Looking for assistance to review/recommend lease terms for 14-4N-9E Hughes County Oklahoma. Existing Lease company is entering new lease agreements and is making an offer per acre and 1/8 interest.
Mr. Wilson, I would need additional information, such as the number of acres you have, whether you own it 100%, and the bonus amount they are offering. Just off the top, a 1/8th royalty should be a non-starter. Way too low, even with a good cash bonus.
Welcome to the forum.
Leases that have already been filed in that section were back in 2018 at 1/5th (20%). No new leases have been filed yet. I always ask for the options at 3/16ths and 1/5th and 1/4th (which can occasionally be found).
Titan Resources has an increased density hearing in the E2 NW4. If this is your area, then that is why they are offering only 1/8th as the well is shallow and the reserves are small and the 1/8th makes more economic sense.
However… Foundation Energy is active in sec 15-4N-9E and they just pooled that section for $150 1/8th and $100 at 3/16ths and 1/5th for 20%, so that is much more interesting and means that you might be able to ask for more. Time for asking probing questions as to what the intentions are in section 14. You may have more options. You can be pooled at the shallow zone for a shallow well and wait to lease for the deeper zones for a horizontal well.
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