Leasing or Pooling Guidance Request

Oklahoma Mineral Rights Coal County, OK
1

Hi,

I am looking for some guidance. I received a low lease offer for Coal County about a year ago. There was discussion previously hat talked about waiting for pooling instead of leasing, which is what I did.

Is there guidance or suggestions on leasing or waiting until pooling? Obviously leasing you know what you are getting up front monetarily and you can negotiate the lease. If pooled, do you get to negotiate terms or only the options they provide you?

Your help is appreciated.

Thanks,

Bryan

2

There can be advantages and disadvantages to both. With a lease, you can negotiate up to a point-you may or may not get what you want from the party offering to lease. Important clauses to fix are depth clause, shut in clause, warranty clause, NO deductions clause-very tricky wording can come into play, commencement of drilling, etc. You also get various options for bonus/royalty pairs.

With force pooling (if it happens which is also a risk), some things are set for you-short time frame (180-365 days) or they have to pay you again or drop the "lease", formations are set, so a depth clause of sorts, my understanding is no deductions at all. Get the best bonus/royalty offered in the surrounding 8 contiguous sections over the past year (not counting multi-units).

In an unknown area, I try to lease. In a proven area where drilling is imminent, I usually wait for the FP.

3

Thanks! This helps me understand what is/is not in a FP and what can be expected.

4

M Barnes, for the Warranty Clause, are you suggesting to disclaim the warranty of title and that the money received will not be returned along with Lessee being responsible for reviewing title?

Thanks,

Bryan

5

Lessor hereby warrants and agrees to defend the title to the lands herein described, and agrees that the lessee shall have the right at any time to redeem for lessor by payment, any mortgages, taxes or other liens on the above described lands, in the event of default of payment by lessor, and be subrogated to the rights of the holder thereof.

If it looks something like this, strike the part about warranting the title. Some also have a long sentence about you having to pay attorney fees. Strike it as well.

6

Thanks!