Devon has Pooling Cause CD 201308127 underway for 1-17N-2W, and I have a very small unleased mineral interest in this section. Devon has already pooled Section 2 and many sections in adjacent and nearby townships. I have received a leasing offer from Kyle Lubbers, representing Eagle Oil and Gas:
$0 bonus with 1/4 royalty 3 yr term
$450 with 1/5th
$550 with 3/16
I also note, a Native Oil and Gas, leased from Carol Rein Rother in Section 1. Anyone heard about Native Oil and Gas? They have a P.O. Box in OKC (no phone #), and their "Co-Manager" is Matt Whitaker, who on LinkedIn is a Manager with Midtown Energy (OKC), and formerly with Devon.
I have committed with Kyle Lubbers ([email protected]), who seems very reasonable. I've worked with one of his colleagues in the past. Just working through the special lease terms. But it would be good to know if there are other lessees for Sec. 1, if negotiations with Eagle go south.
Donald, Are you getting a "must drill" clause in your lease with Eagle? My Payne minerals are unleased, unpooled, so a company made me a similar offer, but the company president admitted that they would not be able to get operator and drill, because Devon had the majority lease hold in my section with 2 yr options to renew.
I agree with the company president. You would have recourse with your lessee. However, if your lessee assigned the lease to Devon, then Devon would be bound by its terms, and failure to due so would constitute a breach of contract, which would lead to an interesting lawsuit. What are the damages for the well that was never drilled? A battle of experts, and a lot of dough.
In my situation, where Devon is pooling multiple sections in the area, and actively drilling horizontal wells, I fully expect a well to be drilled on my section without a "must drill" clause. I'll keep that in mind in the future where my acreage is more critical to the whole prospect.
Donald, I've dealt with lease assignments in SE OK, but I was wondering if your company was allowing a "must drill" clause in your lease, because when the options run out Devon will not have control of my section and the another company could drill. I have never had to design a lease clause around these circumstances and thought you might have. Devon is drilling all around me too, but the other company is offering much better lease bonus, royalty and terms.
This is the first time I've heard of "must drill", and don't have such a clause. I am confident that Devon will be the operator for many years beyond the primary term, regardless of who I lease with, so I will go with the best lease I can get.
You should go with the much better lease bonus, royalty and terms. That will define how you will be paid regardless of who drills and operates.
If you register at the following site for a nomial cost, you can look who is leasing to whom on all of the leases in that section and the sections around;
Harley thanks for reminding me that service. I've used it a number of times in the past and it is extremely handy. Especially if one is an absentee mineral owner.
Those are two other companies that I see have taken a lease in there. Really there are a lot of people who would be interested in your lease. I did a search for poolings in the township over the last year. Slawson has pooled 3 sections (19, 20, and 30). All those are several miles away from 1 but all three pooled at $725 an acre with 3/16.
Devon has pooled 9 section in the 3 southern tiers of 18N-2W in the last year. Those prices range from $325 to $475 an acre for 3/16.
Hi Don, that was a better offer than what Devon was sending out earlier. The offer I saw was $325 @1/8 or $300 at 3/16. Must drill clause is moot as devon has already drilled a two mile lateral through the section and 36-18n-2w. Let me know if things go South I know some people who would pick it up at similar terms.