I was contacted recently about leasing mineral rights on 30-13N-11W in Blaine County. These rights were inherited by my family several years ago. We have never dealt with this type transaction and need guidance on how to proceed in investigating the value of the mineral rights and how to determine if an offer is appropriate.
Peggy, the best way to start is to read over the last year of discussions on the Blaine forum. That will catch you up to date in general terms and get a drift for good prices for your leases. Then go to the Q2-Q4 investor presentations for Continental Resources, Newfield, Marathon Oil, Cimarex and Devon and see what they are doing in the area. They have some excellent slide shows. I save them as .pdf and refer to them often. Then read the Mineral Help above with the do's and dont's of leasing. Then pop over to the blogs tab and read those. Finally, friend a few of the old timers on the discussion forum and ask advice. I often look over leases for folks and show them the "Gotchas" that they need to watch out for and suggest ways to negotiate. Welcome to the oil business! Come back, we are here to help each other.
Dear Miss Peggy,
You can also search the Internet to find the "Oklahoma Royalty Owners Handbook" published free by the Oklahoma Corporation Commission. This booklet is about 38 pages and has some good information for beginners. The value of the minerals is not something that is easily determined. It depends upon what someone will pay for the right to buy or lease them. These values change all the time depending upon many things -- oil company plans, success or failure of nearby wells, oil and gas prices, etc.
I'm familiar with this area, and something doesn't sound right. Devon basically drilled out almost every section in this township about 5 years ago, yours included. They drilled the Marcus 1-30H well there in the Woodford formation. It is still producing. No new leases have been signed in this section since that time. With that in mind, I'm not sure under what conditions you would even be considered leasable. Even a depth clause would not explain this. Neither would force pooling, as the pooling order for this section includes the Mississippi, Woodford, and Hunton; unless they totally omitted you guys from the pooling order.
So the real question here is to ask whoever contacted you WHY they think you are leasable. Are you getting checks on the Marcus 1-30H from Devon now? Are you sure this is section 30-13N-11W?
Sounds like it was an offer to buy her mineral rights, not lease.
Peggy:
I have attached a spacing application from the Corporation Commission. Do you see your relative listed? If so, who? I will check title to see if they are leased or not.
Todd M. Baker
568-Sec.3013N11WBlaineCo..pdf (342 KB)Thank you contributors for sharing your wisdom, it has been very helpful!
As best we can piece together this is the time line regarding these mineral rights. They passed to my Father in 1982 and he would have been sole owner until he died in 2014. He is listed as the owner on the Blaine County Clerk's site where there is a recorded agreement with Cheasapeake Exploration Limited in effect for a period of three years beginning in 2003. One family member thinks there may have been a request from Devron to pool resource at some subsequent time but my Father did not respond to that inquiry. Other than the original payment from Cheasapeake, to our knowledge there were no additional funds paid to him by either Cheasapeake or Devron. He is not listed on the document provided by Mr. Baker but the associates of our grandfather who was the original owner are. I am looking for additional paper work but as of yet have found nothing on file in his papers or with any public entity. I had an attorney who handles leases in Oklahoma and Texas look at the original offer. His advice was to get a clear understanding of the current situation before going any further. Any ideas on what would be next step?
Peggy, contact Devon & tell them the information you have. Your family has revenue in suspense from their well.