I and my siblings eceived a letter today from Jackfork Land on behalf of Lime Rock Resources who are proposing to drill the Kent MU16 28 21 3HX located in a section of land that used to belong to my grandparents (S28-T7N-R2W). I have leased this in the past (so they felt I owned those rights) and then a few years after it expired someone else was interested in leasing but said after their due diligence that I don’t own it?!?! So I have a few questions on how to move forward since I have just received this new letter:
They have offered either $225/ acre with 1/8th royalty or $175 with 3/16th royalty. These rates are so low! I know the rates are down but is this really in the ballpark of the going rate? If not, what’s a good rate to counter for the 3/16th?
They included a copy of the AFE which I am required to sign if I am interested. I did not get one the last time I leased so I’m not clear about why this time would be different and why it would require my signature?
Should I bring up the difference of opinion on my ownership or just sign indicating my interest and let them do their thing and see what their fresh opinion is?
A few things to follow up on. You need to track your title given the questions about it recently. Do you have the probate documents from your grandparents to your parents or to you? Did the second group deny your siblings or just you? The documents should be filed in the county courthouse. You could try www.okcountyrecords.com as a place to start. Free to look, but a few dollars to print. Another thing to do is contact the leasing agent and ask him/her if they have done the drilling title opinion and if so, can you get a copy of the paragraph that pertains to you. They may or may not have done it yet. Lots of times, they send out agents before they do the title opinion.
Yes, offers are way down from those a few years ago. I always ask what they are offering for 1/5th as that is my minimum. This area is on the east side of a major fault and the prices are lower on this side.
You are not required to sign the AFE for the well. That is only for working interest owners and I doubt you want to invest that kind of money and risk. You do not even have to answer the letter. It is a courtesy letter. You may get more offers or you can wait for pooling.
You do not have to tell them anything, but you and your siblings probably need to find out your title situation.
There are no current OCC cases on that section, so there is some time before anything will happen.
It is not unusual for companies to take leases from heirs even when the heir’s interest has not bee established through probate or otherwise. So you may be facing a probate or other curative process ot get hte minerals in your name.