I have rights in 18-16N-6W and 19-16N-6W and have been offered $1000/acre bonus plus 15% for lease and $4750/acre to sell. I no longer live in Kingfisher so any advice on activity and if either is a good offer would be much appreciated.
Newfield just filed a WHOLE bunch of regulatory requests with the OCC on June 9 for horizontal wells and pooling. Don't sell! Are you sure about the 15%? That doesn't sound right. Should be 3/16 or 1/5 or even 1/4.
You can do nothing and wait for the pooling order to come in a couple of months and pick the bonus/royalty pair you want (I recommend at least 3/16, but I would go for 1/5). (Payrock pooled in sec 12 for $800 and 3/16 in April 2015 to give you a ball park number). The bonus is not the important number, the royalty over the long term is.
Or you can go to work over the next two months and get yourself a better lease deal. Do not take the first offer they give or the first lease. Neither are in your best interest.
Comeback if you need more help.
Thanks so much. I know Newfield's pooling hearing is this week. Sounds like you're saying I should let that happen and wait for the best offer. Is that right?
Also, I'm confused by 3/16, 1/5, 1/4. Newfield's current offer reads as $1K per net acre delivering an 87.5% net revenue interest. Does that correspond to one of these figures?
If I were you, I would wait for the pooling. The $1000 and 87.5% corresponds to the 1/8th. 12.5% to you, 87.5% to them. Do NOT take that offer. It is horrible. You want 3/16ths (18.75 to you, 81.25 to them) or even better, the 1/5th if they offer it at pooling.
You will only have 20 days to respond to the pooling. Select the best bonus/royalty pair, write them a letter telling which one you select, send to the proper folks lists in the pooling order. Send everything by certified mail and keep copies of everything. Good idea to send a signed W-9 with your letter so they pay you the bonus faster.
You have received very sound advice from Barnes. I would echo his suggestions. I do not live in Oklahoma but since I was raised in Kingfisher county and my parents and grandparents owned their properties and mineral rights, we as a family watch very closely the activities in OK. There is also NARO (National Royalty Owners) Headquartered in Tulsa that is also a good source of info. http://naro-us.org/. NARO has a document called "How to Survive Force Pooling in Oklahoma" which I suggest you obtain. It explains the whole process. I think there is too much future value to sell your interests (unless you need the cash now -but that is a different subject). In any event the offer to buy is too low.
There are pros and cons however I have found pooling to be a good option. I have recently gone through 3 pooling orders and by waiting I was able to settle at a much more attractive level. Patience is your friend.
Thank you so much for all of your advice. I am so glad I found this forum!
Here is another document to download.
1136-00RoyaltyOwnersGuidetotheOCC10413.pdf (1.41 MB)