Hello, Can anyone give me the positives and negatives of potentially entering into a multi-sectional lease? I am considering an offer in Grady Co. to obtain a 1/4 royalty in 3 sections. Any input would be appreciated.
Do you own minerals in each of the three sections? If so, my recommendtion is to lease each one independently on an identical lease. If the pending well is a three section well, it may or may not make it to the second or last section, so you do not want them all held if there is no production on only parts. I have been burned by old family leases that tied up two tracts together. Each section will have a different percentage of perforations for the well.
If you have never leased before, get a good oil an gas attorney to review the draft lease. They are generally not in the mineral owner’s favor, so need significant edits to protect you.
Ms. Barnes thank you for the quick response. Yes I do own minerals in all 3 sections and you confirmed my inclination to not tie up all three under one lease. I have leased before and I was trying for the 1/4 royalty but the only way they would offer it is if I brought in the other sections. I am going to decline that offer and may consider 1/5 and a bonus for the one section but also I may wait a while and be patient to see what else comes in. The original offer was for Grady 33-5N-5W by the way. Thank you again!
I think you might have a perception of wording situation. Tell them that you want a multi-section deal, but each section will be on its own identical lease because it will keep your accountants happy. They want to tie them all up, but you want the 1/4th royalty. If you cannot get with them, I suspect you can get it with someone else. If the well goes through all three, then I would lease them all at the same time. Or you can wait for pooling. Or a combo.
Are you already getting paid on the Leda Sparks well? It goes to the Woodford. Did you lease or pool before?
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Appreciate the great thoughts! Thanks again!
and yes I am getting paid on the Leda Sparks where I leased.
Check your current lease on 33 to see if you have a depth clause. Not sure why they are trying to lease you again if your are held to through the Woodford. Ask the agent what zone he is interested in.
Do you have the mineral rights in sec 4 and 9 to the south? There are new permits there.
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