So I am new to this process of leases and offers. My grandfather left me 22 acres in McClain county. I have an offer for $500 per acre for 3 years. 2 year 3/16th royalty share.
I have no idea what others have been offered. What they are getting. If this is a good offer or not. I'm literally totally blind here. Trying to educate myself. May I ask for some people here to guide me in the right direct?
Thank You
Welcome to the Oil Business!
First of all, tell the Section-Township-Range, so we can help with respect to the activity.
Do not take a two year option. Do not take the first lease they give you as it is not in your favor. Don't let them rush you. You have plenty of time to learn about how to do this correctly.
If you want to friend me, I will walk you through it. To get a heads up on what is happening, read the last six months of the McClain, Grady, Garvin and Stephens forum to get most of your questions answered. There are some excellent links that are posted. I keep a running excel spreadsheet with keywords as to what each one is about. Too many for a FAVORITES list. Also read the MINERAL HELP and the BLOGS listed above. Then go read the latest investor presentations for Newfield, Continental Resources, and Marathon to get you started. Look at the maps.
M. Barnes gave you good advice. Don't take any of the options to re-lease after the initial offer in the companies favor. I think that amount might be really low but the section-township and range would make the difference. If you are in the SCOOP/STACK play I'd ask for more money and at lease a 1/5th interest. Oil is coming back up but of course we don't know exactly when it will rebound to what it was only last year but it will be back and you don't want to take a low ball offer. There are some really smart people on this forum (and others) of which I am not one. You will do well to take their advice.
Thank you.
I don't want to disclose all the sections, I'm a little cautious yet, but I will provide two of them.
Section 14-9N-4W: N/2 SW/4
Maybe that can help me get an idea of what's going on with respect to these
Section 14-9N-4W: N/2 SW/4
So, how do I find info on similar areas? I'm very thankful for all your help
There is quite a bit of leasing in that area mostly by TS Dudley who is a land company working for "someone else" . The most recent pooling was in section 7 for $900 3/16ths or $750 1/5th in March with Charter Oak.
I am attaching a map of McClain county so you can mark your acreage on it and get a feel for the area.
You do not have to lease. Your other option is to wait for force pooling which gives you most of what you want anyway without the hassle of the negotiation.
1044-McClainCountyMap.pdf (344 KB)Thank you. Unfortunately the pdf doesn't open.
Being green here, I also don't know what force pooling means. Having said that, I also don't know why that would give me most of what I want, or even what it is that I want...lol... yeah really green.
Ron...when a company gets ready to drill a well they try to lease up the mineral rights before they start. When you say "forced" pooling it makes people think you are being made to do something you don't want to do but it's actually usually a good thing for the mineral owners. First of all it means they are probably ready to drill on your mineral rights and It's the companies way of rounding up the stragglers (we say) who they either can't find or have chosen not to lease yet. The company has to give those that are forced pooled a choice of what they will lease for (money wise) and the interest they wish to receive. These amounts are set in a hearing and are usually more money than the companies have offered earlier to those same owners. The only thing about holding out for forced pooling is that if the company decides not to drill on your section then you have lost what you have been offered earlier as bonus money. When and if you are forced pooled, though, you will need to get your choice sent back in to them before the deadline or they can give you the least interest offered which is usually 1/8th which is not good now days. It never hurts to ask for more money and interest than they offered you to start with. But after you are forced pooled those amounts have been set and you can't ask for more than the court has set for them. Best Wishes and I hope I have not confused you.
p.s. Ron, are you from Lindsay and was your dad called "Pappy" Cole? (I'm thinking his last name was Coles though so probably not).
Thanks Linda.
