I was just offered $550 per lease on 12-5S-3W, 22-6S-2W and 30-5S-2W..3 yr, 3/16ths. Is this a good deal? I don't really see any action so to speak on any of them (with my limited resources) so thought if anyone has info on these please let me know if this is a fair deal. Any info? thank you
Elizabeth,
If we move this post down to the forum, I think we could get more folks to answer your questions, but I will give you my ideas.
There is some acitivity around 30 5S 2W, in section 20. Some of these wells are vertical and are 160 spacing. which means you need to be real close to the well. A few i have seen are horizontal. I think it is early, but promising .
All things in these leases are negotiable. I think I would try to get 3 different leases with different terms. It is possible to take less cash and more interest, most get 3/16% , but some get 1/4% or just wait and see what the pooling order will offer. Be hard nose and don't let them rush you.
I would ask for a production clause that gives you GROSS PRODUCTION AT THE WELL HEAD and not NET PRODUCTION.
I would also try to get a DEPTH CLAUSE, this will give you a chance to lease to more than one operation for the different formations in your mineral rights. There seems to be a couple of formations they are drilling so don't sign a lease that gives it all to one operator.
If possible try to get the SHUT-IN clause deleted. This clause gives the operator a lease for ever and if no production is taking place they can hold the lease for a very small sum, like $1.00 per acre per year, for ever.
Once you sign the lease, it's a done deal. No going back and changing things.
Elizabeth,
That seems to be a pretty fair price. Better than pooling orders the last couple of years. There are several pooling applications in that might give us a better idea. They should have orders issued in the next few weeks.
Lease language and clauses will determine if it is a good lease or not. Make sure each is listed on a separate lease. There is a statutory Pugh clause, but it would still be better to spilt them.
thanks Daniel and Rick. They are three separate leases but they want a, 3 yr shut-in which I said no 2 if even that but they won’t budge on that??? I have depth clauses but i wanted from the deepest producing formation and their terminology is to the "base of the deepest formation. . What is the best.? Rick u had mentioned the cumulative vs. consecutive time on shut in and they wont change that either. . Did get the deduct, and top lease or Extension taken off. … but I’m with you guys. . If they are going to still soon or the area isnt hot enough yet it won’t hurt to just tell them I’d like to wait longer or get 1/4 royalty on all. I just don’t want to lose out on the leases but like you all tell me its better than a bad lease. So still pondering…thanks for the help. And Daniel if you can move it to the general post that would be fine with me.
Elizabeth,
I can't 'move it' to the general posting area, I just start posting the response there.
I don't know, but I wonder what could be done with the clauses that are not acceptable, when force pooling is ordered. Could the clauses be negotiated at that time?d My guess is that the landman is RD Williams, in Ardmore, as they seem to do the most leases for XTO.
My suggestion is that 3/1 is too little...you can still get cash bonuses at 1/5 royalty. Maybe a little less.
How many acres are you speaking of? It would also be good to keep poking around and get a good contract rider that you can attach dealing with things like a Pugh clause etc..
This company is Lowry and they usually lease for continental. I agree with a Pugh clause. There is a built in pugh clause but it’s not specific enough. If I don’t lease how soon will they pool or force pool since there really isn’t any action right now? Or should I try to negotiate more into the leases and price them appropriately?..they were doing a three for $$$ deal which probably doesn’t reflect the current or best bonus for each…another quandry! What is a good Pugh clause to use?
Elizabeth,
I have not used this site's info in the past, but it might be a good place to start.
http://www.landmen.net/clausesforms/clausesforms.htm
I read the Ardmore paper on-line every morning and the last couple of days I've noticed Continental Resources notices. Today they where asking for new drilling and spacing units in section 9 3S 3W.
The Ardmorite website is http://ardmoredailyardmoreite.ok.newsmemory.com/