We just received this the most wordy Division Order I've ever seen. Is this the new normal?? Does anyone ever respond to ones like this by asking for a NADOA form instead? Wordy DO.pdf
I am supposed to get one by the end of September. I hope it looks more like this: http://www.naro-us.org/Resources/Resources/Model%20Form%20Division%20Order.pdf
Christine, when I was sent a DO that tried to change the terms, I took someone's advice and sent the NADOA form filled out properly, and the company accepted it.
Christine: I ditto Nancy Mosley's comment. I send my own and it is the NADOA form!
I have inherited some OK gas leases, but know little about the "ins and outs" of the industry. Would someone possibly be kind enough to answer some basic questions?
1. Why do companies sometimes lease mineral rights and then just sit on the land and apparently never drill on it?
2. What determines the general bonus the leasee is offering? I've had offers varying from 75 to 300 dollars per net mineral acre.
3. Is there any effective way for small royalty owners to negotiate the bonus offers upward?
4. Are there times when one gets a lease offer and one should just sit and wait to see if a better one comes along on the same land?
5. Do lease offers mean that the leassor knows something I don't know, like a well is about to be drilled, and wants to get the lease from me before I hear about it?
6. When I get an offer, is there any way I can check to see if something like a new well is about to occur?
I would be very appreciative if anyone would take the time to help me with these questions.
Hugh Williamson
1) Many times is just speculation. If the lease early and cheap enough, it can be to their advantage.
2) The area will be the biggest thing. I have seen offers from $25 per acre to $1800 per acre. Just like surface rights, Real Estate top three items that impacts price A) location, B) Location, C) LOCATION!
3) Yes! But the Bonus is not always the most important part of the lease. The lease language or clauses may have more long term value than the bonus.
4) Yes, I think so. I’m holding on about 8-9 sections now for better terms. I know I can usually get better terms on getting force pooled than leasing. In this climate, I’m willing to take the risk of interest dropping and they never get leased or pooled/drilled. I don’t lease and unless I think it might make up for any downsides of the transaction. It is a poker game. It has risks both ways.
5) Sure they know things you don’t know. (and they likely are not going to show their cards) They may be leasing for the operator. They may be leasing knowing interest in the area is on the climb, with the intention to flip it to the operator. I promise you that they have intention on making money and have info one way or the other and are not blindly “giving” away money.
All of the above is just general. What I do and what you should do could be entirely different. We may or may not be in different financial situations, We may tolerate risk differently. Our short and long term goals may be different. I probably have a larger knowledge of this business and depending on the area, more knowledge of what is happening in the area. I’m also willing to do research and spend money on databases, consulting, and services to keep my eye on the areas more than the average person. You have to take all of that in account. For many people, it is too much trouble and they take the first lease offer that comes along. If we had a working crystal ball we’d take the highest offer that came along on the ones that expire without drilling, regardless of how bad the terms are. And likely we’d wait to be force pooled on the ones that were drilled. We’d even participate in the ones that were exceptional good producers! I’m still looking for that crystal ball, but in the meantime, I study the industry and available information to make the best decisions I can for my families long term goals.
Thank you very, very much for your time and trouble to comment, Mr. Howell. Hugh Williamson
Have some mineral royalty in OK, plus well drilled to 22,500 ft in 1982, and would like to find someone interested in opening it up. Anyone interested?
Why would an operator offer to buy mineral rights? They already have the lease.
Daniel, they know something you don't. Probably plan additional development. If it is an old lease they want to pick up your 1/8, 3/16, or ? at bargain price. Check the permits and completions within a few sections around you for clues, or it may be new formations that new seismic shows potential for new techniques.
Purchasers usually have the expense of distributing checks to royalty owners & if there are tons of cks to disburse, they may refuse to purchase. It can be a real burden after several
generations of fracturalization.
A very new mineral rights owner, I have 13.5 acres in Garfield County, Oklahoma. Devon has filed a permit to drill. Has anyone ever made a sizeable amount on such small acres? Just sounding things out. Any help will be greatly appreciated.
Deborah, the answer is YES.
Anyone know of a landman named Jim Biel who is looking for leases in Grady County? Got a note from him yesterday, hand-written, no section, township, or range. Works for Turner O&G, he says. Thanks!
Pat,
You might want to go over to the Grady County forum or the Stephens
count forum. The Stephens forum is the most active and I think the most knowledgable.
Thanks, Daniel!
Comment by ed carson 5 minutes agoDelete Comment
Hello All, i own numerous acres of mineral rights in different sections in Carter County,Pottowatomie County,Kiowa County,Seminole County and Eddy County,New Mexico. I believe surface acreage also. But not sure of exact acreage (Mineral or Surface). i inherited this from my father (Edward L. Carson) who got it from his mother (Opal D. Rexroat Carson), who got it from her father(U.T. Rexroat). I'm curious if I have any relatives in Oklahoma or wherever who may have a more exacting accounting of what I may own. i receive royaties on the producing leases. Im currently considering selling it but not if i dont know what i own. if anybody can help please let me know. [email protected]
What does it mean when Devon files for a location exception?
There is an exsisting well already on 27,21N,3W, and I noticed today on Corporation Commission's website Devon had filed for a location exception.