I’ve been offered from $6500-$7500 per acre to buy my 5 mineral acres in Sec. 35-6N-4W. Is there anything happening there?
That offer is low in my opinion. The range in values is probably the range for various royalty percentages. If you have 1/8th, then it is lower than 1/4th. You already have one well in the section and room for more. You should have just gotten a division order for the new well. If not, then contact Newfield. They are out now.
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Section 35 7N 5W what would be a fair price per nma?
Hello to all.
We have been eavesdropping for a couple of months now. We used to follow frequently but lost our connection when the site changed. But with Jay Pfaffman’s guidance we’re glad to say that we are back. We have learned a lot from this site over the years but mostly how naïve we are.
We received notice of applications by Continental Resources for increased density in our section and another for a Multiunit Horizontal Well in sections 26 and 35 both 7N 5W. OCC cause numbers 201 810296 and 201 810285 respectively.
We knew something was up because we were getting calls from one potential buyer and then received an offer by mail from Kilberry for $8250 NMA. The fine print indicated a minimum of 0.125 (1/8) royalties which we have under the pooling order.
The past unsolicited offers we received were definitely low.
Our standard position, with activity increasing everywhere, is that holding on is better than selling low. Especially, when we don’t understand what these pooling orders and applications are about. [How long are we obligated under the pooling order and what effect will the additional wells have on our royalties? Way too many questions. Wish Martha would write a primer]
When we inherited the rights, no one was interested in buying or leasing. The prior lease ended in 1986, if we remember correctly. Then came fracking!! We didn’t know we had to probate in OK for rights that had no value so we did nothing and ended up in a pooling order. Ownership has been cleared up for a while so we can sell if we choose.
Sheila Anne & Leon
You are held by the pooling order as long as oil or gas is producing in the reservoir quoted in the order. In this case, it may be decades. The increased density is good news for you as you will get another well or wells royalties added to your family. When an increased density case is filed, there are a flurry of offers to buy, usually at fairly low amounts just to see if someone will bite and isn’t paying attention to their mail.
Short primer on pooling… The operator determines what percentage of standard leasing needs to be accomplished before they apply for pooling. (You actually can pool with one acre, but that is not cost efficient.) At pooling, the company tells the judge why they need to pool, what the reservoirs are that they will be drilling and the range of bonus royalty pairs that they have offered within the last year in the contiguous nine section which is the drilling section in the center and eight touching sections (640 ac spacing). The judge will make a ruling of the “highest” (a few caveats there) bonus/royalty pairs that will be offered in the order. Folks who have not leased will have 20 calendar days after the date of the pooling to answer with their selections or they will receive the lowest royalty/highest bonus pair. (Send by certified mail return receipt and keep that receipt!) (usually 1/8th, but not always). The operator is given a time frame in which to spud the well. Usually 180 days to 365 days, or they have to go back to the court to pool again for an extension or they lose the pool. Usually the bonus is paid within 35 days, but I have had to chase some of them down from operators with certified letters. Once production is established, the leases and the pooling owners are held by production until it ceases. New wells can be drilled to keep the production alive.
The OCC has a very nice booklet for royalty owners.
http://www.occ.state.ok.us/OG/RoyaltyOwnersBooklet0218.pdf
Martha,
Thanks for your response.
We’re printing the booklet to study.
We’ll keep following Grady County to learn more.
Sheila Anne & Leon
Thanks Martha. Do you know what the interest rate is on royalty not paid within 6 months. First production on our well was in May 0f 2018.
The interest rate on overdue royalties is 12% for clear title and 6% if needs curative action. It is statutory.
If they have determined one’s Ownership because of being an Heir , would that necessarily fall under Curative?
If one is an heir and probate has not been filed, then probably curative and they would only pay the 6% after the title is cleared. If probate has been filed and all title is clear, then probably at the 12% rate.
The reason this is important is that a Division Order is a contract for payment. The operator wants to make sure that the right owners are being paid the correct percentage.
OK got it. All is good to go for me because Grandmother’s will was probated and all supporting documentation was provided to them by a Lawyer. Thanks for clearer under standing.
Martha: It is no longer 6%, effective November 1, 2018.
“Where such proceeds are not paid because the title thereto is not marketable, such proceeds shall earn interest at the rate of (i) six percent (6%) per annum to be compounded annually for time periods prior to November 1, 2018, and (ii) the prime interest rate as reported in the Wall Street Journal for time periods on or after November 1, 2018,…”[March 22, 2018 ‐ 4.75%.]
Todd M. Baker
Thanks for the update. Is that in the Statute 52? I know they were talking about it. When was it voted on?
Martha: The “new” bill- Statute 52, was signed off on in November. Legislature, visa vi, oil companies, tried to get the 12% taken away but thankfully failed.
Todd M. Baker
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Thanks Martha,. Been having trouble with Gulfport and Camino. They both say funds are in suspension and are slow in giving a response as to why. First production was in May 05/18 We received div. Orders from both companies. Gulfport sold to Camino and they were to take over in Sept. I hear it is no oil and poor gas. I suppose our 18 acres aren’t worth much. I do feel that they are being way to slow in there response to our inquires both by phone and Email.
I have had to ask several times for back monies. I usually send a certified letter, email to royalty owners website and phone call all on the same day (and documents in my calendar). Then if no answer, send again in two weeks, this time with additional certified mail to the OCC for filing. That may help. They have hundreds of folks that they are trying to clear title on, so it does take a while.
Martha, I have never heard of sending certified mail to OCC for filing when requesting back monies. What would this entail?
I have heard of folks doing that because it gets filed for record. Might move someone to move a bit faster. (Or just clog up the system.) I see folks filing on poolings so that the date they mailed their answer is posted.
lol…I see. Thanks Martha