I'm very new to this, got a speculative call a few weeks back to buy some mineral rights at $500 an acre.
The area is 11.42 acres in NE/4 Section 16-16N-10W and another 15.23 acres in S/2 Section 28-17N-10W.
I realized that an initial cold-call bid is not the best offer so I started looking around and found this site. I found a lawyer and started talking about getting the title straight and in my name (instead of deceased grandfather). She found other parties willing to offer ~$3300 an acre.
Now here's where I'm confused. I don't need the money now. If I can spend $10k on getting titles searched and transferred for a chance a big money (200k+) later, then I'll spend the $10k now and see where it goes. But I'm having people tell me that non-participating = low money and people are interested in my mineral interests to get toe-holds in areas to get some leverage on a bigger deal.
Unfortunately, I don't have an unbiased knowledgeable opinion on this. Everyone that gives me information has potential skin in the game.
Can someone give me an idea on whether or not the non-participating makes the above deal super attractive? Or do I wait, what's the potential payout at a later date? I realize its all speculation but I'm hoping for some informed speculation.
THANKS!
I don't know a whole lot (I'm just a royalty owner. I've never worked in the industry.) However, from reading the responses to questions like this on this forum I'd say that offer is way low. M. Barnes should be replying to your question soon. He is quite knowledgeable.
What you need to determine first is whether you have mineral rights or just royalty rights. The mineral rights give you the minerals and the present and future royalty, royalty only means someone sold the mineral rights and retained the royalty on a particular well. Not as good as having all the mineral rights.
$500/ac is exceedingly low. Considering that the section next door in 15-16N-10W just pooled for $1260/ac and 3/16ths or $1200 and 1/5th, is way low! Leasing your section 16 would get you close to $14K at those rates. Continental is leasing in 16. Nothing on the Corporation docket for 16 yet, but you are surrounded by multi-unit wells coming.
Felix Energy has 28-17N-10W on their docket right now. The hearing date was supposed to be Oct 5, 2015. If it was done then, you have only a few days to answer the pooling options. Immediately, Call or write Charles L Helm co Felix Energy, LLC 1530 16th Street, Suite 500 Denver, CO 80202 and tell him that you an heir to "name" and you understand you have mineral rights and want to answer the pooling. 405-232-9000 For example, S 20-17N-10W was recently pooled for $2100 3/16th or $700 and 1/5, so ballpark range there.
Continental Resources, Felix Energy, Marathon Oil, Newfield, and others are quite active in those townships with leasing and planning wells. Someone is trying to get a toehold by that low offer. The most important thing you can do now is get your pooling option picked (only have 20 total days) and your title clear.
Read over the last six months of this forum on Blaine (and Kingfisher and Canadian) to get a feel for what is going on. This is not a one well decision, it may be for many more in the future.
Friend me if you need help. Sounds like you have some very important things to do quickly.
I have read through, the real issue I am having is that they are mineral rights but non-participating. Which, by my limited understanding, means I cannot lease the land. Someone else owns the leasing rights. I’d be entitled to royalty at some point but have been told the money is in the leasing.
So that’s the crux, am I holding on hoping to make a few thousand because I can’t lease or is there a potential windfall here?
Thanks again, truly appreciative.
The money is in the royalty, not the leasing. The bonus they receive from leasing is often piddly compared to the money received in royalty, especially in this area. It might be smart for you to track down who has the executive rights (they can do the leasing). You want them to get 1/5th or 1/4th and not 1/8th if they don't pay attention.
I saw your friend request. Chat there.
16-16-10 is already leased and under production for a multi unit well CLR Toms 1-21XH. It is leased at 3/16. The Toms well is producing out the Woodford with a depth clause, so the Hutton is available for lease. The Toms has been producing for a couple of years. It was the first 2 mile well in Oklahoma. If you are the owner of the royalty rights you should be receiving payments already. If you are not receiving payments..... you need to find out where those payments are going, and if you are entitled to those payments. Our family has the leasing rights to the NE 1/4 (160 acres) and has 100 acres of mineral interest. Hope this helps.
500 an acre is practically theft in this area of the stack play. Please let us all know who made this offer so we can all identify the crooks from the good. Also if you could share the attorney as well. They don't seem to be up to speed either in current pricing in the area. I own some in section 15 next door and my highest offer was 10K an acre.
If you speak to the group that made the low ball offer on 16 and if they failed to mention the Toms well, ask them if they have heard of the Widner vs Enerlex, Inc or Croslin vs Enerlex, Inc.
If whomever has the ability to sign a lease on your minerals signed for a royalty of 3/16ths or higher then the dramatic drop in price is irrelevant, and they like you said are trying to take advantage of you.
Who did you inherit these interest from? I might be able to find some more info for you with that. The Toms well has made a lot of oil and gas and at higher commodity prices as well. Your money should either be in suspense or escheated over to the states unclaimed property fund.
Carl Beiland.
This forum has been extremely helpful and awesome. Thanks.
The initial $500 was from a representative of Judd LLC. I don't want to put the lawyer on here but can DM you the info if you friend me.
We purchased the land and mineral interested from Ted Beiland back in the late 80's. We also purchased the right to lease all of the NE 1/4 and 100 acres mineral interest We leased your minerals to CLR and Devon. The well was completed back in Feb od 2013. Production was very good at first, but has declined. You should be entitled to a good amount in payments from the past production, and a couple of hundred a month at todays prices. Initial production was approximately 1400 bbls a day oil and 2 million gas a day if I remember correctly. Sec 21 receives 46 percent of production and 16 receives 54 percent. The payments due you could be significant.
Let me know if I can help you with anymore information.
Apparently there was a huge Beiland presence back then. My grandfather moved to Philly around the Great Depression when it hit them pretty hard. Mom said he would get checks for quarters for a lot of years then it just disappeared. Starting to dig hard into it. Ted was probably a cousin I never heard of. With the distance between OK & Philly there was never any real connection beyond some emails with someone via Ancestry.com