Something must be up in section 21 and/or that general area. I've received two lease offers in the past couple of weeks for the same location listed in my subject line. First one was from LWB Oil Co. from Edmond, second request from Hacienda Resources, OKC. Both offer $150 bonus for 3/16 royalty. They both want extensions, one 2-yr and one 3-yr., which I will ask to be removed. I'm more interested in royalties than bonuses, so I believe I'll ask for a 1/4 royalty, no extension, no bonus, and see if one of them will agree to that. Any input would be appreciated.
I'm in section 6-13N-9E and received $150 an acre, 3/16, and 3 year extension from Hacienda Resources this week. I'm thinking along the same line with you, 1/4, no bonus, no extension.
One of my relatives signed with Hacienda Resources and they couldn't have been happier. One of their landmen came to my aunt's house and offered to match or beat any offer she already had. They sat down with me and my aunt, who is elderly and hard of hearing, and explained the whole leasing process and how wells get drilled from start to finish. He explained Hacienda is a small independent operator and will strive to develop any leasehold they acquire. I'm in the O&G industry myself, and know LWB & JNAH are strictly lease flippers looking to sell any leasehold they acquire to the highest bidder. I would suggest not signing with them. My aunt did sign for $150 & 3/16 and that was the highest bonus amount for a 3/16th lease I had heard of.
Thanks for the info, James! I will go with Hacienda, then.
James Vanderslice said:
One of my relatives signed with Hacienda Resources and they couldn't have been happier. One of their landmen came to my aunt's house and offered to match or beat any offer she already had. They sat down with me and my aunt, who is elderly and hard of hearing, and explained the whole leasing process and how wells get drilled from start to finish. He explained Hacienda is a small independent operator and will strive to develop any leasehold they acquire. I'm in the O&G industry myself, and know LWB & JNAH are strictly lease flippers looking to sell any leasehold they acquire to the highest bidder. I would suggest not signing with them. My aunt did sign for $150 & 3/16 and that was the highest bonus amount for a 3/16th lease I had heard of.
James,
The Hacienda landman said they were a "small independent operator"? I believe they told you that but Im a little leary about a company that has never drilled wells anywhere, in any basin trying to "wildcat" here in Ok. Did they mention any formations, or plans of conventional or unconventional drilling? Some times the guys "flipping" the leases or participating with them on a non-op basis know a better home/operator for your leasehold than the guys "striving to develop" an area, while drilling there first wells in a formation yet to be determined or announced by anyone that Im aware of.
The entity was formed on 4-2-14 by an Incorp services company and started taking leases a week after only here in Okfuskee. I would wait for some drilling results from the operators out here before I leased with anyone. Plus, you get to see the poolings and the bonus amounts given, and get to compare with well results of the operator in the area to see if more cash or more royalty is a better thing. Sometimes if the operator drills terrible wells you will get more bang for your buck making up for it with a higher lease bonus.
Thanks Mineral Steve. Yes, I did a little background work on these guys and their main goal is to drill horizontal oil wells in the Woodford Shale. They are new to the game, but are legit according to my sources in OKC.
An interesting conversation. I was contacted today by a guy based in Edmond, a little unclear to me what company he's with. Offering bonus of $175 per net min. acre w 3/16 royalty, 3 year term. This seems awful low to me-- last deal I made was for $700 per acre in Grady Cty and I've negotiated as high as $1500 per acre (in various parts of Okla.) over last few years. But of course that was in boom times, not like now when price per bbl is so low. Is $150-$175 per acre typical in Okfuskee these days? I know nothing about production in Okfuskee- are there wells producing significantly in the county?
Mineral Steve said:
James,
The Hacienda landman said they were a "small independent operator"? I believe they told you that but Im a little leary about a company that has never drilled wells anywhere, in any basin trying to "wildcat" here in Ok. Did they mention any formations, or plans of conventional or unconventional drilling? Some times the guys "flipping" the leases or participating with them on a non-op basis know a better home/operator for your leasehold than the guys "striving to develop" an area, while drilling there first wells in a formation yet to be determined or announced by anyone that Im aware of.
The entity was formed on 4-2-14 by an Incorp services company and started taking leases a week after only here in Okfuskee. I would wait for some drilling results from the operators out here before I leased with anyone. Plus, you get to see the poolings and the bonus amounts given, and get to compare with well results of the operator in the area to see if more cash or more royalty is a better thing. Sometimes if the operator drills terrible wells you will get more bang for your buck making up for it with a higher lease bonus.