Grady County, Sedtion 31, 08N, 07W

[Mark_Hilliard]

I have received two offers to lease my mineral rights. Both companies, Citizen and Camino have sent me notices of them going before the corporation commission for “relief sought” for the purpose of drilling multi-unit horizontal wells. I do not understand how two companies can be submitting information to the corporation commission to drill on the same property.

From information received, It looks like one company is planning for two horizontal wells and the other is planning on one. The lease offers are similar in lease bonus and I have requested a 1/5th royalty on both. The current offer from both companies is considerably more than their original offers and the suggested pooling amount mentioned in a letter received on 7/7/22. If lease offers are equal does it make a difference on which lease to go with? I have been told by both companies that they have gone as high as they can on the bonus amount. Any suggestions?

[M_Barnes]

It is quite common to have two companies or more compete for the same acreage that they deem economic. Sometimes, they will settle out of the court system or they will wait for the hearing. You can either lease with either one of them or you can wait for the pooling. Both are experienced operators. It would be advisable to have an oil and gas attorney go over both leases and suggest edits which will be more favorable to the mineral owner. The drafts are usually not in your best interests. The clauses in the lease are much more important than the bonus money in my opinion as whether or not you pay post production costs is likely to be more financially important. Pooling is another option which many prefer.