Hello all! New guy here.
We've just been offered a fairly notable lease on our mineral rights in the above section -- $800 + 3/16, $500 + 1/5, or $0 + 1/4. We've had the rights for over 20 years, and we've signed a few little leases in the past that didn't turn into any production money. This is the first time anyone's offered a notable amount, and we've had three inquiries this time. The above offer is the best of two, and the third "offer" was from a guy that essentially wants us to name our price.
I hope that info is useful to you all, and I also have a few questions I'm hopeful someone can answer for me.
(1) Can anyone tell me what some of the upper-end leases in our area have gone for recently?
(2) If you were in my shoes, what would you hold out for?
(3) Since we've never seen production income from our past leases, we have no idea what the bottom line difference in income might be between 3/16, 1/5 & 1/4. Can anyone give any guidance? I know there are no guarantees, but we have NO idea what we're looking at.
Thanks all. I gotta say, I was amazed to see that this group exists. What a great thing.
Walt
Who is offering? How many acres do you own?
Continental is the front runner. We have 10 acres. They've approached other family members as well who received adjacent rights as we did through inheritance.
Newfield and Continental are the main companies to deal with. I would consider the 1/4 royalty with no bonus up front because all of the action (drilling) that is currently under way for the last 2 or so years. Just read the back pages for a feel of what is going on. There are plenty of great people on here that can inform you better than I. We currently have acres in 3N 5W and 6N 5W with wells in each section
Hello Walt;
We too have received two lease offers in the past week for 4 N 7 W section 25 in Grady County in which we have 160 acres. Your lease proposal sounds like Continental Resources since it is the exact proposal that they gave us. The other proposal that we have received is from Oil Valley Petroleum for 850 per acre w/ 3/16ths with the indication that if we thought that we needed more that he would see if that was possible or not. Presently we are holding out due to much higher lease prices both to the adjacent east and south to see what time will bring reference this SCOOP concept that is being touted. Please stay in touch with offers and we will do the same... Alan Payne
Thanks for the quick responses everyone. Alan, I will indeed keep you up to date on what's going on.
Can anyone offer any ballpark ideas on royalty payments -- specifically comparing 3/16 vs. 1/5 vs. 1/4 in real dollars? I'm sure it varies wildly, but we just need something we can wrap our heads around.
If 3/16 = $100
... 1/5 = $106.67
... 1/4 = $133.34
Here is a spreadsheet I borrowed from the Stephens County forum. It was setup using the 3/16th royalty, but you can change the formula to which ever royalty you choose. 3/16 = .1875 ... 1/5 = .20 ... 1/4 = .25
1919-NMACalculationGradyCo..xlsx (10.9 KB)
I’m in 24/4/5 and recently leased for more than you were offered.
Thanks Don. That's a huge help.
Janet, I'll understand if you don't want to discuss specific terms, but I'm dying to know them! If you send them privately, I promise to keep them private.
Last question (I think). What would be some typical levels of production you all see -- oil & gas both -- either in Grady or nearby?
Thanks again everyone. All this help is fantastic.
McLemore Trust Completion Report About 5 miles NE as the crow flies from your section.
Berry Completion Report About 6 miles NW as the crow flies from your section.
These are the two closest wells to your section. The top of the second page of each report will give you the initial test data for the well.
About 4 to 5 miles east of your section I have some family that leased to Continental for $1,500/acre with 3/16th royalty. I believe Summit was the leasing company.
Beginning 15 miles almost straight north poolings are going for $2,000 (7-6N-6W) to $2,650 (5-6N-6W)/acre with 3/16th royalty. The bonus money really jumps when it gets close to the pooling time.
You all have been such a huge help! Thank you! I'll be sure to post the final specifics, once the dust settles, in hopes that it helps others with their decisions.
Walt
Recently leased some mineral acreage in Central Grady County at $300 and 25%.
T.S. Dudley leased some of mine for $1400/acre and 9/40th(23%).
There is a lot of leasing activity in 4n-7w at this time from one end of the township to the other by Unit, EOG, Vitruvian, LE Jones & Enercore. I suggest a good exhibit “A” with Pugh, depth and no deduction clauses. My friends have been getting $1000 and 1/5 royalty on multi section leases. Patience is a good virtue. As available acreage positions become scarce offers will go up.
While there has not been any OCC activity in the township in the last three years, Marathon, Continental Resources and Apache have been active in the township to the east which adjoins your east property line.
Partnership lost a lease recently due to "Pugh" clause. Would like to know what it means if anyone would explain to this newbie.
I suggest you search this one, on this site or Google. You will probably get more than you ever wanted to know.
R.Jackson said:
Partnership lost a lease recently due to "Pugh" clause. Would like to know what it means if anyone would explain to this newbie.
I would like to talk to you more about your interest. Please message me
Thanks again to all who have helped us on this issue. We got the deal we were looking for. Patience is indeed a virtue. If we were game-players, we could probably hold out for more and play the three interested parties against each other a bit. Not my style, so we probably left a few bucks on the table, but we're happy. If anyone wants details, I'll be happy to discuss via private messaging.
Final update: the best offers we eventually received on this property were $1100 + 3/16, or $800 + 1/4. Just a little FYI to let you all know what's happening. Thanks again for all the assistance.