I have some mineral rights in this location, There are several wells on this property but the production is fairly low. I recently had a company contact me and offer 2k per acre with no orri for a 3 year term assignment. I am trying to figure out if this is a fair price for this area. After some discussion I learned that they are planning on drilling much deeper than where the existing wells have been drilled. Im not an O&G person and pretty ignorant when it comes to all of this stuff so any help I can get is very much appreciated.
Are you an unleased mineral owner in these wells or are you subject to a lease?
I think I am subject to a lease. Exhibit A of the agreement shows the description of the land and following that says Oil & Gas Leases and lists a lessor and a lessee dated in may 1983 and refers to the book and page number of the county record. Like I said Im very ignorant about how these things work. My assignment is titled Bill of Sale and Conveyance and effective in 1997. I know there are at least 2 other wells on this property for which I have been receiving money. After trying to get myself more educated about all this stuff I talked with someone who thought there may be more wells than I am aware of. So I also need to learn how to research what is actually on this property and what I am entitled to.. I am pretty sure there are no other agreements filed with Grady County that affect my conveyance. My mineral rights may have been forced pooled but again I have no idea how that works or how to find out if that happened.
http://imaging.occeweb.com/imaging/OGWellRecords.aspx Enter 0307N05W in the "Legal Location" block and click "Search". Will show permits to drill (Form 1000), completion reports (Form 1002A), etc.
ftp://ftp.occeweb.com/dockets/docket/week.pdf Weekly report of OCC hearings. I run a search (aka Find) for Grady to be able to more quickly look at the related hearings for Grady County.
https://www4.oktax.onenet.net/GrossProduction/gp_PublicSearchPUNbyLegal.php Oklahoma Tax Commission website that you may find helpful, i.e., production information, etc.
Thanks for the help, much appreciated.
Thanks for the info very helpful. The only checks I have received are from Ward Petro. Do you hold royalty interests or working interests in these wells? If you have a working interest and were forced pooled, I would be interested in knowing how that has worked out for you or do you think it better to participate in drilling costs.
Working interest is participating in the drilling costs and operating costs for many many years. Not for a newbie. If you need more info about the pros and cons, friend me.
If you are already held by a lease which has current production, then you will probably not be force pooled because any new wells have to abide by the old lease. Unless that lease had a depth clause, then you might be. Are you sure they want an assignment or are they trying to buy your mineral rights? That might not be so good for you.
Thanks for your help. They want a 3 year term lease.
When I do a well search for this location, The Hill 4-3, Minnie1, Davis 1-3,Davis2-3,Davis 3-3, and the Ludlow1 are showing. Operators coming up in the search are Ward Petro, Cemoil Inc. and Ramsey Engineering, Inc. I assume the Ludlow is plugged. Does the Hill 4-3 not belong in this group for some reason? When I do a production search on the Hill, it shows gas production for 2016 (14845 MCF).
If your acreage is in a different spacing unit from those wells or you have an old depth clause, then that is why they want to lease. As Tom said, you can go for a higher royalty of 1/5th or 1/4. The terms of the lease are the most important. No post production costs whatsoever. Or you can wait for pooling. No guarantee on 1/4th unless that is common for the area.