The goal of a mineral buyer is to buy the minerals and receive royalty payments, just as an individual mineral owner would.
Shutting a well in typically does not mean the lease falls off making the lands open unless the operator fails to make shut-in payments.
2a) Many of the leases that are holding the shallow production in this part of Oklahoma do not have depth clauses in them (depending on age), meaning as long as the shallow wells are producing, the lands are held by that lease.
2b) If an operator took an assignment (bought those old leases) at 1/8th royalty, it would not make sense for the operator to plug the existing wells and re-lease everybody at a higher royalty rate.
Echo Energy is not a spin-off from Chesapeake. Some members of their management team used to work at Chesapeake, but Echo has no affiliation with and was never spun out from a CHK entity.
Judging from the behavior of Citation so far, I would not expect them to develop the area. At one point early in the play, they were looking for a JV partner but it apparently did not materialize. They have filed horizontal regulatory applications over the past couple of years and let them expire while actively pursuing applications on their vertical production. They also have not been aggressively leasing.
Better said and clarified on the personnel from Echo. Thank you.
If an operator buys the leases, they would not plug the wells and lease again at a higher rate, you are correct. They would like the lower royalty to leaseholders and more revenue for them. I misspoke in my first sentence. The remaining mineral owners who didn’t sell, would like if those wells were plugged, not shut in, so we could lease at a higher rate.
If a non-op bought them, they would like to flip for a higher price and perhaps keep an override and or negotiate for a working interest.
Is there anywhere in Oklahoma to go like online to find out exactly what mineral rights I own. I have old paperwork from when my great grandmother was alive that shows but it’s chicken scratch to me… and I know I own minerals in Lincoln and carter county both
You can start your detective work with a website called www.okcountyrecords.com. It is free to look, but have to pay a small fee to print. It only goes back to the early 1990s for some counties for the digital records. The rest are held in paper form at the county courthouses. You can search on her name. If there was a probate, those documents would help you. You may have to hire a landman to help you. They are the pros at finding information.
If you have records from your ggma, then it may have descriptions of the acreage on them. It might have a section, township and range with additional descriptions of something like NW4 or SE4, and maybe a fraction like 1/8th undivided interest, etc. Those are actually telling you what she had. Was there a probate? You actually have more than most folks. What do they say at the top? Leases, deeds, division orders and letters all can be valuable clues.
Really good stuff here thanks to local knowledge by a few especially M Barnes…I have countered the offer I received with a number I can live with to sell one-half my minerals and I keep the rights to the shallow production and the half they buy will be subject to an old 1950’s 1/8 royalty lease. the shallow production is still making money as part of the ShoVelTum field and should continue for a number of years. I realize if the deal if consummated will be reducing the risks but also increasing certain risks regarding participating fully in some deep success. Echo seems to have a number of cases pending after preliminary hearing before the Oil and Gas Commission with a number of intervenors (protesters) but i can’t find the resolution to those cases? It is, however, great to have some choices and decisions to make.
Could you please reference the book/page of said Assignment from Echo to CLR?
Per Carter Co records Echo and Casillas have made conveyances to each other but none appear from Echo to CLR.
Moreover CLR hasn’t been a assignee of an AOGL since 2017 in Carter Co.
I call Ardmore home and represent a large diverse book of mineral & WI owners. We’ve been placing OGLs in the “countyline” area (1S-3W, 1S-4W, 2S-2W 2S-3W) of Carter/Stephens Co for the better part of a year now - I cannot name names, however I will share we’ve closed on terms from $2,250/nma to $3,500/nma. We’ve closed almost exclusively on a 1/5th royalty, but recently closed a deal at 11/50th (22%). Moreover, a majority of these lessees have been “professional mineral brokers” and not the operator/applicant or a broker representing said operator/applicant. Typically, the smaller “chasers” can offer you better terms and can be more flexible with OGL form/language as they wont be attesting to the terms of their deals to the OCC.
I will also say finding open acreage here is difficult. Historical cycles of drilling and leasing have left a patchwork quilt of HBP and open lands in the NW part of Carter Co. As James_H said try and put this work off on the landmen. If they want the lease bad enough they’ll figure out your status and proportion of ownership. BE VERY WEARY of Letters of Intent or Letter Agreements. These will only serve to keep your interest contractually “on the hook”.
Moreover, (and most important IMO) demand your OGL be filed of record in it’s entirety. Many (Echo is a fine example) are filing memorandums of Oil and Gas Leases vs the original. This only serves to conceal the full terms of the lease and only befits the lessee. It’s difficult (damn near impossible) to enforce the terms of a contract that isn’t filed of record.
I am usually skeptical from a mineral owner’s point of view. Any offer to buy usually means that the buyer knows a whole lot more than the seller and they have a pretty good idea that they will make money on the deal or they wouldn’t do it. As a mineral owner, I would rather have that money in my pocket. Each family has to make their own decisions based upon needs/wants, timing, emergency situation or long term point of view. I usually hang onto everything. Others have different viewpoints.
Holly: Mineral rights can be bought, sold, leased, mortgaged, etc, at most anytime. It is a buyer beware business, so you shouldn’t be skeptical. You should however, make the best efforts in finding out what you own, both in volume and value.
Totally agree with Martha. Our family has long had a no-sell rule. Some of the seemingly most worthless properties could one day be productive. Never know
I have minerals in S7, T1S, R3W…they were leased by my Dad in the early 1950’s and have been held by production since then. The pay is in the Deese and Goodwin and maybe Springer. Recently Echo has been interested in the deeper undeveloped minerals. A year ago they made a Filing for a Sycamore and Woodford test and several parties intervened in protest among them Citation who operates the shallow Franklin Unit production and holds the leases. do you know of any Echo or Continental acctivity to create a 640 acre unit in Section 7 ongoing or any Echo effort to force Citation to drill the deep or drop the deep if they won’t drill? Do I have to take Citation to state District Court to force them to drill or drop? does the oil and gas commission ever order drill or drop? I lived in Ardmore in the earl 50’s it seems like the Cretaceous but I guess it wan’t that far back. Thankls…Martha ahs been a great deal of help but I thought I would ask some very specific questions …hope that is ok. Thank you
I have acreage in these sections as well -leased by my grandfather and held in the same fashion. It is usually just best to let the operators hash it out in court as they have the money to do so. Echo has not historically been a drilling company, but they will probably get a drillco to work with them or cut a deal with one of the operators. Citation is very experienced. Casillas, 89Energy and Roan are also in the area. Quite a bit of leasing and OCC cases on many sections here. Each company has their own strategy. They will present their cases to the OCC and decisions will get made. The case docket is very backed up, so it may take a while. (214 cases in the last 999 days just in this township) Echo has the spacing case at the moment. 201805895. I see some orders are starting to get posted in the surrounding sections. (Sec 6 on the 27th), so things are moving, but slowly.
Echo will not be getting a Drillco as they assigned the bulk of their acreage to Continental. While Echo’s name is still technically listed on all of the regulatory, those cases will go to Continental. The only thing Echo will be doing in this area going forward is buying minerals.
Thanks. I had heard the same thing from another source. I have certainly had lots of offers to buy, so well be hanging on! Yesterday’s call was from The Mineral Resource Company but was really Continental. Maybe we will get some movement on the drilling in the near future.
I am Oklahoma City-based, ex-Echo, and run a boutique minerals brokerage where I actually help people in the process instead of shaking them down.
As FYI since you are a mineral owner:
You are correct that MRC is CLR, but I do not believe you’ll receive a better offer than from MRC. MRC also has JV has backing from Franco-Nevada (NYSE:FNV). The prices I have heard in the rumor-mill in town indicate MRC is paying right around PV-0 for a Sycamore well or possibly a little more depending on downspacing assumptions.
As far as operators on your acreage go, I would want Echo (Now CLR) or Casillas to be filing my applications. Roan, while they have a good ops team on paper, is having financial difficulties at the moment and with the expense of these wells, I don’t expect them to make much progress. Citation has had opportunity after opportunity to drill wells in this area, going so far as to file Horizontal regulatory applications, but they never followed through and let them expire. They also did not aggressively lease the area the way that Echo and Citizen (Now Roan) did, so they arent working with much. Casillas at least bought the Chevron package and has engaged in what appear to be acreage trades with Echo, which indicates they want to make a play.
