I was interested in purchasing some property in SE Tulsa county which has a pump jack and two tanks on the property. As part of my research to find out if the property would be a good place to build a home for my family, I reached out to the Operator of the of the O&G lease and found out that he and his partner are older in age with medical conditions. They went on to tell me how easy it would be to get the pump jacks running, that one of the wells produces about 1/2 barrel per day, and that they would let me take over the lease and use their operator license for $50/mo until I can get mine. Its an 81.4% lease structure and they said when i make some money i can return the favor and give them back a little.
It all seems too good to be true, but maybe they really are looking to pour a little fortune on someone from a younger generation.
Can someone tell me what the catch is here? Am i being played? Whats the risks associated with agreeing to take over (3) O&G leases in Tulsa/Okmulgee County?
COUNTY TULSA SECTION 9 TOWNSHIP 16N RANGE 14E
COUNTY OKMULGEE SECTION 27 TOWNSHIP 16N RANGE 14E
You are looking at assuming liability for plugging costs and any environmental or other damages, among other things, not to mention the costs of well repairs. If this were profitable, they would sell the well. Run away!
@Forum_Administrator thank you for sharing the article. That puts a lot more into perspective. This forum has been a wonderful resource in understanding the inner workings O&G exploration
There are alot of opportunities like this. They are not all bad, but every deal comes with some amount of risk. Getting an independent evaluation done by someone else locally in the production business would be a wise thing to do. Plugging liabilities can be very expense or relatively inexpensive. All depends on the situation.
