I have inherited property in Ellis county-----Section 13 and 24-19N-24W. The lease proposal also contained documentation showing notice before the Corporation Commission of Ok to establish and vacate those spacing units. I am very new to this game, but using the OCC website shows me a well on section 24 (Floyd 1)? that was plugged in December 2015. The notice says Mewbourne Oil is applying for horizontal drilling across both 13 and 24. So am I obligated to deal with Mewbourne? or can I negotiate between the other two companies who have offered a much higher purchase offer with royalty lease. And who is the top bidder in this area now?
You can deal with anyone that you wish. You want the best lease clauses with the highest royalty. The bonus does not really matter to me as the clauses are the most important factors. No post production charges, etc. If this is your first time leasing, it would be really wise to get a good oil and gas attorney to help you negotiate the lease. The drafts given by land agents are in the operator’s favor, not the mineral owner’s.
Welcome to the forum… You may find the Mineral Help tab above useful and also the blogs. Read posts for Ellis County and the general Oil and Gas Leasing help to get started. The National Association of Royalty Owners is a group that advocates for mineral owners, has webinars, classes, town halls, conventions, etc.
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Thank you M_Barnes, that helps! With further digging I found 3 Paid UP Oil and Gas Lease forms for ELlis county Se/4 24 19N 24W . One was from Mewbourne Oil who originally sent me an offer, and the other 2 were from NWR Mineral Partners, leased from separate entities who I am not related to (that I know of). They all received a 3 year lease royalty of 1/4. Is there any way of finding out what the bonus payment was? The offers I have received vary widely, from $700 per net mineral acre to over $4000. What??? I think I need to follow your advice and engage with an oil and lease attorney?
Any of the old lease forms bonus amounts are no longer relevant. Today’s competition is what drives the current bonus amounts. The 1/4th royalty is what most of us want as that is the best royalty. Today’s bonus amounts tend to be lower due to market factors. Yes, you still need to get an attorney to look at the lease drafts. You do not want post production charges at all and there are about 10-15 others clauses that need to be checked. A recent lease I looked at had ten items in the main lease and ten in the exhibit A that had to be changed.
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Thank you Miss barnes. I contacted a rather large oil and gas Leasing attorney who declined my business as they are no longer taking on new clients. I have looked at your recommendations page and find only those who practice in Texas. I see you leased last year in Ellis county with good results, so would you share the name of the attny you used? I have no clue as to how to find a reputable one here in Oklahoma City?
Look up the Oklahoma Bar Association and scroll through to find OIL & GAS specialists. You may have to call several firms as there may be conflicts of interests with certain operators. Keep calling until you find one that you are comfortable with. You are looking to draw up what many call a “family lease”.
Thank you for the advice! I truly enjoy reading everyone’s comments and have learned so much from the sharing of wisdom in this group.
Be blessed!
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