I recently inherited the mineral rights for 160 acres in noble county Oklahoma. I just received a proposal from a Landman on behalf of Juneau Oil & Gas. The offer was for $100 an acre and 3/16 Royalty. I am new to this game but $100 seems awful low. Anyone know what a fair offer should be. Here’s the location in the county. SW/4 of Section 16-20N-1E
I forgot to add this is a well proposal. They want to drill 5000 feet and test the Bartlesville formation.
Keep in mind that the bonus is a one-time event, even if it is fair the more important issue is the amount of the royalty which can last for decades. You may consider joining NARO (National Association of Royalty Owners) as members have access to some information regarding lease bonus amounts paid, terms, and royalty interest paid. Also, initial offers tend to be low-ball amount.
If you have the whole 160 acres, as opposed to a fractional interest, then you should be in a good bargaining position.
This post is not intended as legal or tax advice and no attorney/client relationship created hereby.
Also, you may need to do some family research on this section.
Did you file the probate documents in Noble County? Check the probate documents and see what the exact description is and whether or not you have a percentage of the 160 acres. It would be very rare for someone to have 160 acres after this many generations.
Next, there is already a well producing in section 16. State 16H was bought by NOGP Operating Company LLC in Houston.
https://imaging.occ.ok.gov/OG/Well%20Records/00576932.pdf
That well is already 640 acres, so you need to contact the operator and get into pay status if you are an owner at the perforated level of 5468-9152 MD. It is not a great well, but is still producing as of a couple of months ago. You also need to ask the operator if you are held by a lease, who the grantor was, what the royalty was, etc. They may need title documents from you. If you are leased, then you may not be able to be leased again at the shallower level. If your ancestor was force pooled (ask the operator), then you may be able to lease at the shallower depth. Pooling may only be for a certain reservoir and you might be open to lease.
Like Richard said, early offers may be lowball, so I always ask what they are offering for 1/5th and 1/4, who is going to drill, when are they planning on drilling, etc. I do not usually lease until closer to the drilling time or I happily do a force pool. Sometimes, I miss out, but most of the time it works.
The offers are based upon competition and the projected value of the upcoming well(s). Offers are lower this year.
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