Newbie oil gas lease questions

Oklahoma Mineral Rights Garfield County, OK
1

I own rights on 1/4 of a 160 Acre parcel in Garfield county. Section 34-24N-3W. Just received a lowball offer of 1/8 + $50/acre.

Questions:

  1. Should I get a lawyer? If so, anyone have suggestions on a good one?
  2. Anyone aware of action in the surrounding areas?
  3. Is a counter offer of 3/16th plus $150 per acre a reasonable price? Any suggestions would be welcome.
2

Welcome to the forum.

This is not a high activity area at this time. There is a pooling in section 15-24N-3W that is pending for a hearing in September. That would give a feel for the market bonus in the area. Legacy Energy is leasing in that section at 3/16ths, so 1/8th is too low for me.

1.-Yes, if you have never leased before, it is wise to have a good oil and gas attorney look at any draft lease and make recommendations for improvements. The first draft is usually in the favor of the operating company and not the mineral owner. You can go to the OK Bar Association and look for attorneys that specialize in oil and gas. You may have to do some hunting as many have conflicts of interest due to their work for the oil and gas companies, but there are some out there that can review leases.

2.- Section 15 is the only section with active leasing at the moment and also has cases at the OCC.

  1. If they are only offering $50 at 1/8th, you can ask, but $150 at 3/16ths is probably not going to fly.
1 Like
3

Appreciate the reply. It seems there are a few attorneys available. Now to get all 5 people involved in this into the same boat.

4

It sounds like you may have inherited the property with other relatives. In certain situations having family members act as a unit can improve negotiation leverage. But if the acreage is small it may not matter. Also keep in mind that if the minerals are owned by the individuals, some can sign, some can sign with other operators or refuse to sign. In any situation they can do so without interfering with each others rights to lease (or not lease).

This post is not legal, investment or tax advice, it is for discussion purposes only. Reading or responding to this post does not create an attorney-client relationship.

5

Thanks Richard. I wonder how they assign the 40 acre parcels. Which ones go to whom? I don’t recall any mention of that in the deed. There are indeed 5 relatives. My brother and I get 80 acres total.

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Usually the wording is an “undivided” xx portion of the description, so it is not a particular 40 acres, but more of a percentage of the entire gross acreage described. You probably have part of a quarter of a section. It should say which quarter.

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