares their offers. The closest you can come is from a pooling order within the last year in the eight contiguous sections touching your section. No poolings in the township are that close in that timeframe. The closest was in section 19 back in 2022 where they offered $300/ac @ 1/8th or $200/ac @ 3/16ths or $100 @ 1/5th. That gives you a rough ballpark.
Most savvy mineral owners would want the highest royalty and not the highest bonus. The royalties from a successful well(s) at a higher royalty will usually far exceed the one time bonus from a lower royalty. Patience is the name of the game for a higher payout.
You may either lease or wait for a force pooling. Once a well is drilled and if it is successful, royalties will be paid six months after first sales. You are probably looking at a few years before seeing royalties-if they drill. I see no leases filed at this time. It would be wise to get an oil and gas attorney to review any draft lease as they are not generally in a mineral owner’s favor and need significant edits.
I see Martha’s point on the pooling orders, but Lierle has had Major County at $1200/acre last year, too (I haven’t seen it recently).
Maybe I’m biased-- I own a couple percent of the Exxon leases in your section-- but I’d try to get closer to $750/acre for a 3/16 lease.
If it were me, I’d at least try to use Lierle as a bit of a bargaining tool. It’s worth a $50 county report.
Beyond that, a few other factors:
1.) Acreage in the major basins, like the Permian and Haynesville, seems to be tightening some. 2.) It is a very very rough rule of thumb, because Mississippian acreage can be spotty, but the further south you go in Major County, the better the acreage gets. Lucky you, you’re T20N.
3.) Comanche has been getting some good results for Major County, with wells producing 13 barrels per horizontal foot or more their first year. This is almost comparable to a T3 well in the Midland Permian, and Oklahoma has positive natural gas prices that the Permian doesn’t have.
For 12 acres, the worst case is you set your price too high and get pooled. They’re not going to walk away from a 640 acre section over 12 acres. And I think you look eminently reasonable by showing the landman a copy of the Lierle report if you’re going for an acreage bonus. But depending on the operator, it may be smarter to play for a royalty.
(I am not a geologist or a landman, just a shareholder who has done way too much research.)
May I ask if the lessor is Comanche?
Here we are. The Oklahoma Land Commission’s recent 12/2024 auction shows an $1111/acre bid for S6 T20N R13W by Comanche Exploration. I believe the State of Oklahoma is now at 3/16 for mineral leases. NOW, you’re 10-15 miles east of there (the other rule of thumb is the West is better), but you’re still in that same general fairway because you’re far enough south.
If you go to the Commission of the Land Office Website and click Minerals in the left hand tab, you can pull up past auction results.
I have offer from canvas on section 20 of 22 n 12 west. Also section 29 and 28 are open as well. What should I be asking for? There have been multiple wells drilled in the past 40 years in these sections. None are producing now.
Welcome to the forum. Looks like Canvas has a horizontal drilling play in the township 22N-12W. It would be wise to get an attorney to review any draft lease as the operator leases are not generally favorable to the mineral owner. Most of the recent leases are at 1/5th.
It looks like Canvas just signed a 3/16 lease with someone with the last name of Reames in your section. Beyond that, the CLOO auction just cleared with lease bonuses ranging from $350 to $1100 for Major County in December.
https://clo.ok.gov/wp-content/uploads/2023/10/Award Major (watermarked) - Book 002215, Page 0040-0042.pdf (470.2 KB) -Document-CLO-DECEMBER-2024.pdf