Does anyone have any information regarding Grady County 76N 7W? Has anyone else received offers to buy?
Do you mean 7-6N-7W?
Have received about a dozen over the pass six-twelve months. High is only 8K/acre — not enough
if I get 18k offer I may think about it…
Bud- Important for you to say not enough for you. Others don’t walk in your shoes & may have needs you don’t have.
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What about offers to lease? What would be a reasonable offer?
Thank you!!
Can you clarify the section please. I can look up if there are any recent leases.
Assuming you meant 07-06N-07W of Grady County, there has not been a lease filed since 2018 that I have been able to locate. So it would be hard to justify what one person has deemed a reasonable offer. The OG industry has changed significantly in Oklahoma over the last 5 years. The lease bonus’s we saw in Oklahoma in 2012-2018 time frame are long gone. Your township is primarily dominated by gas production, I would focus on getting a higher royalty, as the lease bonus probably will not exceed the $500-$1000 range. If you were to consider selling your minerals, IMO anything over $10,000/acre would be an absolute steal as the production is not there to justify spending that.
@M_Barnes. What about an offer for $10,000/acre in 13-6N-7W? There is a large volume producing well and we receive royalties of 1000-2000/month. We receive offers regularly, just not sure what is a good offer with this situation.
Chris, first I would say everyones financial situation is different, we all have different wants and needs. Secondly, on your production that you are receiving $1000-$2000/month on, how many acres is that covering. Is that monthly check a combination of all your properties, or just the property in 13-6N-7W? If you’re making $1,000-$2,000/month, than your making $12,000-$24,000/year. I would multiply the $10,000/acre toward how many acres are in that property, and compare that total payout to what you are making yearly off the property. Then take into consideration how many years of production it would take to reach that number, etc.
However, your acreage in 13 may be worth holding onto unless you need the cash now. Camino has a DUC just one section to your west that was spud 10/21/2021 and Continental has several permits filed just 2-3 miles to the east of you. This does not mean that your section will be next, but it does show that there is positive speculation about production in your area. At the end of the day its a risk reward game, Camino has your section HBP as long as Tyler 13-24 is economically profitable so they do not legally have to do any infield drilling.
Some offers are based upon the production from only the first well with a discount factor for the time value of money for the life of that well and a profit built in for the buyer. Some others are based upon the first well and the potential for other wells in the future.
Horizontal wells production is highest in the first two years of the well and then drops off quite quickly, but then flattens out for many decades. Picture a hockey stick. The blade is the first few years and the handle is the long life. Your revenue is likely to continue for a while. And there may be more wells if they are economically viable for the operator.
You can have your well evaluated by a petroleum engineer and they can give you an estimated value for the life of the well based upon a certain price scenario. Then you will have a feel for a base level. You have several options-ask for more, don’t sell, sell part, sell all. Speak with your accountant as sales are sometimes accompanied by a capital gains hit (which the buyers never seem to mention). Your royalties are also taxed, so that is a factor that you are already seeing.
Yes, thank you for clarifying. I did receive a lease for 850 and car for a 3yr. lease with a 3/16th royalty.
No, not a car! $850 an acre for a 3 yr. lease with a 3/16th royalty. Auto correct!
kakins
Be sure and include your no deduction clause… don’t forget to ask for more Royalty also no warranty
Lots of people miss major revenue by not doing that
I always ask for what they are offering for a 1/5th lease. Or I wait for force pooling.
Thank you so much for your advice!
I have received a lease offer for Grady Section 7, 6N, 7W. Originally the offer was $600/acre with 3/16 royalty. After brief discussion I was offerred $750/acre with 1/5 royalty. It has been several years since anyone expressed interest. Curious if there have been other offers out there recently.
Personally, I always ask for the 1/4th option as well. Todco was leasing in late 2021 in section 4, Camino in mid 2021 in sections 14 & 23. Marathon in 23, Continental in 26.
Camino drilled the Joyce Keeling 0607 in 23 & 26 and the John Keeling in 23 & 14. Red Wolf had OCC cases in 1 &12 recently. 2 & 11 were pooled at $4250 3/16ths, $4000 1/5th and $0 1/4th back in 2019. Not seeing that high this year.
Suggest that you get legal help on any lease. The draft lease they send you will not be in your favor and will need negotiation.
The Joyce Keeling and John Keeling were both drilled by Camino. They were listed as “active” on the OK Tax site, so are online now. Division Orders will come out in about May with first payments probably in June. They also drilled the Michael 0607 11-2 with a surface location in section 13.
There was a pilot hole drilled by Unit back in 2018. It was called the Dobie 18/7 XL, but they never drilled the horizontal portion. Wonder if someone is coming back in to complete that one??
Thank you. From reading many posts (a lot of your input, thanks for that) I know about a no deduction clause and a limited shut in clause time period. I will definatey have an attorney take a look. Received the lease today and as you note, it is not particularly favorable.
Another question, I recieved a final order for the commision Multiunit Horizontal Well for my property in Grady, Section 26, 6N, 7 West (The Joyce Keeling you mentioned). It reads as it is in favor of Camino. What does this mean?
Camino was granted operatorship and permission to drill both Keeling wells. Congratulations!