Hello everyone, I have wells that are plugged/abandoned and /or shut-in. Can anyone tell me how to find out which one’s they are and when they were P/A or shut-in. Thank you, KDB
SJK,
I’m not sure if you saw my reply to one of your other posts on the same subject last week.
“The decision to sell or lease depends more on your personal life than anything else. If you think you might want to sell, do not lease it. It will devalue the selling price more than you get out if the lease in most cases.”
It is hard to recommend holding or selling. It is a personal decision you will have to make based on what is best for you. There are two extreme right and left opinions. 1)There are those that will sell anything that has any cash value. Usually to support their life style. And usually selling as a quick way to “fix” financial issues due to living beyond their means. An offer comes in the mail for $1000 and acre and they do the math. 5 acres = $5K. Pay off that credit card they keep calling about payment on, catch up a few bills, take a the family on a cruise, or the worst…. The car is not in too good of shape, that $5000 will make a good down payment on a new $55,000Tahoe.
- There are the ones that say “never ever” sell your mineral rights “ever”. Some say the same about surface rights. It is a personal decision for you to make. They may drill a well on it in 1-2 years or it may not see one for another 20-30 years. If you do decide to sell, you want to make sure you know what you are selling. I’d also suggest marketing it to others instead of simply taking an offer that was mailed to you.
I disagree with part of Lawrence’s advice below. I don’t think borrowing money to speculate on unknown profits is a wise thing to do. If you have to borrow the money, you should not be purchasing mineral rights. You also have to look deeply into your family dynamics before purchasing from a relative. Can your relationship survive the transaction? If a nice well is drilled on it and you make 3x the amount paid within a year, how are they going to feel about that? Is it going to damage the relationship? I’ve seen the same thing happen with siblings. Joe sells to Mary and after Joe sees the income, he wants Mary to “make it up to him”. Or I have seen Joe loose his share to a bankruptcy. When the well hits 4 years later Joe feels his other 3 siblings should divide their 3 shares with him.
We also own about 6 acres in the same section (16-2S-4W). While I would entertain selling it, it would take quite a bit more than that to buy it. There are some very good wells being drilled in the immediate area. We have 3 new wells in the section to the north. One them produced enough oil to pay for the well in the first month of production. There is no doubt the company that made you the offer plans on making a profit. You don’t pay out that kind of money without doing your homework. But they are taking a risk, although a calculated risk, they are taking a pretty big risk.
Rick thank you so much for everything. That is great advice and I very much appreciate it! Yall are the best. I know you don’t have to take the time to write that. I’m so thankful.
SJK. 750 an acre does not sound bad BUT you may be able to do better by waiting for the pooling. Especially if you only have a half acre. You might want to consider less bonus with more % of the royalty. I assume your 750 is based in 1/3.
Thanks. I do have a couple of questions I would like to ask them about lease terms. Sounds like they will listen.
SJK…I would be very suspicious of anyone trying to force you to make such a big decision in only a few days. I know that sounds like big bucks for your acreage but only 3 years ago we would have been tickled to get half that for our minerals but thankfully it wasn’t being offered to us then. Since then they have drilled multiple wells on our little piece and we have been offered many times that from several different buyers. Our highest offer for some of our acreage has been $17,000 an acre and we are not selling because we believe it will be more valuable to us to hang on to it. Like Vicki said “everyone’s situation is different” and we don’t want to tell you what to do but unless you really need the money at this time I’d suggest keeping your royalty or maybe even selling 1/2 if you REALLY need to and hanging on to the rest. Even at that I believe there are people (on this forum even) that would offer you more for you royalty. We live here between Lindsay and Velma where this oil boom is like no other we’ve ever experienced in the 40 some odd years we’ve been associated with the oil business! Some in 2n4w are getting as many as 10 wells drilled on one of their sections and have been offered right at $20,000 an acre I believe they said!!! It’s HOT, HOT, HOT!!! And I’m not talking about the weather! Best Wishes in whatever you do!
I don’t need the money to sell. My sisters are all selling. So I am just confused. I can’t thank you guys enough for helping me. I joined this forum to get educated. Thanks so much. I won’t sell. It is exciting 
Thanks everyone !
She didn’t mention any royalty. Do I have royalty? I’m so clueless:)
And it’s 750 for half the acre
Yes. When you lease any minerals taken from your property are subject to the terms of the lease. I company pays you a percentage of everything that comes out of the ground (less expenses). So if you bargain a 1/4 interest that would be more than a 3/16’s interest (3/16’s is what I meant to put on my earlier post). Look at your lease and you should be able to see the percentage.
If you want to research your “pre-lease” it’s commonly known as a Top Lease. I am usually not in favor of top leasing for many of the same reasons I don’t like unpaid options in a lease agreement. If someone wants to top themselves in a top lease, I would say , why don’t we just jump to a new lease agreement, a novation. The reason a company would want to top themselves is in hopes that a well is drilled during the period of the first lease so that they never need pay you the remainder of the top lease bonus. They want insurance and they want you to sell them the insurance at a discount. They also get the advantage of your minerals not hitting the open market again where the market and competition sets the price. Good luck.
Thanks RW!
Has anyone dealt with Echo Energy? We have an attractive lease offer from them. I understand that they are folks who left Chesapeake, but can’t find much about them on the internet.
Ed - Thank you for your updates and eyes on the scene.
SJK, I received your friend request and just sent you a lengthy message (I think, lol). Let me know if you failed to get it and I will try again.
K Dawn, very pretty guitar or uke or…? Is it playable or just art?
Hello again, can anyone tell me where I can read the statutes regarding an oil companies obligation to pay if they Horizontal drill in your section when you are held by production? Thank you, KDB
Friday bearcat land called me to offer what they call a pre lease on the minerals we own in section 21 Stephens county. We each own 1/2 acre in that section and we leased those to bearcat in April 2012 that lease expires in April 2015 so they are offering to lease again in advance Last time they paid us 375 each and now they want to pay 750 each but because they are leasing ahead of time they want to pay 25% now and 75% in May I’m thinking of asking for all of it now but at least 1/2 of it. Let me know what yall think I know this is a good leasing company and there is no harm in leasing our rights. However after being on the forum I know I won’t take less then 100% upfront. Does 750 for half an acre sound ok? If y’all are sick of my questions I understand :)