Haskell Horn Family Limited Partnership was called by Meadows Oil & Gas concerning leasing in Caddo County, Sec. 10-9N-12W.
They offered a bonus of $250 per acre for a 1/5 royalty and a four-year term.
They originally wanted a 2-year extension and I said we do not do 2-year extensions. He then countered with a 4-year term.
There was originally a gas well here but it is not producing now. I asked if he was drilling to a different formation. He did not give a good answer.
I don’t have a good feeling about his offer.
This company seems to be buying up leases in Caddo County. He wanted to know about all the minerals we own in Caddo County.
Is this a good offer for this portion of Caddo, County?
I am a member of NARO.
Karen Hunn, President of Haskell Horn Family Partnership
There has been a leasing round in Caddo over the last two years. The main players are Citizen Energy, Classic Resources, Continental Resources and Dutton Resources. Of the seven active permits in Caddo right now, Territory Resources has three, with four other companies with one each. The closest permits to you are horizontals in 9N-11W and are by Peachtree (for the Marchand) and Staghorn (for the Marchand). Your old well was in the Skinner. The Marchand is shallower. Can’t comment on the bonus amount as they are private, but the 1/5th is encouraging. Kaiser Francis has several pending cases nearby for the Marchand.
I also received a lease offer from Meadows Oil and Gas for Township 9 North, Range 12 in Caddo county for the same amount. I spoke with their land man and I too wasn’t sure about this offer. They offered a bonus of $350. /acre for 3/16 or $250./ acre for 1/5. Since I’m new at this and was Leary of this small oil company buying up leases that I figured they would then sell for a profit to larger companies much more likely to drill, I turned down the offer with the caveat that I would be willing to renegotiate a more equitable offer. I figured that the company that was actually interested in drilling would be willing to offer a better deal. Did I make a mistake or are there other companies making offers in this area and county? Thank you for any assistance you can give me about this matter.
Operators frequently contract out their leasing to an agent company. Many operators do not have their own land department anymore. When I get a lease offer, I ask who they are working for, when to they expect a pooling order, what horizons do they expect to drill for, what percentage of the acreage is leased, what is the best offer that they are allowed to offer and anything else I can think of. If they can’t answer, then that is a clue.
Closer to the time of drilling, you may get an offer letter that has a series of options to lease or to participate. Watch who it comes from-an earlier agent or a new one. I do not sign those letters as I will not put my name on anything that might commit me to a decision until I see the actual lease. The amounts offered at that time are usually close to what the pooling offers will be. if you choose to lease, suggest that you get a good oil and gas attorney to review the lease as they are rarely in the mineral owner’s favor and need significant edits. If you cannot get a good lease, the pooling has its own advantages.
If you are new, the following document may help you.
0_Royalty-Owners-Booklet-112020.pdf (6.8 MB)