First off, thank you for any help the group might be willing to offer on the fairness of a mineral lease offer by Calyx Energy III, LLC for mineral rights in Hughes county OK.
The offer is for $300 per net mineral acre with a 3/16th royalty for a 3 year lease.
The rights are located in 10-9N-9E - 6.666685 net mineral acres.
Mark, I don't know if this will be helpful or not re 10-9N-9E but I just leased to Calyx in 2-9-9, 12-9-9, 28-9-9, and 30-9-9 for the same terms except lease bonus of $350 / acre. Their initial offer was $300 / acre. Robert
Calyx has a bunch of pooling pending in 9N-9E. 10 is on the list, but no hearing date set. A few of them had late April hearings, but no news yet. Those will give you a good clue.
Always ask for more. First offers are usually low. Always ask for 1/5th just to see if they are doing it. A couple of companies in the area did some in 2017. This is gas country, so won't be getting the high oil bonus numbers.
Do not sign the first lease they give you. There are some clauses that you should try to negotiate to get a better deal for you.
Thanks Robert! Any info is appreciated at this point.
Thank you so much for the information. I hate to display my ignorance of knowledge of leasing of mineral rights, but I’m trying to help my elderly mother and I have no experience dealing with them.
What does pooling mean?
What clauses should be negotiated into the lease?
I’m sorry for asking such, what must seem to you, as basic information.
Everyone has to start somewhere. We all did.
In Oklahoma, operators want to get as many folks leased as possible before they go to the Ok Oil and gas commission (OCC) to get permission to drill the well. Sometimes, they cannot find everyone and they also do not want to drag the process out if they have a rig coming. They can go to the commission and ask for a "force pooling" which is essentially a force lease by the OCC.
The operator will testify as to why they want to drill, what reservoir(s) they are planning to go for, what lease offers they have made, etc. The commission will make a ruling regarding a set of bonus/royalty pairs that are fair market value and will sign an order with that information. Anyone who has not leased as 20 calendar days to pick one of the options and reply to the operator. If you do not reply in the stated time frame, the operator will assign the lowest royalty and the highest bonus (usually bad for the mineral owner over time). The operator will hold those funds in a separate fund for those folks. After seven years, they turn them over to the state and then folks have to get them from there.
In your case, right now is the time to lease or you can wait for the force pooling. Pros and cons to each.
The booklet below will help explain things to you. Come back if you want some answers to better lease clauses. The ones offered are usually all in the operator favor and not the mineral owner. All clauses are negotiable, some with more success than others.
Thanks for your understanding and willingness to share information. I will read the booklet you’ve provided and learn as much as I can prior to contacting the land agent. Thank you!!!
Current sales of mineral rights in Hughes County are far higher. A lease should offer about 1/3rd the sale prices. Prices do vary according to the geology and the nearer activity is, but someone thinks it will get active if they are offering to lease or buy.
This should be helpful for asking bonuses and royalty.
The activity is moving from Stack and scoop to Hughes County. The lease bonus and royalty would go up. Longer you wait better the terms you should be able to get. It is not only horizontal drilling but a 1280 acre Unit. I will not lease for less than four figures and 1/5th royalty. I prefer pooling because the pooling term ends in 6-12 months except HBP. It is wrong to call it gas country. There is also oil production from Calvin to Second Wilcox.
Jaffreyzafar,
I would offer a comment here, i.e., I own 3.33 net mineral acres in Hughes County. I have had a recent offer from FAIRMOUNT, DALLAS TX. to buy my minerals outright, for $3.850.00 per net mineral acre. I sent FAIRMOUNT a thank you for their interest but DECLINED THEIR OFFER. I received another offer to buy outright and declined their Niggardly offer of $1800.00 bucks per net mineral acre. My minerals are in a most “delicious” WOODFORD FORMATION. TIZ REAL SWEET STUFF that the hydrocarbons are so plentiful in Hughes County that four new wells are SPUD FOR LATE SEPT. '18… in my S21/07N/10E. Hope this information is helpful to another interested FORUM member…Leta C.
There are bunch of pooling orders by Calyx Energy in 9N-9E with 1280 acre spacing. One good well will sky Rocket the Lease price and royalty. I love delayed election on well by well basis.
Leta I think you did the right thing. I received an offer of $4050/acre for my minerals, located in 35,36- 9N-NE from a land Company for my 400 NMA which I politely declined. Stack and Scoop has slowed down and the Horizontal drilling activity is moving to Hughes County. My minerals are located in one of the most active areas of Hughes County. Lots of leasing, 1280 acre spacing, pooling, permit to drill, drill intents. New drilling intents are direct offsets to my acreage. What is expert opinion. I value all the opinions.
I have received several offers this year and one just yesterday and have been texting back and forth with this gentlemen.I have 26.6 mineral acres in Hughes county section 23 7N 8E. I’m on the forum and every time I am I learn something, but have so much to still learn.This person told me that he found out that there have been 10 wells drilled on my section( news to me) again this is what he found out.He sent a picture of some paper work that said plugged- abandoned.He than got back to me and said those wells were from 1980 except for one from 1968. He said they were all vertical wells.He said no production data on any of them from online tax records. He said he could probably get me 2,100.00 an acre but I said no thank you.My brother sold his third (26.6) mineral acres back in 2014 for 2,000.00 an acre. Does anyone have any information or opinion on this? Would appreciate any feed back. Thanks Michelle
Mary, there are 3 horizontal wells in your township with completion reports on file with the OCC. They are all in sections to the west of section 23 and are Woodford wells.
Here are links to those reports: Horizontal well in Sections 10 and 15 - 7N - 8E http://imaging.occeweb.com/OG/Well%20Records/1DD37797.pdf ; Horizontal well in Section 20 - 7N - 8E http://imaging.occeweb.com/OG/Well%20Records/1DD2766F.pdf ; Horizontal well in Section 17 - 7N - 8E http://imaging.occeweb.com/OG/Well%20Records/1DD29C18.pdf
Hello Martha, I have not been keeping up with leasing activity during the last few months. You advised Dye Oil Company was leasing in section 25. holding mineral rights for 8N, Range 8E Containing 76 acres more or less. What is the best and quickest way to catch-up on activity in this section?? Do you have information that will help?? Thanks, Dennis Haywood
Nothing happening in 25-8N-8E after those leases. The action in the area has been in 20 and 30 by Lance Ruffel Oil & Gas and in 22 by Wright Drilling. BBR has a permit in Sec 1
There is a big difference between vertical and horizontal wels… If the lease bonus is $200-300/acre in a place then for a horizontal well 2-3 year term lease bonus is $1500 to 2500 plus one-fifth royalty. In places where vertical wells produced 3-4 BOPD the horizontal wells produced 1,000 to over $ 3,000 BOPD. A good nearby example is STACK and SCOOP play where the vertical wells produced 4-5 BOPD. But the horizontal wells produced in multiples of 100 and 1,000 BOPD. I was talking to a mineral company yesterday. They said they recently paid over 27 thousand/acre in the Kingfisher County. The geology of Hughes County seems to have better potential than STACK and SCOOP. I am going to hold off until horizontal drilling is well underway.
