There is a hearing notice to pool this area for new gas well production from the Morrow formation. An option for a bonus of $50 per acre and 3/16 ths royalty is available. I would appreciate any feedback on this offer. I believe it to be too low. My royalty has been 1/4.
If it has made it to the pooling stage, then you are stuck with the options offered by the judge. You only have 20 days from the date of the order in which to answer (by certified letter return receipt). If you can find someone to lease with that can get it filed in the 20 days, then that is an option as well. However, it looks like Woodward Iodine Corporation is the only game in town. Schonwald was leasing back in 2018.
Sounds like forced pooling, For most people choosing the highest royalty is the best option. If this isn’t a forced pooling, it is a guessing game to determine whether this is the highest rate. If you have significant number of acres, you may be able to be able to contract for a “most favored lessee” provision meaning that your bonus must be increased to the highest bonus paid in the spacing unit.
I also like my clients to file their election with the OCC.
Thank you for your helpful information. It turns out that the hearing for the pooling order has been postponed until March. I did speak with Iodine and are primarily drilling for water and what small % of gas there is in that area of the Morrow formation.