Elderly relative received leases in mail consistent with the others I have read about on the forum, ranging from $250/acre and 1/8 to $0 and 1/4 share. There is some small print about him owning mineral rights on .4762 acres of a block of 80. This sounds like those rights under a city lot? We are in Oregon and having a hard time locating the property via township and range, but he had a relative who lived in Tulsa at one time. Do the landmen blanket an area such as townsites and lots like that, get the leases done, and then sort it all out if the well hits? Is anyone else currently involved in leasing in this Section?
They have started filing the paper work to drill a well in 6 If your interest is that small I would take the no cash & 1/4th , however the terms of the lease are also important.
Thanks for your reply. We are in agreement on the quarter share. The lease says .4762 acres out of a block of 80 acres. I understand a 1/4 royalty to mean they get 75% and we get 25%. But how many acres out of the 633 acres in the section will they pool to split the revenue? In other words, if we wanted to take the option to pay our share of the drilling costs and receive a full royalty is there any way at this time to know what our respective share is, or do we just have to wait until the lessee tells us? If they use the entire 633acres making up section 6 does that make us approximately 1/2 acre out of 633acres?
Ron McKenzie said:
They have started filing the paper work to drill a well in 6 If your interest is that small I would take the no cash & 1/4th , however the terms of the lease are also important.
In other words, if we wanted to take the option to pay our share of the drilling costs and receive a full royalty is there any way at this time to know what our respective share is, or do we just have to wait until the lessee tells us? If they use the entire 633acres making up section 6 does that make us approximately 1/2 acre out of 633acres?
Yes, you have it correct. Your section is 633.84 acres, you would have 0.4762 acres out of the 633.84 acres, which equals a 0.000751293 decimal interest in the well were you to participate. A complete guess on my part but I would guess the well cost to be about $3,250,000.
All of the formations they would be chasing have been spaced 640 acres, or in your case 633.84, since it's a correction section.