We have mineral rights in Harper County, Oklahoma (Section 33 & 34 T26N R26W). We were approached 2 years ago to lease the rights and the negotiations just kind of died out. We just received a certified letter from the same landman company representing the same Operator asking $100 per net acre, 3/16th and a 3 year term (The original offer). They have named the well Don #1-34. The letter is asking us to indicate our election as to either leasing under the above terms or participating (Which we have no interest in). They more or less indicate one or the other and end the letter with the fact that they will be filing a pooling application with the OCC in the near future.
Can someone help with needed info and perhaps where to go from here? Since inheriting our mineral rights this will be our first opportunity to sign a lease. Several other properties are held under previous signed leases already.
- Is there someone that can tell me about the activity / Bonus Amounts, etc going on in this area?
- Ending the letter with a Pooling Application threat – Can someone file for a pooling order with a minimum of Royalty Owners leased? Or do they need a certain amount signed first?
- Do pooling orders ever include the “must have” clauses: Deductions, Commencement, etc?
If anyone can get me going in the right direction, I would be most appreciative.
Any help is most appreciated.
Thanks
Don't worry about the pooling , also there is no hurry . I'll see what I can find.
Could not find any leases for more then that. If they have an interest they can file a pooling. The pooling is for 6 months in most cases, they sometimes ask for a year. the lease is for 3 years and I would give no options to extend if I leased. You could give them more then 3 years if they pay extra for it now. All of the must have clauses that I can think of you get if you are pooled.
Thank you so much for the input Ron. I read day after day how most of us aren't educated in this and it's frustrating to try to educate myself and it just opens up more questions. I can't tell you how much better I feel to have someone confirm what I had thought. I don't want to assume anything with my limited amount of education.
When we were trying to negotiate before they seemed apprehensive on including the clauses I wanted. It sounds like you are saying the important clauses would be included in the Pooling Order. I can get myself around the OCC website pretty well - is there a place I can see the "standard" Pooling order, if there is such a thing and get more familiar with what the OCC will include in their pooling order?
Would you say I am at a disadvantage or advantage for getting good terms, at this point?
Thanks Again!
Your fine they have filed nothing on any pooling yet. I will get you a copy of a pooling when I get back from town.
Hear is a link to an old pooling . How many acres do you have ?
http://imaging.occeweb.com/AP/Orders/OCC_OG_3GL0IC3_3RS6CQA.pdf
Thank you Ron.
Our records and even the offer from the same company last year shows a total net acres of 29+. This current offers only shows 9+, so they have left out 20 of our net acres in part of one of the sections they are looking to lease. I guess I will address that when I figure out what to do next. I really appreciate your input.
I am totally lost as to what is happening. Today, I got the following concerning this same Don #1-34 for the same sections listed above: Pooling Relief, Cause CD 201302711-T; Spacing Relief same cause, and a letter from a Bearcat Land stating that Strat Land Exploration Company is proposing to drill Don #1-34 to test the Cherokee formation. Although my acreage is only a small amount, 1.02 acres they request that I choose to lease the said interest to Strat Land for 100.00 per net acre for a 3/16th royalty and 3 year term. A second option is that I participate in the drilling which is estimate to be over 1 mil, or half mil for a dry hole. I am new to all this, my interest was inherited. Can someone tell me what all this means, and guide me?
Jim,
These are the same documents I received. There was a hearing last week for the Pooling and Spacing and I am awaiting the results from that. Just because Bearcat listed 2 options in the letter does not mean you have to choose one. They do word it to where you would thing that's what you have to do. That is what they are OFFERING. You never HAVE to accept an offer anyone makes. I have tried working with them to come to an agreement for leasing and was unsuccessful. We should be receiving something shortly to let us know what the Oklahoma Corporation Commission came up with for options on the Pooling. There should be 2 to 3 choices to choose from in the Pooling and often those orders have better terms than the offers. If we are unsuccessful negotiating something with Bearcat than the Pooling Orders will step in and we will have to decide out of the choices what we want to take. Once pooling is approved than we do have to make a decision. Hope this helps.
Jim keep coming back to the forum as you work through this. The letter from bearcat is nothing, the pooling is the only thing that you have to answer. I will see what I can find .
It looks like the Pooling was recommended on 5/14/13 so you should receive the pooling order any day . You will have 20 days to make an election from the date of the order. It looks like it is a 812 acre spacing which is a little different . This would cost $1,250 an acre to participate with part or all of your interest in the well, $625 for dry hole . In return you get 16/16th instead of 3/16th
Ron,
Can you see what the pooling order options are for leasing?
not until they issue the order
Thanks! I didn't know if it shows on record or if no one knows till they receive in the mail. Appreciate your response Ron.
Billy, I just spoke with Cory Shofner, and he tells me the pooling order will give us three options, one to take the 100 bonus with 3/16, one with no bonus and 1/4, and one to participate. Cost to participate is 1, 072,460 divided by 812, multiplied by your acreage, and this will give you your 3/16 royalty interest plus 13/16 working interest. For my small acreage in this 812 acre spacing, he said option 2 or 3 would be the best.
Have you received your pooling order yet? What happens if I don't receive mine within the 20 days after issue?
Jim Innis said:
Billy, I just spoke with Cory Shofner, and he tells me the pooling order will give us three options, one to take the 100 bonus with 3/16, one with no bonus and 1/4, and one to participate. Cost to participate is 1, 072,460 divided by 812, multiplied by your acreage, and this will give you your 3/16 royalty interest plus 13/16 working interest. For my small acreage in this 812 acre spacing, he said option 2 or 3 would be the best.
No Pooling order yet . Anybody want to participate ?