Just received a lease offer from a group in Norman called TODCO PROPERTIES. Strange submission included a photocopy of a draft but said it was only for my records as they would pay by check. Anyone familiar with the group?
Also it was an offer to lease property in 09/07/06 Grady County that has the Larkin well leased to Unit Petroleum. No production last year at least. But held by production? How do I ascertain that I am free to lease?
Older than the Hills (My neighbors, fortuitously)
I believe the Larkin well is in Sec. 9-6N-7W, Grady Co.
TODCO is a leasing agent for many different operators. They have been around for a long time.
9-7N-6W appears to be held by several wells. You are probably talking about 9-6N-7W is you have the Larkin well. Production ceased in December 2019. Did you get any kind of shut in payment in the 2020? If not, then you are probably free to lease.
If it were me, I would stall for a little bit as there are no current leases that have been filed in that section in the last year. I would ask Todco who the operator will be and see if they tell you. There is some horizontal drilling in the area, but the current players seem to be Red Wolf in sections 1&12 and Camino in sections 12,14,23,and 26. Something might develop for your section in the future. The draft lease that they offer will not be in your favor, so will need some negotiation for more favorable terms. I never hand over a signed lease without getting paid first. My accountant or attorney holds the lease until payment is exchanged. I also ask what they are offering for all royalties. There have been quite a few leases for 25% in 2021.
I’ve done business with Todco in the past, specifically a guy named Rob Cargile. It was a positive experience. Their offer was decent but we negotiated a fair price and he was great. M Barnes is correct that they are a leasing agent for operators. They don’t drill the wells.
Always as part of your changes to the lease ( Exhibit A ) include a NO WARRENTY clause. Be sure your attory that reviews this lease includes that in addition to all the other changes that will be part of your Exhibit A. It has been suggested only a photocopy of the signed lease with ( DO NOT FILE ) be given to the landman for his attorney review. As stated by Barnes never give them the lease until you have the funds. ( the Bonus payment I guess in this case )
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