My wife and her 3 sisters have been offered a lease (still waiting to see it) for $150 and 3/16. The landman says he's representing Charter Oaks. We live in Texas and have no idea whether this is a good deal with a good company, or whether we should try to find another lessee. Would we even have a chance with someone like Continental Resources?
You might want to hang tight for a bit and see what plays out. Ranken is Force Pooling 5, 6, and 8 around you. The notice I just received on 8 was $125/ac and 1/8 royalty or $100/ac and 3/16 royalty. The hearings on 5 and 6 are in June. So your offer is a little better. However, your section sits where the Woodford is about 200' thick which needs a better offer. I think this is the one that I saw that someone is protesting and coming to the hearing with a higher offer than the $150 that had been offered. If you wait until the force pool, you will generally get the best offer because they will go by the best offers of the contiguous with your section. My suggestion is to never take the first offer, because it is usually a teaser and lower than what they will really go for if you wait. Continental is focussing farther to the west, but who is to say they won't move into your area. Since Ranken is right next door and has to drill within 365 days on 8, they might be another competitor to Charter Oaks. The spacing in 5, 6, & 8 are for vertical wells with 80 acre spacing down to the Arbuckle and everything on the way down. They may be doing test before going for horizontal Woodford.
West Star Operating, Sam B Rose, United Land Company and UDX have been leasing in the immediate area over the last few months so "someone" is trying to put a deal together using the leasing companies.
Hope that helps. Hit reply if you have more questions. Hint Hint, don't take a landman lease..... read this forum and especially the SCOOP counties of Stephens, Grady, Garvin to get answers to many of your questions.
Thanks for your e-mail. It sounds like you have a lot more knowledge than we do and I'm very appreciative that you're willing to share it. Here are my questions (and I'm sorry if they seem elementary, but I'm trying to learn as much as I can as fast as I can).
- If Ranken is force pooling 5, 6, and 8, why would 7 not be included, too? Do you know if anyone is going to try to force pool the area where our minerals are located?
- What kind of leasing does it take to reach a point where a company can force a pool?
- If our section is going to be force pooled, it seems it would make sense to just wait for that to happen unless I'm being offered an extravagant amount. Is that correct?
- The landman that called me said he was trying to lease up 16 sections. That seems like a lot. Is it?
- When you said the Woodford is 200' thick, is that good, average, or below average? Why would the drillers not shoot for the Woodford right away?
- Do you know whether Charter Oak is any good? I've poked around and it looks like their completed wells produce less than anyone else's.
- Are there any terms that you think we should ask for?
Thanks so much. I'm happy to know there are people out there who are willing to help those of us who just don't know the business, but are expected to make decisions as if we do.
M Barnes said:
You might want to hang tight for a bit and see what plays out. Ranken is Force Pooling 5, 6, and 8 around you. The notice I just received on 8 was $125/ac and 1/8 royalty or $100/ac and 3/16 royalty. The hearings on 5 and 6 are in June. So your offer is a little better. However, your section sits where the Woodford is about 200' thick which needs a better offer. I think this is the one that I saw that someone is protesting and coming to the hearing with a higher offer than the $150 that had been offered. If you wait until the force pool, you will generally get the best offer because they will go by the best offers of the contiguous with your section. My suggestion is to never take the first offer, because it is usually a teaser and lower than what they will really go for if you wait. Continental is focussing farther to the west, but who is to say they won't move into your area. Since Ranken is right next door and has to drill within 365 days on 8, they might be another competitor to Charter Oaks. The spacing in 5, 6, & 8 are for vertical wells with 80 acre spacing down to the Arbuckle and everything on the way down. They may be doing test before going for horizontal Woodford.
West Star Operating, Sam B Rose, United Land Company and UDX have been leasing in the immediate area over the last few months so "someone" is trying to put a deal together using the leasing companies.
Hope that helps. Hit reply if you have more questions. Hint Hint, don't take a landman lease..... read this forum and especially the SCOOP counties of Stephens, Grady, Garvin to get answers to many of your questions.
Will do my best.
1. Don't know if Ranken will force pool 7 or not. Just know what is already on the OK docket. I own parts of 5, 6, and 8, so received the notices. No one is listed on 7 at the moment. Do you know how to search the OCC docket list?
2. I think that once they get over 50% leased, they can force pool. It is to keep commerce running and not let one or more mineral owners slow things down. The idea is that the force pool gives the "best terms" (usually, but not always) to those that are the holdouts. You usually get two-five options and you can pick one of them. If you cannot be found or don't answer, the highest bonus and lowest royalty option will be picked for you and your money will be held in suspense by the operator for three years, then turned over to the state. Better to claim it in three years, because the state will take a cut of it. I just had that happen. (My mom died and I didn't know she was missing some funds until recently.)
3. You are correct on the this one. I usually wait, especially if I only have a few acres. However, I am a geologist, so sometimes I have more knowledge about certain areas and will lease earlier.
4. A township is made up of 36 sections, so sounds like he has been directed to lease as much up as he can to cover a particular prospect or play (an area of geologic interest). They want to lease the highest, thickest, "bestest" area first before anyone else gets in there.
5. 200' for the Woodford is good. This part of McClain county is not in the main SCOOP play. It is in a different fault block and a slightly different basin which has not been drilled up and "de-risked" yet. Continental Resources, Newfield and Marathon are drilling to the west in the main SCOOP area. Smaller companies are drilling in this area. Quite often they drill vertical holes first to see what they have. Then they come back and drill horizontal wells. This area has several shallower pays, so that is part of the plan as well.
6. I don't know much about Charter Oaks, so will let that one slide.
7. What you have been offered is reasonable. If it were me, I would wait for the force pool and then decide. The pending poolings in June may change the amount offered if someone comes in with a higher bonus offer, but not by much. Depending on the area, I usually choose the 3/16 option or higher royalty if I can get it. I often go for a $0/ac and 25% if it is offered and the area is known to be successful. If it is wildcat area in a new play, I go for the 3/16. It is a choice of risk. Some money now and maybe nothing later if lots of geologic risk, or no money now and a whole lot more later if successful (geologic risk low).
With a pooling, they have to pool specific horizons within a specific time frame. With leasing, you have to be VERY careful about the lease terms. The one the landman will give you will benefit the oil company and not you. Everything is open to negotiation, but sometimes you have more power than others. Get a depth clause!
Read up on the Garvin, Grady and Stephens forums. Go to the section on the Garvin site near the top that has Links for Mineral Owners. Very helpful! Then if you want to go offline, send me a friend request.
C Groff said:
Thanks for your e-mail. It sounds like you have a lot more knowledge than we do and I'm very appreciative that you're willing to share it. Here are my questions (and I'm sorry if they seem elementary, but I'm trying to learn as much as I can as fast as I can).
- If Ranken is force pooling 5, 6, and 8, why would 7 not be included, too? Do you know if anyone is going to try to force pool the area where our minerals are located?
- What kind of leasing does it take to reach a point where a company can force a pool?
- If our section is going to be force pooled, it seems it would make sense to just wait for that to happen unless I'm being offered an extravagant amount. Is that correct?
- The landman that called me said he was trying to lease up 16 sections. That seems like a lot. Is it?
- When you said the Woodford is 200' thick, is that good, average, or below average? Why would the drillers not shoot for the Woodford right away?
- Do you know whether Charter Oak is any good? I've poked around and it looks like their completed wells produce less than anyone else's.
- Are there any terms that you think we should ask for?
Thanks so much. I'm happy to know there are people out there who are willing to help those of us who just don't know the business, but are expected to make decisions as if we do.
M Barnes said:
You might want to hang tight for a bit and see what plays out. Ranken is Force Pooling 5, 6, and 8 around you. The notice I just received on 8 was $125/ac and 1/8 royalty or $100/ac and 3/16 royalty. The hearings on 5 and 6 are in June. So your offer is a little better. However, your section sits where the Woodford is about 200' thick which needs a better offer. I think this is the one that I saw that someone is protesting and coming to the hearing with a higher offer than the $150 that had been offered. If you wait until the force pool, you will generally get the best offer because they will go by the best offers of the contiguous with your section. My suggestion is to never take the first offer, because it is usually a teaser and lower than what they will really go for if you wait. Continental is focussing farther to the west, but who is to say they won't move into your area. Since Ranken is right next door and has to drill within 365 days on 8, they might be another competitor to Charter Oaks. The spacing in 5, 6, & 8 are for vertical wells with 80 acre spacing down to the Arbuckle and everything on the way down. They may be doing test before going for horizontal Woodford.
West Star Operating, Sam B Rose, United Land Company and UDX have been leasing in the immediate area over the last few months so "someone" is trying to put a deal together using the leasing companies.
Hope that helps. Hit reply if you have more questions. Hint Hint, don't take a landman lease..... read this forum and especially the SCOOP counties of Stephens, Grady, Garvin to get answers to many of your questions.
Just a couple more questions and then I'll let you alone, I promise.
You mentioned the OCC Docket list for forced pooling requests. Can I see it? Can I put my name somewhere so they will let me know when it happens?
What would a depth clause accomplish? What would someone want the depth clause to say in an area like McClain County?
Should I be on the lookout for provisions about marketing money?
M Barnes said:
Will do my best.
1. Don't know if Ranken will force pool 7 or not. Just know what is already on the OK docket. I own parts of 5, 6, and 8, so received the notices. No one is listed on 7 at the moment. Do you know how to search the OCC docket list?
2. I think that once they get over 50% leased, they can force pool. It is to keep commerce running and not let one or more mineral owners slow things down. The idea is that the force pool gives the "best terms" (usually, but not always) to those that are the holdouts. You usually get two-five options and you can pick one of them. If you cannot be found or don't answer, the highest bonus and lowest royalty option will be picked for you and your money will be held in suspense by the operator for three years, then turned over to the state. Better to claim it in three years, because the state will take a cut of it. I just had that happen. (My mom died and I didn't know she was missing some funds until recently.)
3. You are correct on the this one. I usually wait, especially if I only have a few acres. However, I am a geologist, so sometimes I have more knowledge about certain areas and will lease earlier.
4. A township is made up of 36 sections, so sounds like he has been directed to lease as much up as he can to cover a particular prospect or play (an area of geologic interest). They want to lease the highest, thickest, "bestest" area first before anyone else gets in there.
5. 200' for the Woodford is good. This part of McClain county is not in the main SCOOP play. It is in a different fault block and a slightly different basin which has not been drilled up and "de-risked" yet. Continental Resources, Newfield and Marathon are drilling to the west in the main SCOOP area. Smaller companies are drilling in this area. Quite often they drill vertical holes first to see what they have. Then they come back and drill horizontal wells. This area has several shallower pays, so that is part of the plan as well.
6. I don't know much about Charter Oaks, so will let that one slide.
7. What you have been offered is reasonable. If it were me, I would wait for the force pool and then decide. The pending poolings in June may change the amount offered if someone comes in with a higher bonus offer, but not by much. Depending on the area, I usually choose the 3/16 option or higher royalty if I can get it. I often go for a $0/ac and 25% if it is offered and the area is known to be successful. If it is wildcat area in a new play, I go for the 3/16. It is a choice of risk. Some money now and maybe nothing later if lots of geologic risk, or no money now and a whole lot more later if successful (geologic risk low).
With a pooling, they have to pool specific horizons within a specific time frame. With leasing, you have to be VERY careful about the lease terms. The one the landman will give you will benefit the oil company and not you. Everything is open to negotiation, but sometimes you have more power than others. Get a depth clause!
Read up on the Garvin, Grady and Stephens forums. Go to the section on the Garvin site near the top that has Links for Mineral Owners. Very helpful! Then if you want to go offline, send me a friend request.
C Groff said:Thanks for your e-mail. It sounds like you have a lot more knowledge than we do and I'm very appreciative that you're willing to share it. Here are my questions (and I'm sorry if they seem elementary, but I'm trying to learn as much as I can as fast as I can).
- If Ranken is force pooling 5, 6, and 8, why would 7 not be included, too? Do you know if anyone is going to try to force pool the area where our minerals are located?
- What kind of leasing does it take to reach a point where a company can force a pool?
- If our section is going to be force pooled, it seems it would make sense to just wait for that to happen unless I'm being offered an extravagant amount. Is that correct?
- The landman that called me said he was trying to lease up 16 sections. That seems like a lot. Is it?
- When you said the Woodford is 200' thick, is that good, average, or below average? Why would the drillers not shoot for the Woodford right away?
- Do you know whether Charter Oak is any good? I've poked around and it looks like their completed wells produce less than anyone else's.
- Are there any terms that you think we should ask for?
Thanks so much. I'm happy to know there are people out there who are willing to help those of us who just don't know the business, but are expected to make decisions as if we do.
M Barnes said:
You might want to hang tight for a bit and see what plays out. Ranken is Force Pooling 5, 6, and 8 around you. The notice I just received on 8 was $125/ac and 1/8 royalty or $100/ac and 3/16 royalty. The hearings on 5 and 6 are in June. So your offer is a little better. However, your section sits where the Woodford is about 200' thick which needs a better offer. I think this is the one that I saw that someone is protesting and coming to the hearing with a higher offer than the $150 that had been offered. If you wait until the force pool, you will generally get the best offer because they will go by the best offers of the contiguous with your section. My suggestion is to never take the first offer, because it is usually a teaser and lower than what they will really go for if you wait. Continental is focussing farther to the west, but who is to say they won't move into your area. Since Ranken is right next door and has to drill within 365 days on 8, they might be another competitor to Charter Oaks. The spacing in 5, 6, & 8 are for vertical wells with 80 acre spacing down to the Arbuckle and everything on the way down. They may be doing test before going for horizontal Woodford.
West Star Operating, Sam B Rose, United Land Company and UDX have been leasing in the immediate area over the last few months so "someone" is trying to put a deal together using the leasing companies.
Hope that helps. Hit reply if you have more questions. Hint Hint, don't take a landman lease..... read this forum and especially the SCOOP counties of Stephens, Grady, Garvin to get answers to many of your questions.
1. If you are in a section they are going to pool, they will mail you the information, but you can see it online as well.
Go to the Oklahoma Corporation Commission website. www.occeb.com
Conducting Business/ Oil and Gas /Database Search /Case Processing Web Application
I would say follow the directions, but I am on a MAC and mine just locked up since it looks like my JAVA is out of sync. If you have a PC it usually works. Call the help desk if you have trouble. Or yell and someone on the forum can help you. I am going to have to shut down and work through it again. Theoretically, you can type in your location and not have to know the case file.
2. the depth clause protects you for the future. If a company leases with no depth clause, they can lease to the middle of the earth, drill something shallow, get production and you will never get to lease to anyone again until that production is shut down. If you lease with a specific depth clause, they can only lease to that depth and you can re-lease for something deeper down the line. My depth clause reads:
"As to expiration of the primary term, this lease shall terminate as to all depths 100’ below production from the then deepest perforations. "
If you are force pooled, they can only get production from the reservoirs mentioned in the force pool. Again, you have choices down the road. (Note: the companies are starting to force pool many horizons now, instead of just one or two.)
3. Not sure what you are asking on this one. "marketing money"? Ask it a different way.
I would suggest that you go onto the National Royalty Owners Website and order this really good little book by James Stafford It is called "Look Before you Lease". It is only about $5-8 I think. I bought it last year after my mom died and left me some minerals. Really explains how to do it in simple terms. Has a pretty good lease form in the very back.
C Groff said:
Just a couple more questions and then I'll let you alone, I promise.
You mentioned the OCC Docket list for forced pooling requests. Can I see it? Can I put my name somewhere so they will let me know when it happens?
What would a depth clause accomplish? What would someone want the depth clause to say in an area like McClain County?
Should I be on the lookout for provisions about marketing money?
M Barnes said:Will do my best.
1. Don't know if Ranken will force pool 7 or not. Just know what is already on the OK docket. I own parts of 5, 6, and 8, so received the notices. No one is listed on 7 at the moment. Do you know how to search the OCC docket list?
2. I think that once they get over 50% leased, they can force pool. It is to keep commerce running and not let one or more mineral owners slow things down. The idea is that the force pool gives the "best terms" (usually, but not always) to those that are the holdouts. You usually get two-five options and you can pick one of them. If you cannot be found or don't answer, the highest bonus and lowest royalty option will be picked for you and your money will be held in suspense by the operator for three years, then turned over to the state. Better to claim it in three years, because the state will take a cut of it. I just had that happen. (My mom died and I didn't know she was missing some funds until recently.)
3. You are correct on the this one. I usually wait, especially if I only have a few acres. However, I am a geologist, so sometimes I have more knowledge about certain areas and will lease earlier.
4. A township is made up of 36 sections, so sounds like he has been directed to lease as much up as he can to cover a particular prospect or play (an area of geologic interest). They want to lease the highest, thickest, "bestest" area first before anyone else gets in there.
5. 200' for the Woodford is good. This part of McClain county is not in the main SCOOP play. It is in a different fault block and a slightly different basin which has not been drilled up and "de-risked" yet. Continental Resources, Newfield and Marathon are drilling to the west in the main SCOOP area. Smaller companies are drilling in this area. Quite often they drill vertical holes first to see what they have. Then they come back and drill horizontal wells. This area has several shallower pays, so that is part of the plan as well.
6. I don't know much about Charter Oaks, so will let that one slide.
7. What you have been offered is reasonable. If it were me, I would wait for the force pool and then decide. The pending poolings in June may change the amount offered if someone comes in with a higher bonus offer, but not by much. Depending on the area, I usually choose the 3/16 option or higher royalty if I can get it. I often go for a $0/ac and 25% if it is offered and the area is known to be successful. If it is wildcat area in a new play, I go for the 3/16. It is a choice of risk. Some money now and maybe nothing later if lots of geologic risk, or no money now and a whole lot more later if successful (geologic risk low).
With a pooling, they have to pool specific horizons within a specific time frame. With leasing, you have to be VERY careful about the lease terms. The one the landman will give you will benefit the oil company and not you. Everything is open to negotiation, but sometimes you have more power than others. Get a depth clause!
Read up on the Garvin, Grady and Stephens forums. Go to the section on the Garvin site near the top that has Links for Mineral Owners. Very helpful! Then if you want to go offline, send me a friend request.
C Groff said:Thanks for your e-mail. It sounds like you have a lot more knowledge than we do and I'm very appreciative that you're willing to share it. Here are my questions (and I'm sorry if they seem elementary, but I'm trying to learn as much as I can as fast as I can).
- If Ranken is force pooling 5, 6, and 8, why would 7 not be included, too? Do you know if anyone is going to try to force pool the area where our minerals are located?
- What kind of leasing does it take to reach a point where a company can force a pool?
- If our section is going to be force pooled, it seems it would make sense to just wait for that to happen unless I'm being offered an extravagant amount. Is that correct?
- The landman that called me said he was trying to lease up 16 sections. That seems like a lot. Is it?
- When you said the Woodford is 200' thick, is that good, average, or below average? Why would the drillers not shoot for the Woodford right away?
- Do you know whether Charter Oak is any good? I've poked around and it looks like their completed wells produce less than anyone else's.
- Are there any terms that you think we should ask for?
Thanks so much. I'm happy to know there are people out there who are willing to help those of us who just don't know the business, but are expected to make decisions as if we do.
M Barnes said:
You might want to hang tight for a bit and see what plays out. Ranken is Force Pooling 5, 6, and 8 around you. The notice I just received on 8 was $125/ac and 1/8 royalty or $100/ac and 3/16 royalty. The hearings on 5 and 6 are in June. So your offer is a little better. However, your section sits where the Woodford is about 200' thick which needs a better offer. I think this is the one that I saw that someone is protesting and coming to the hearing with a higher offer than the $150 that had been offered. If you wait until the force pool, you will generally get the best offer because they will go by the best offers of the contiguous with your section. My suggestion is to never take the first offer, because it is usually a teaser and lower than what they will really go for if you wait. Continental is focussing farther to the west, but who is to say they won't move into your area. Since Ranken is right next door and has to drill within 365 days on 8, they might be another competitor to Charter Oaks. The spacing in 5, 6, & 8 are for vertical wells with 80 acre spacing down to the Arbuckle and everything on the way down. They may be doing test before going for horizontal Woodford.
West Star Operating, Sam B Rose, United Land Company and UDX have been leasing in the immediate area over the last few months so "someone" is trying to put a deal together using the leasing companies.
Hope that helps. Hit reply if you have more questions. Hint Hint, don't take a landman lease..... read this forum and especially the SCOOP counties of Stephens, Grady, Garvin to get answers to many of your questions.