I just got a lease offer from Eagle Road Oil for 60/ ac 1/8 royalty or 50/ ac 3/16 or working interest on a mile long horizontal well they propose to drill. I enough to know the upfront money in this case is not enough to worry about, but I was wondering if anyone has gotten more then 3/16 royalty. They gave no other information on the lease, only to say they are fixing to file a pooling application and that this offer would expire in 30 days or when a Pooling Order is issued. What happens when a Pooling Order is issued. Can I be stuck with 1/8 or would I get the best offer 3/16??? My last question is they sent this letter 06/21/18 to an address I haven’t had in over 30 years, how do I up date my address in the county record system.
I also own minerals in Sec 32, T14N, R08E, anything going on there,
Thanks John E.
I didn’t see any offers above a 3/16, but it never hurts to press for a higher royalty. If you feel confident they’ll drill a well, you could even forgo a portion of the bonus for a higher royalty.
I couldn’t find any comps in your T/R, but there were some from 2017 that were roughly 6 miles away. $125 | 1/8 or $100 | 3/16
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As for the Pooling Order, you typically get to choose one between a few options - pretty similar to what Eagle laid out. The Pooling Order ultimatum is poor taste in my opinion, and could be a scare tactic. From what I understand, it’s easier to just work with the landowner (if they’re reasonable) than go through the regulatory hassle of the order. To each their own though.
Oil companies get their contact info from a number of sources, so it may not be the county’s system. However, if your tax address with Appraisal District is 30 years old, you should update that with them.
Lastly, your T14N, R8E property. Again, it’s not the hottest area in OK, but there are a few comps within the area. Up to $175 | 1/8 or $150 | 3/16 - I did notice a couple of 20%ers in there as well. The comps directly next to your property didn’t appear to go to well at auction.
Best of luck!
Thanks Bhiggins, very helpful, I will check with Creek County Appraiser to see about updating my address. Thanks again-- John E
I assume you don’t own the surface rights and only own mineral rights. If so, Oklahoma has a severance tax and does not otherwise tax severed minerals. The Creek County appraiser will not be able to help you.
You do want your address on file with the Creek County Clerk. If the instrument conveying the rights is current and correctly indexed to the owned property, I feel you have met the requirements of notice of address. This should be (I’m not an attorney) valid to reverse a wrongful pooling resulting in no notification and a default election.
It appears you moved them into a trust 12/2017 and there is an address listed. Was the lease offer to you or to the trust? It is possible the data was pulled prior to you conveying the interest into a trust. I don’t see an older conveyance to you.
Here is Creek County’s database.
http://24.173.220.139/creek/start.aspx
I file an “Affidavit of Ownership” on properties that have no address indexed in the County Clerks pages. This has the contact info near the very top of the document. Yours was at the bottom and could have been missed if the offer was made to you as trustee of your trust.
In a pooling you “should” get all of the royalty interest options that have been offered. There are many pro and cons of leasing vs being force pooled in Oklahoma. In my opinion there are few that lease with better terms than an eventual pooling order will give. But, by far the majority of the leases we have entered have expired without getting drilled. But it is a far deeper conversation than that. You sure don’t want to be pooled and not make an election.
Thanks Rick for your help, I will check out the link. I was Quit Claimed the property from my mother and the deed said Real Estate, but as far as I know I only own the minerals under ground. The lease was addressed to the trust, but there was no address on the deed itself. but was sent with the deed. You said an address was listed, so I’m thinking my next action is to get a hold of Eagle Road Oil and give them my correct address. Any other suggestions would be appreciated. Thanks John E.