I have inherited mineral rights from my father who passed a few years ago. I have questions in regards to a leases I signed. Did I do the right thing? Is it a good deal? and Does anyone know whats going on in this area Mobile County, AL.
1st. The 2 different lease terms in Mobile County, AL are 3yrs or for so long as oil and gas are being produced. 1/5 or 20% of the value of oil and gas produced, with a signing bonus of $50 & $75 per net mineral acre per lease.
Is this a good deal.
2nd The areas are Sections 4,5,8 & 9 Township 1 South, Range 1 West and Sections 21 & 28 Township 1 South, Range 1 West
The company is planning on re-entering the Newman 21-11 well. If anyone knows anything about the Turnerville Prospect or Cold Creek Field Prospect in the mentioned areas above It would be truly helpful.
3rd I am a Golf Pro so I am really out of my element and currently unemployed as well as my wife. Suppose this hits what kind of time frame am I looking at in regards from siging lease to, drilling to producing, to cashing a check. I pray this hits as life gets more stressful everyday.
PS this is a reentry well with that got fouled up previously in 2006 and I found out that the operator is now waiting on a rig. How long can that take? I know there is a shortage of rigs.
Thank you,
Grant
Grant:
First of all, what county are these minerals located in? It appears there is some activity in Covington County which is located in the far South end of Alabama. The 3 year lease term and the 20% royalty sounds good but the $50 - 75/acre might be on the low side. This $/acre somewhat depends on the activity in the area and I am not familiar with the Alabama area in general. If you will click on "Groups" above, go to "County Groups"; then find Alabama, there are three counties listed including Covington County. You might want to post at this site as these are individuals with an interest in Alabama. As for your 3rd question, when you sign a lease, it could take the entire 3 years and still no activity depending on the amount of drilling prospects in the area. If and when a well is successfully drilled, it could be several months before a check arrives. In ND, most wells are on a "confidential" list which means 6 months before information is even released on a well. You will first get a division order in the mail after a well has been successfully drilled. The company will process the information to verify what you own along with the terms of your lease before a royalty payment is made. In conclusion, this will most likely become a lenghthy process and not something that will occur within the next year unless you are extremely lucky.
Thanks for the info I will forward this post to the Alabama County groups. I will keep my fingers crossed.