Would really appreciate some advice here, I'm a total novice at this. Please forgive me if I get some of the terminology wrong.
A week ago I got a telephone call from someone asking if I was related to a person who was, in fact, my great grandmother. She apparently had some mineral rights to 20 acres in Grady County (3-6N-6W), and he was offering us a lease agreement for 3/16ths royalty -- no bonus was mentioned and we wouldn't have known there was such a thing had we not found this web site.
He said it was important that we respond by April 9th, or we would be force-pooled and receive 12% royalty. A week ago I knew nothing about the existence of these rights, so we're indebted to him for that. At the same time I assume he isn't just doing this out of pure kindness and generosity, and that this probably isn't a great offer.
Can anyone shed any light for me here? Should we be concerned about the April 9th date. If we don't accept his offer, how do we go about claiming whatever there is to be claimed?
I'm not to far ahead of you in experience but have found that you don't want to fall for that offer. First I found out that force pooling is not a bad thing and in most cases, if you do nothing at all, you are protected by the Okla Corporation Commission as the pooling has to come before that Commission anyway.
Most common in royalties are bonus money and 1/8, bonus money and 3/16th and no bonus money and 1/4 royalty.
He's trying to scare you into thinking you'll miss out on something if you don't act fast. Just think, if you have to do something in a hurry so someone says, it's usually not good for you.
I just completed a lease and I chose no bonus and 1/4 royalty.
I could of had $1200 for 1/8, $1100 for 3/16 and no bonus for 1/4.
That money mentioned is for per acre or acres, and per year for usually a 3 year lease.
This is incredibly helpful, thank you both VERY much.
I do still have some questions, I hope I'm not trying your patience too much:
I gather that by -not- responding before the 20 days are up, we are left with the choice of the 3 bonus/royalty packages. The implication is that if we -do- respond, it would be to try to negotiate better terms? I would assume that that route is not for rookies. . .
Once the 20 days is up, is there some time limit on when we have to elect which option we want? Is this something where we could actually wait until the well is in production and see which turns out to be the best deal?
Who do we contact to actually go about claiming this? It's currently still in my great grandmother's name, and she passed away many years ago. . .
When the 20 days have passed you get $850 and 1/8th and that is it . The cash is one time not per year. What name is it under? I can help with the election when you get ready.
I don't know if I understand the options or not. I think I understand the bonus/royalty tradeoff, and that after the deadline we don't get to choose, it's a flat $850 and 1/8th. What I don't know is how one makes an election -- who do you contact, what paperwork is involved, etc?
I meant that a person gets the bonus money and is for a year but but the lease is usually for 3 years. So if it was like $1000 that would be $3000 for the 3 year life of the lease right?
Doesn't it mean cash per acre and per year of the lease span?
Best bet....Take the bonus and 3/16 royalty.. Try to find out who the lessee really is not some landman. go to the main source if possible. My reasoning is they may not drill and you have nothing with 1/4 royalty and no money.
Happens all the time and you can lease again in three years if something does turn up...done it many times...
Best bet....Take the bonus and 3/16 royalty.. Try to find out who the lessee really is not some landman. go to the main source if possible. My reasoning is they may not drill and you have nothing with 1/4 royalty and no money.
Happens all the time and you can lease again in three years if something does turn up...done it many times...
I was sent a pooling order from Chesapeake on some Garvin County interest, sect. 28, 1N 3 W
Do we have to do this, after responding to the pooling order I received an offer to lease by Oxley...I feel like I am being bullied!
It has been pooled.
PHYLLIS TIMS said:
Best bet....Take the bonus and 3/16 royalty.. Try to find out who the lessee really is not some landman. go to the main source if possible. My reasoning is they may not drill and you have nothing with 1/4 royalty and no money.
Happens all the time and you can lease again in three years if something does turn up...done it many times...
Oxley was $100.00 more an acre so not too bad but still got 3 years and 3/16's..(.I think). The verbiage was "$250.00 an acre, plus an excess royalty of 1/16 (for a total royalty of 3/16ths)...such cash bonus plus overriding or excess royalty, when paid as set out in this order, is satisfaction in full fo rall rights and interest of such owner in the drilling and spacing units covered hereby, except for any1/8 royalty interest as defined in 52 O.S.?87.1(e)....whatever that means and I am afraid of what you are going to tell me..I should have taken the no cash, 1/4 but still naive about this pooling stuff so just didn't know. again, I felt pressured by their 20 days or else attitude and truly didn't want to lose it so chose something and sent it on before the date requried...what's the verdict?
I like that! No worries, then, huh? I just printed out a bunch of articles on pooling to try to understand it better...I was doing great until I joined this forum and started second guessing myself....but need to stay abreast of things. Does one have to respond to a pooling order or can we ignore it and wait for someone else to lease? or what happens after the 20 days if you don't respond? I have been throwing them in files for the past 5 years and haven't felt any bad repurcussions for ignoring them (that I know of)....now I feel like I get more and more, especially with Chesapeake and not sure what I'm doiing now.;;;I will read all my stuff and try to figure it out. thanks for your help!
Pooling Orders normally contain three options for mineral owners, two options are a mix of bonus and royalty (one a higher bonus, the other a higher royalty). The third option is participation in the well, which means you pay your share of the cost of the well and receive your share of the production. The participation option is not practical for the vast majority of mineral owners and very few choose that option. The Order will say that you have 20 days to make your election of the three options. If you ignore the Pooling Order and don't return a timely election, there is a default election in the Order. The default election is normally the higher bonus and lower royalty option. In other words, more money up front and a lower royalty %. The fact that this is the default election should tell you something- it is the one that the operator would prefer you to elect. They know that on average the operator comes out ahead by paying a higher bonus up front and a lower royalty over time.
Elizabeth You said in one reply that you" didn't want to lose it so chose something and send it on." In your next reply you said you "have been throwing them in files." Do you understand the difference in the options? Do you have other interest that may be pooled? If so starting asking you questions now, while you have people like Gabe that might help you.