We have been presented with an oil and gas lease from Universal Land Services out of Tulsa. Anyone familiar with this company? We have mineral rights on sec. 19, 18N, 5E. Any other activity in this area?
The Universal Land Services I'm familiar with is and oil field contractors and service company, but yours sounds like a lease broker/landman service. Could be 2 different companies with the similar names or maybe the contractors/service company has decided to become a lease service also.
There are several Co.s leasing around you. Here is a pooling in 18n-5e you should be getting what they were ordered to pay or more. Item 6.2 & 6.3
Here are the only two completion reports I could find 18n-5e.
http://imaging.occeweb.com/OG/Well%20Records/1DD13366.pdf
http://imaging.occeweb.com/OG/Well%20Records/1DD218F6.pdf
They also have permits in23,26,& 6 and are filing paper work for other sections.
The Drilling company is American Energy Woodford.
AEP is Aubrey's McCledon's new company and he is former co-owner of Chesapeake.
How has that worked for Aubrey as far as the fairness and legality of the lease and payment? ARe they extra fees that are paid by the Lessor?
Martha McMorries said:
AEP is Aubrey's McCledon's new company and he is former co-owner of Chesapeake.
Extra fees? Do you mean post production costs? It's very important that a mineral owner (unless they completely understand all lease clauses) discuss the legality of the lease before they sign it with an attorney who is highly familiar with the OCC rules and regulations. Same for unpaid royalty payments. Informed lease negotiation is a must for mineral owners also as sometimes a third party lessee will give better bonus and lease terms the operating company, but you first have no know what your lease is worth in order to negotiate. AEP is a very new company and I have not heard of any AEP lawsuits concerning post production costs or unpaid royalties, but a mineral owner should check everything every company does these days. There's lots of things for a mineral owner to address, but it's worth it
Thanks for this. It does help to hear about things to be aware of and question. What other companies are getting contracts in Section 19 18N 5E? JUst want to compare what we are being offered.
Martha McMorries said:
Extra fees? Do you mean post production costs? It's very important that a mineral owner (unless they completely understand all lease clauses) discuss the legality of the lease before they sign it with an attorney who is highly familiar with the OCC rules and regulations. Same for unpaid royalty payments. Informed lease negotiation is a must for mineral owners also as sometimes a third party lessee will give better bonus and lease terms the operating company, but you first have no know what your lease is worth in order to negotiate. AEP is a very new company and I have not heard of any AEP lawsuits concerning post production costs or unpaid royalties, but a mineral owner should check everything every company does these days. There's lots of things for a mineral owner to address, but it's worth it
Tawana, I don't know what other companies are in your area, but a company usually will not give a mineral owner lease info. Gather as much OCC completion and production info as you can find in your township and range and read everything you can. Maybe other mineral forum folks know, but I have no idea which ones know what their minerals are worth and have received a fair value lease. However, Ron McKenzie posts well reports on many forum pages almost daily which may give you some idea. M Barnes, a geologist forum member, has helped folks. Remember that your section may get more than one well and might have 3 or more. You really need to know your section to be able to negotiate your lease or to decide to participate with all or part of your mineral interest. Good Luck
Tawana, my family has minerals in T19 5E, Sec's 17, 20. AE-W initially offered $200, but agree to $375 ac @3/16th 2-yr ext. That's a sweet offer, and those who do their homework know the going rate during 2013-14 was around $300 - depending upon your geographical area. BUT, even though the question was posed several times during negotiations, "Does your lease include the enhancement clause?" the broker never answered. AND, when that sample lease arrived it included mineral owners paid for many enhancements. The Cushing Atty, redlined all over that sample lease, and emphatically stated, "no extension lease - ever!" The mineral owners/attorney's counter is back in broker's hands to be reviewed by AE-W. We'll see what AE-W comes back with. Yesterday we got a $200/ac offer from CROWN. So far, they're stuck on that price, but, it's not even a serious consideration. They probably would turn around and sell it to AE-W and make money.
I cannot emphasize enough how important a good atty is worth paying for. Our atty said he's working with several clients trying to collect their mineral money from AE-W for past year for non-payment. We may lose this lease, but we may also be saved from years of misery and legal fees.
I truly appreciate the information I receive from this site. Thanks to your experience, and advice.
Tawana Lansa said:
Thanks for this. It does help to hear about things to be aware of and question. What other companies are getting contracts in Section 19 18N 5E? JUst want to compare what we are being offered.
Martha McMorries said:Extra fees? Do you mean post production costs? It's very important that a mineral owner (unless they completely understand all lease clauses) discuss the legality of the lease before they sign it with an attorney who is highly familiar with the OCC rules and regulations. Same for unpaid royalty payments. Informed lease negotiation is a must for mineral owners also as sometimes a third party lessee will give better bonus and lease terms the operating company, but you first have no know what your lease is worth in order to negotiate. AEP is a very new company and I have not heard of any AEP lawsuits concerning post production costs or unpaid royalties, but a mineral owner should check everything every company does these days. There's lots of things for a mineral owner to address, but it's worth it
Jodean, but if you leased to Crown, and redlined any objectionable terms, then whoever they flipped it to would be bound by those terms. They may come up in price close to AE, thinking they could make money by selling it to them. I am looking for a new O/G attorney since mine is now a judge & not practicing law. Are you happy with the one you have in Cushing, & have you used him for very much yet?
Tawana, My family has a OK mineral trust and I have been getting 1/4 royalty and a cash bonus for a 3 yr lease with no option to renew. The cash bonus varies according to the number of acres owned, target formations, thickness of formations, faults, current completion reports, etc in the lease area. We try to keep up to date on lease clauses, addendums, and OCC rules and regs. We lease to third party lessees when the operating company will not negotiate. FYI, I'm not a third party and have no association with such and don't have minerals in your area, but have negotiated leases in many OK counties. Just the facts.
Martha, the1/4 bonus with no extension sounds like a near-perfect lease I wish my family would agree to negotiate for. But, they're hooked on "get the money and run" deal, rather than chance negotiating.
I'm fairly new to the minerals leasing industry, and I'm not familiar with third party leasing. I've checked the web, but read conflicting reports. Can you direct me to a site that explains this? I'm not pleased with one offer, and I'd like to suggest 3rd party leasing as another option to my family.
Martha McMorries said:
Tawana, My family has a OK mineral trust and I have been getting 1/4 royalty and a cash bonus for a 3 yr lease with no option to renew. The cash bonus varies according to the number of acres owned, target formations, thickness of formations, faults, current completion reports, etc in the lease area. We try to keep up to date on lease clauses, addendums, and OCC rules and regs. We lease to third party lessees when the operating company will not negotiate. FYI, I'm not a third party and have no association with such and don't have minerals in your area, but have negotiated leases in many OK counties. Just the facts.
Jodean, I've never had a situation where it was a chance to negotiate. It's good to learn about your section and surrounding area prior to leasing. Then, it's a matter of assessing your minerals worth so that you have a reasonably good idea what you are willing to except as a lease offer then discussing your reasoning with the landman. I have never leased with an option to renew and often turn down lease offers if they won't allow a must drill clause. That way I'm not giving someone a lease that they can flip for profit. There is no site that I know of for third party lessees. Attorney Nikki Leach in Perry gave me the name of a company he leased to and I've leased to them. We are not supposed to list names, but you can friend me.
Tawana, Yes, enhancements and other expenses to be paid by owner are included in AE-W's lease; those expenses are deducted from each months royalty check. Fairness and equality? Reportedly, he's being sued in Oklahoma for nonpayment to royalty owners. Here is a Forbes article that will answer most of your questions. http://onforb.es/1fuj9nA
Use your own good judgment, and get a very good attorney. You can friend me.
Tawana Lansa said:
How has that worked for Aubrey as far as the fairness and legality of the lease and payment? ARe they extra fees that are paid by the Lessor?
Martha McMorries said:AEP is Aubrey's McCledon's new company and he is former co-owner of Chesapeake.
Jodean, Is McCledon's new company AEP being sued or is it Chesapeake? Chesapeake has been sued in every state they are in and has numerous ongoing lawsuits. Most oil and gas companies I know of have some unfair post production/enhancement lawsuits, but CHK seems to be the worst. Third party lessees often have to participate under force pooling elections, because companies will not sign JOA's with them outside the pooling. Seems like in this situation the mineral owner could still be burdened with post production costs and enhancements. Participation is always an option, but then you have to watch hundred's of costs. It's always been a crooked business, but I used to participate with some fine little OK companies when it was economical and simple to do so. What a deceitful mess of money, power and greed it has become.
New post production case law from NARO at bottom last pages of this link http://www.naro-us.org/Resources/Documents/2014%20OK-NARO%20COSMO.pdf
If the third party's lease does not allow these cost then it should come out of third party's W.I. I would think even if they participate under forced pooling .
Thanks Ron, I have to examine everything with a magnifying glass and stay day to day current on new OCC rules/regs and western district case laws. It's a real mess. Not everyone is as honest as you.
For anyone interested in unfair enhancements and post production costs. Warning: This will make your head spin.
Mittelstaedt v. Santa Fe Minerals, Inc.
954 P.2d 1203; a “landmark” Oklahoma royalty owner case Decided: January 20, 1998
"We conclude that this clause, when considered by itself, prohibits a lessee from deducting a proportionate share of transportation, compression, dehydration, and blending costs when such costs are associated with creating a marketable product. However, we conclude that the lessor must bear a proportionate share of such costs if the lessee can show (1) that the costs enhanced the value of an already marketable product, (2) that such costs are reasonable, and (3) that actual royalty revenues increased in proportion with the costs assessed against the nonworking interest. Thus, in some cases a royalty interest may be burdened with post-production costs, and in other cases it may not." See more at: http://caselaw.findlaw.com/ok-supreme-court/1428600.html#sthash.WyHBpbrU.dpuf
FROM NARO in 2013 - http://www.naro-us.org/page-697394/1241044
"OK is a "marketable product jurisdiction". See the case law, in Mittelstaedt V Santa Fe Minerals, Inc., 954 P 2d 1203 (Okla 1998). . If you are required to go to a force pooling hearing, why won't the ALJ at the OCC hearing follow the Mittelstaedt case, rather than requiring the Royalty Owner (RO) to be paid at the well head, resulting in the RO to pay his/her proportionate share to make the product marketable, contrary to the Mittelstaedt case."
"If you want to do your own "audit" you can call the Oklahoma Tax Commission and ask them for production and revenue information for your wells, and then compare the prices and gross production reported to the state with the prices and production reported on your check stubs. If there's a big difference, you may have a problem. Phone number is 405-521-4558. You’ll need to ask for an Affidavit, which you will have to sign and send it in order to get your information." See this paragraph and more below...
http://en.allexperts.com/q/Oil-Gas-3147/2008/1/Check-Deductions.htm