I am new to this forum and to leasing and was offered $500 per net mineral acre, three (3) year primary term w a two (2) year option to extend & 3/16 royalty for:
SECTION 30-T18N-R16W Dewey County, OK- Is this fair? I asked a few questions and this was their reply :
Sure, yes we are working on behalf of a mid-level exploration company that has a good footprint in the area. (Sorry at this time they have asked we not release their name, but as soon as the leasing part is completed we will file an assignment in the county courthouse and it will be public knowledge, I would say approx. 6 months from now.)
Yes, title has been completed.
As of today we have leased 283.302 acres in Section 30. Highest bonus paid $500.00 per acre, 3/16ths royalty.
All leasing will be completed prior to moving forward on any drilling (we are actually leasing in multi-sections around Section 30). Once the leasing process is completed, if they are ready to drill, the first step is to file for a drilling permit from the Oklahoma Corporation Commission, obtaining the permits, negotiating surface leases ect.. can take several months if not up to a year. (another note, when they file for permits with the OCC you will be notified by mail)
The Oklahoma Corporation Commission website, occeweb.com, is the portal to wisdom and a key to successful negotiating. Their search engine is ultimately easier than a good video game and potentially a lot more rewarding. Look for recent force-pooling decisions in your neighborhood and compare notes with the person you're negotiating with. Learn about EUR's (Expected Ultimate Recovery values) of any surrounding wells, although of course that is an ever changing function of the value of the oil and gas.
AllExperts.com\Industry\Energy&Environment\Oil&Gas is another good resource. Remember negotiating doesn't mean holding out and you can become quite knowledgeable with little effort, thanks to the Internet. Five years ago, over in 17N-15W, I got a lease with QEP, out of Denver, for a 25% royalty share just by asking for it, and $1,000/acre bonus to boot. Interest in that area seems to have evaporated for now however. Have fun and good luck.
I'd say sit on it for a while. For some crazy reason Dewey Co has been HOT the past couple years. I've leased every piece I have there. Some of which have been available for years. I'm currently negotiating one of my biggest pieces. If you get another call, tell them you already have an offer would they care to beat it? Then you ask for the paperwork to look over.......I've seen at least 4 different lease forms in the past year. They've got to be read over word by word. Seems fishy to me that they won't tell you who's leasing. That would be on the lease form you'll sign!!! What's the big secret?? I'm sure you can get much more informed opinions than mine but that's my two cents worth! LOL
Susan
Wooo Hooo R Ray Johnson!! You cooked a good deal there!!! Wanna negotiate for me? LOL
Susan
Thank you Susan and R Ray. Is it public record what other parcels have leased for & if so how do I look that up? I'm a Realtor & when a buyer asks me what a comparable home sold for I would always tell the truth - it is public record & I am bound by a code of ethics so when the person I'm negotiating with tells me that the highest bonus & royalty paid is what I'm being offered can I assume that it is an honest answer?
NOPE!!! Never! I learned that even more so this past year. I'd get a phone call offer. I'd tell them "send me the lease to look over". Then a couple weeks later someone else would call representing another company. You can almost infinitely play them against each other. I've had 4 different companies after one piece at times. Landmen are trying to get you to lease for the lowest possible price.
I don't know how to do the comparison look-ups but I just wing it....
Susan
Well I definitely don't see a trip to the county seat in my future! I'm in NY!
So excuse me for the dumb questions but so is a landman to oil leases like a broker is to real estate?- like a middle man- being that I'm a broker for 35 yrs I obviously see the value in what I do but is there any advantage of going directly to the oil companies or drilling companies who are drilling in the same area to see if they are interested?
Katrina,
You're catching on fast. I did exactly that five years ago in 17N-15W. Find out from OCCeweb which companies are drilling in the vicinity then just call them up and ask for their lease acquisition office. Have your data ready and ask if they have any current interest in your location.
I don't think there have ever been any licensing requirements for landmen (and women) in the industry, think "used-car salesmen." I think they are just independent sub-contractors who specialize in acquiring mineral leases and must have structured some incentives into their contracts. As you get deeper into the leasing process it becomes more strictly regulated, with rigorous title certification practices for example.
Good analogy on the Used Car Salesman moniker R Ray! LOL That's exactly it. They all love to say they're offering you the "Best Deal you can get" LOL . Right now I'm dickering over an Exhibit A clause against deductions. I get tired of listening to their crap. For many years I had a trusted lawyer in the area that looked over leases and negotiated the best deal for me. I've been trying to do it on my own these last few years and it's frustrating and tiring.
Susan
Katrina,
If you give me your fax number I'll send you what I have,
Susan
Hi,
I am a mineral rights neighbor to you. Section 30 - T17N R15W E/2 NE/4, I leased to Lowry, Sam Rose in 2009 @ $300.00 per net mineral acre. Then Continental Resources in 2011 Production began 12/2011. 1st royalty payment received 8/26/2013.
Hope this helps,
Susan Ortiz
That would be great thank you- my e- Fax is 631 236-1567
That was very nice of you Susan to take the time to fax your docs to me. You're in CA? How do people come to own mineral interests in OK anyway?! My Grandmother left me and 5 other heirs interests. It wasn't until yrs after her death that the attorneys discovered it. I've gotten a few letters over the yrs that I ignored- guess I shouldn't have ignored them.
I inherited mine from my grandfather. He was a Dr in the oil fields in the 1920's I think. Some he bought and some he took in trade for services rendered! Such a smart man! I made more $$ the first year I handled it on my own than he made in his lifetime. It's been a learn curve that's for sure.
Susan