I received a lease offer from Capstone Land Company in Cleveland County, Section 10 07N 02W NW/4 NE/4. $350/acre bonus, 3 year lease and a 3/16 royalty in case of any production.
I don’t see that anything is happening in that area, but I need to poke around some more. Does this sound like pretty much a standard deal? What should I watch out for?
Suspect that they are working for an operator who is planning multi unit horizontals. Having just read a Capstone lease in that township, you would be wise to get an oil and gas attorney to review any lease for mineral owner friendly clauses. The draft lease was a very generic operator slanted lease and need substantial changes. If you cannot get them to budge, you can wait for force pooling and select your preferred option then.
I received one in McClain County. No bonus. What do you know about them?
Right now I know very little about them. Sorry.
I think getting advice from an attorney would be more expensive than any payments I might get. But I’m not real sure about that either.
I’m going to keep doing some research.
Remember that horizontals have many more feet of horizontal perforations, so the production is higher than conventional vertical wells and there may be infill wells is the first well is productive. Your royalties will depend upon the net acres, spacing acres, royalty rate and percentage of the perforations in your section versus the whole well length. You can wait for pooling if you do not feel comfortable leasing.
Thank you very much for your quick response. I just found the MR Forum yesterday. I read as much as I could in an afternoon and really enjoyed your comments and advice. I’m like a fish out of water on this matter. There’s so much language that’s unfamiliar (foreign!) to me. On its face the amount of money being offered hardly seems to justify the time involved in processing all of this, much less hiring a lawyer to check it out. However, I do understand that it’s about oil and there’s a chance something good will come of it. I just don’t know what the prudent thing to do is.
Actually, I don’t understand what pooling really means, even though I read about it. My landman relative recommended “participating” by paying my share of or drilling expenses, etc., because the potential profits could be significantly higher. But what about the on-going operating costs. Obviously, I don’t know what I’m doing!
Thanks again for replying to me.
Don Criswell
In my opinion, participating is not for the novice unless you really deep pockets, decades to deal with working interest payments, can afford to hire a good oil and gas attorney and accountant and pay for liability insurance… You might find these publications useful.