Well Proposal Angela South

[Slinsokla]

I received a well proposal from Gulfport for Angela South 1-27X02H. Grady county. It has 5 options to pick from as to my interest. Never had to handle these things. How do I know which interest to pick?

[TODD_M_Baker]

If it’s a good well, you want more royalty.

[M_Barnes]

You can ignore the letter and wait for pooling or lease with anyone else that offers you a lease. If you are new to leasing, it is wise to get a good oil and gas attorney to look over any draft lease and make the significant edits that are needed.

The original Angela wells are good, so this is an extension of the play. I always pick the highest royalty. The bonus is irrelevant to me as the longer term royalties at a higher royalty amount far exceed the bonus payment. In this case, I would expect to see more than one Angela South well in the future.

[Don_Bray]

My family members and I also received the well proposal. We have minerals in all 4 sections, but that section 3-3N-6W is unleased. Gulfport included a paragraph that says, “It appears that you might claim to own an interest in Section 3-3N-6W. Our records indicate that you do not own any interest in Section 3-3N-6W that would lead to you owning an interest in the well, and this proposal is intended for curative purposes only”.

Our (small) interest in Section 3-3N-6W is in the NW 1/4 of the section and the wellbore will enter and exit the NE 1/4. In a follow up email Gulfport says their pooling order will be for the NE/4 of Section 3-3N-6W. Makes me believe they are planning an irregular spacing (160 acres) for Section 3-3N-6W.

[M_Barnes]

I was thinking along those lines as well. Only a small portion of 3 might be in the pooling.

[Slinsokla]

My letter includes 3 other legal descriptions for the proposed well along with 3-3N-6w. Those don’t appear to be in question. So do I understand correctly that I can choose to NOT respond to the letter and I will still get paid? How does this work? Will I get another offer later? This is so foreign to me, I’m new to handling these things.

[M_Barnes]

The other descriptions are shown above on the map. No guarantee that you will be paid unless you take some action. You can lease with Gulfport or someone else-no guarantee that any other company will make an offer. You might get a pooling offer, but I suspect the only a small portion of section 3 NE4 will be included in the pooling.

This is a bit of an odd one with the wording on those letters. I would suspect that only the NE4 of section 3 will be included in the pooling. If you own in that quarter, then you have more options than someone in the other three quarters.

[MD_TX]

I also received a letter via certified mail from Gulfport related to Angela South. My brother passed away two years ago and identified me as his sole heir, but I did not go through probate. The letter is addressed to my brother, if living or if deceased, his known and unknown heirs, successors and assigns, but has my current address in Texas. At the time of his death, he lived in Kansas. My brother had not identified his ownership in Grady County to me prior to his death, and I do not have experience with well proposals, so I have a few questions and appreciate your guidance.

1. How can I confirm this is indeed related to my brother? He has a very common name, and there is no middle initial on the letter. There was a time my brother lived in Oklahoma. I have two calls into the Gulfport Landman, from over a month ago, but no response.

2. The law offices of Charney Brown are also listed on the documents, would they have the information to confirm this relates to my brother?

3. The letter identifies Angela South 1-27X02H, Sections 27-4N-6W, 34-4N-6W, 3-3N-6W, 2-3N-6W with five options with lease and royalty amounts, but how do they determine the percentage of ownership if royalty payments are made or identify the net mineral acre ownership? I do not see any information in the documents.

4. Could I/Should I just select an option and return the election letter to Gulfport and it will be their responsibility to review and approve title?

5. I initially had a concern the letter might be a scam, because my brother was an accountant and had not identified this ownership previously. Finding other posts here related to the same well proposal lowers my concerns, but is there anything I should be cautious about?

Thank you for your review and assistance.

[M_Barnes]

1/2. Contact the law office and ask what title information do they have to relate the issue to your brother and then what do you need to do to get the title into your name. It may require probate.
3. Each of those wells will have a slightly different decimal amount since they are different lengths and cross each of the sections in different spots. The formula that is used is net mineral acres/actual spacing acres x royalty x % of perforations in your section(s) owned. 4. I never answer those letters. I either lease with the best company competing to lease or wait for pooling. In the meantime, if you are inheriting you need to get your title straight or you may end up getting forced pooled and only assigned the lowest royalty. You want the highest royalty.
5. It is not a scam. Gulfport has the wells immediately to the NW and they are very nice wells. This is the extension of the trend to the SE. Since your brother’s name is common, he may or may not own it, but you need to track it down.