We own 12.5 net mineral acres in this section. They were leased years ago and have been producing what we call 'trickle"amounts. Oklahoma Oil and Gas Commission shows six oil and /or gas wells. I’ve been considering selling the rights to reduce tax paperwork and simplify inheritance issues…further division with heirs seemed pointless. Until now. Can’t find any good info on what might inspire Castlerock Resources, Inc to offer $25K but am inclined to let them take risk going forward. Any information on pending activity in this section and/or experience with Castlerock would be greatly appreciated.
We are in a different section in Caddo and also received an offer from Castlerock back in August. Similar situation as yours, very low current well production. But someone on the forum was kind enough to point out there was a recent “increased density” filing which may have generated the interest. One family member spoke to Castlerock and got the impression they were buying for “investors” but didn’t ask who or why. They signed the paperwork and sent it in. But some of us decided not to sell at this time and Castlerock returned the paperwork.
I’d be interested in an update if you follow up with them and are willing to share your experience.
Thanks for the reply. We had a different offer last spring for another property in Section 12. I cannot locate the correspondence but we didn’t accept. Offer was for approximately 2700 an acre. This time we are tempted because we have a clearer idea of well history in 12-9-11. Chesapeake drilled a gas well in 2006 or so and payout was bee quite low, dwindling to nearly nothing now. Same with other wells/companies. I’m assuming that, in your recent experience, there was insufficient interest from enough mineral owners in your section and Castlerock elected to cancel their offer entirely. They may go the same route with us. Still undecided.
There are active OCC cases in 9N-11W for sections 3, 7 and 17. All of those are for horizontal wells. If they drill horizontally then the performance is likely to be vastly different from you saw on the older vertical wells. As increased density cases are filed, there can be a flurry of offers to the nearby acreage in hopes of snapping up acreage at cheap prices.
In your experience, how long between increased density filing and approval for next steps? Section 29 had a filing in August, but I have not seen anything on OCC website since.
It can range widely due to who the operator is, what time of year, what capital constraints they have, how backed up the commission is on hearings, etc. I would hesitate to give an answer that had an exact time frame in it. I would say that a fully funded company with money left in their budget and rig under contract would move more quickly than a player with limits on capital spending and no rig ready to drill. We are heading into the end of the year, so things usually tend to slow down as budgets get tight.
Thank you again Ms. Barnes. You were most helpful on a lease we negotiated in 12-10-10 in 2017 and I was hoping you’d notice my post. I haven’t figured out how to check for filings on the OCC site. So far I’ve only been able to examine existing well data. Or perhaps I’m just not looking in the right place.
In the case of my current question I’m still wondering if the well Chesapeake completed in 2006 (12-9-11) was horizontal. If so it didn’t produce long or well. I don’t know if that’s a good indicator for this play or not.
12-10N-10W- I don’t see any well.
12-9N-11W-Crain 1-12? Was completed in 2008 (looks like a recompilation from an earlier well) Cherokee horizon. Vertical well
The OCC OAP site is under reconstruction. That is where look up new cases. Not working well on the searching side at the moment. I use a service in stead. Nothing new in 12. Lots of new activity in section 18.
Have interests in Caddo and Grady Counties. Received a latter (looks like mass mailing) from Antelope O&G for purchase conversation.
A portion of these interests (Caddo 14-9N-9W are under a lease from Core Resources).
The majority of the interest however appears to be in Grady County (this a a “package” that purchased from Midland College Foundation 15 years ago). This covers NE/4 of Sec. 29-T8N-R8W and historically had a ton of production 9Mil+BBLS, almost 4Mil MCF.
How and who should I get honest advice from on this package? Ms. Barnes? Thank You. mj
Thank you Ms. Barnes. Sounds like accepting Castlerock’s offer might be short sighted however tempted we may be. Their offer exceeds by a large margin our total income from said property for the past 15 years.
I do have another question. As I was researching this offer we received a mailing from a law office in Oklahoma with copies of drilling, spacing and pooling filings for Peachridge Energy in 34-10N-11W. We do not have minerals in that section but do have 20 acres in the adjoining 26-10N-11W. The pooling is for 640 acres in 34. As we are not in that section I’m assuming we got a copy because of potential impact to the common source listed in the filings (upper and lower Marchand). So, no likelihood of a future division order, just background.
Perhaps this will generate another offer to buy rights?
How old is that offer letter? Mineral buying has drastically decreased the past few months due to recent well results and operator earnings/or lack of earnings, so a lot of buyers have paused their funds or reduced prices by a large %. If the letter is more than 30 days old I’d contact Castlerock and verify the current offer still stands. I’d also make sure the offer is per/nma or for all of your acreage.
Caddo County is on their own internal land records system, so I cannot see if Castlerock has sold/flipped any of their recent acquisitions.
And whether or not you should sale comes down to your financial situation and risk at the time. Regardless of your decision you cannot look back and go I should have/should have not because the market is so dynamic that it’s hard to predict what will happen next. Just make the best decision for you at the moment. For instance, my family sold a portion of their interest when they needed to buy a family members piece of the farm following a death. Other times they held on to the minerals for legacy reasons. There is no right answer. You could be offered 25K tomorrow, or 100K next month, or 0 dollars next month; it’s all a risk and full of unknowns so do what’s best for you!
Peachtree and Unit are both looking at section 34. The Peachtree well is planned for sections 3 and 34. Unit has the same idea. Take a look at the respondents on the mailing and see if you recognize anyone. Sometimes, they send a courtesy copy to the contiguous sections and sometimes, you realize you have acreage you didn’t know about. With two section development coming, you may get increased interest in your acreage nearby.
Thanks again Ms. Barnes. I’ve reviewed all deeds kept by my parents…nothing in section 34, but as you said, it’s still possible (but unlikely) that my father missed something. We’ll keep an eye on future filings.
One question concerning the sale offer of our rights in 12-9N-11W. Castlerocks offer includes a 30-day draft to be cashed pending receipt (via a bank) of our mineral deed transfer. In an earlier post on another issue re: leases you said you “never do 30-day leases.” I’m curious why you advise against this form of negotiation.
Thanks so much for your continued support and excellent advice.
Thanks Mr. Tucker for your very sincere reply. We’ve also noticed a drop off in offers of late on other holdings in Caddo County. Our offer from Castlerock was dated 29 Oct 19 and I intend to contact them soonest, pending a bit more research. I noticed in a previous post by Ms. Barnes that she’s not in favor of 30 day drafts (which accompanies the current offer) and have asked for more information on her experience with these kinds of payment. Any input on your part would be most welcome.
Never ever hand over an original of a lease or a deed without getting paid. Too many companies will file the lease or the deed immediately without paying while they go hunt for someone to sell it to in order to get the money to pay you. Sometimes, folks never get paid.
What many of us do after we have come to acceptable terms is this. If it is a lease, I will sign the original and make a scan of it. On the copy, I will write COPY DO NOT FILE in giant black marker on every page and especially over the signature line. I will send the original (after making my own clear copy to save) to my accountant to hold. I will send a scan of marked up copy to the lessee with my accountant’s address. The lessee will send a check to the accountant and after the check clears, the accountant will overnight the lease to the lessee. The lessee needs a few weeks to run the title, so I certainly understand that. However, I shorten the time frame (30 days is really six weeks) to a four week or less time frame and notify them that if the funds do not arrive, the lease will be destroyed and negotiations will have to begin again.
Similar style for a sale, but I would have a slightly different set of conditions.
Do not sign a deed/lease until you have check in hand. You can sign a Purchase Sales Agreement to start the due diligence process (usually 30-45 days) but do not sign over the rights to your minerals until you have the check or the funds have been wired.
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Thanks to Mr. Tucker and Ms Barnes. Castlerock (the buyer) has asked that I deposit the signed and notarized original Mineral Deed and the draft in my bank as a collection item. My bank will forward the paperwork to Prosperity Bank for payment. The buyer has 30 days from receipt at Prosperity of my paperwork to complete their title work. I contacted the collection office at Prosperity this morning. They assured me that they will hold the original deed pending completion of title work by the buyer and provision of full funding as shown on the draft. Only then do they provide the buyer with our signed deed. At that time the bank will issue a cashiers check to my bank. Unless the buyers bank is not acting in good faith there seems to be no risk here beyond the unlikely event that the title company finds a problem. In that event they will return all paperwork to me.
We have not committed yet to the sale because I have been researching the above process. I am taking your warnings to heart and proceeding with due caution but I am constrained by the relative inexperience of our local banks (in Northwest Washington) with this process. It’s an education for all of us.
Castlerock Resources is owned by Robert Gonce, Jr. and has been around for a while. Their site is no longer working so not for sure about that, but Robert’s brother is a well known Plastic Surgeon in OKC and they both office in The Gonce Center in OKC. Due to how long he has been around and being related to prominent members of the OKC community I think Castlerock will be honest. But it never hurts to be cautious and glad to see that you are working with banks to facilitate the transaction.
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Convey640, thank you for the info regarding Castlerock. We also received an offer from them. One of my family members spoke to Robert and mailed in a signed Quit Claim, but the rest of us decided not to sell. Robert returned the document since we did not have family consensus on the sale. I felt that was an indication of his integrity. But I was concerned that he was trying to rush my family member through the process. Perhaps time was of the essence for whatever deal he was working on.
First time poster here, so please pardon if this is a repeat question / topic. I own a veeeeery small factional interest in Caddo 8 9N 11W and have received what seems a low royalty lease offer (12.5%) for an atypically long 5 years. Would appreciate any feedback about other offers in the area so I can tell how this compares.