I received a certified letter from Oxley Energy saying they plan to test the Harshorne, Upper Atoka and Middle Atoka formations, drilling to a depth of 9500 feet. I am being asked to identify one of three options: participate in paying for the well costs, lease/assign my interest at $100/ acre with 3/16 royalty interest, or lease/assign interest at $125/acre with 1/8 royalty interest. I have no idea how many acres I have an interest in so can’t calculate if this is worth anything or not (my great aunt owned land there that I assume is where this is). Can anyone help me figure out how I should proceed? I thought wells are usually drilled to 13,500 feet, and does anyone know if there oil/gas is currently being produced in this area?
There is some production in the area. Attached exhibits from the increased density hearing from the section to the south (30). 19 is on the north side of the fault.
https://imaging.occ.ok.gov/AP/CaseFiles/occ30438974.pdf
This looks to be a vertical well and not a horizontal well. I usually take the highest royalty even though it has the lowest bonus paid as the royalty usually wins out in the long run.
You can ask the leasing agent how many net acres they are have for you. Ask them if your title is clear or if you need to clean it up. The draft lease that they give you will not be in your favor, so wise to get legal help to negotiate it to a more favorable wording. Or you can wait for force pooling which is what I usually do.
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I do not like to respond to the informal letter offers that ask you to fill in the blank. No reason to do so as this could create problems. But it is worth a conversation about the items M_Barnes suggested.
This post is not legal, investment or tax advice, it is for discussion purposes only. Reading or responding to this post does not create an attorney-client relationship.
Many thianks! We wondered about getting a lawyer, we’ll try to find someone.
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