I am new to the group and have many questions! First, I have received a request to lease from Tucker Oil Properties for my interest in 79.73 acres of Section 31, Township 11N, Range 5W. They are offering a lease for 3 years (primary term) and 2 year extension at 3/16th royalty. They are offering $400.00 per mineral acre for the 5 years. I have no experience in oil and gas and have no idea how to know if this is fair or not and how to find exactly where this land is. It is inherited land from grand-parents and I know very little about it. How do I find it on a map? How do I know if they drill whether it will mess up the land for whomever owns the property? How do I make sure they clean up after they are finished? How do I keep up with what is being produced and whether they are paying appropriately? I feel so out of my league with all this but feel responsible for trying to understand as much as I can. I live in Texas so I feel that some of the laws here (I have done just a little research) are probably different. I don't want to sign the lease until I know it is the best I can get. Thank you for any help you can give.
Welcome! Glad you found the forum. I think you will find it helpful. You asked some good questions.
First of all, "breathe". Don't let the land man rush you. These things can take months. I will try to go through each of your questions, but it may take more than one message.
-First offers are usually low, so go ahead and tell him that you are not interested in the two year extension should he wish to make a higher offer, he can send it to you. The leasing is just starting in this area, so you do not want to be the first ones in. Superior Title Services is also leasing, so you could contact them as well. I do everything in writing, so I have a very clear paper trail. Phone conversations can be rushed and confusing. Memories are not always the same between the two parties.
- I am attaching a map so you can find it.
-You need to gather all the documents you can find regarding the acreage. Deed, probate, anything like that and start a file. You will need it down the line.
-It is good that you are concerned about the surface owner. There are some common clauses in the lease that will protect them, but he/she will also have a surface lease, so it is up to him/her to handle that.
-there are several free websites to help you keep up with the production. You won't need them for a while, but the main one is the Oklahoma tax website. We can come back to that at another time.
-you actually do not have to sign a lease. You can be force pooled which is sometimes much in your favor. That is a few months down the road, so you have time to learn about it.
-the "standard" lease form you will get from a landman is not in your favor, but can be fixed. Don't sign it without getting some help from the forum.
-yes, the rules are quite different in Texas, so don't even worry about learning both. (I live there, too.)
-the best thing you can do right now is to read the last six months or so in the Canadian forum. Also go read the Stephens, Garvin, Grady and Cana Woodford forums for the last year or so. It will take a while. Filter through our friendly chit-chat and pay attention to the links, clauses, etc that you will find. You might want to start an excel file and capture all the links so you can go back to them. The Grady has a Newbies hints section. Also, at the top of this page is a Mineral Help section with tips on do's and don'ts for leases. You will be amazed at what you will learn.
-go online and find that last few investor presentations for Cimarex, Newfield, Continental Resources, Devon, Apache and Marathon. That will give you some really good maps and a high level overview about what is going on.
Feel free to friend the folks that comment often and seem to have knowledge. They can help you at a deeper level.
Martha
1620-CanadianCountyMap.pdf (441 KB)Here is a link to a map viewer that will help locate your interest. http://www.canadiancounty.org/index.aspx?NID=931
Others here are more expert than I and will probably join in, but you will want to decline the two year extension. An offer represents only a fraction of what they are willing to pay. Perhaps a half to a third. Look for a competing offer.
My best suggestion is do as much research as possible. Get an idea of the terms that you are willing to accept and mot accept. Once you think you have it all figured out seek out a good oil and gas attorney to review the lease. I did this and my consultation was $500 but saved me THOUSANDS of dollar just because I did not realize what some small word properly place meant. Negotiate EVERYTHING…also dont be afraid to shop around…chesapeak was only willing to give me $600 and I found another that offered $800…I asked chesapeak to match and they could not match it. My suggestion would to look up a member by the name of buddy cotton and read just about every post he has written…a lot of really good advice.