I am trying to figure out why Bearcat Land on behalf of Continental would offer more money for a lease which delivers more % net revenue interest? If that money is a bonus, wouldn’t companies offer more bonus for a less return to the royalty owner? I would like to take the $1500 with 87.5% net revenue interest instead of the $500 with 80% net revenue interest, any day, but I am not sure what I would be giving up long term, if anything. This may sound confusing with good reason: I am confused. LOL Any insight would be greatly appreciated. Merry Christmas to all!
The choice is whether they drill or not. No drill, then lower NRI is better. If they drill, then you may be disappointed. Good luck.
Appreciate your insight. Question: Is there a way to know if they will drill or not anytime soon?
A successful horizontal well with many decades of production will deliver a larger royalty payout over many years if you choose the higher royalty such as 1/5th or 1/4th if offered. Additional wells may be drilled which further increases your payout. The one time bonus is ONE TIME.
For example. Section 8-4N-5W just to the west of you has portions of eight horizontal wells in the south half of the township and portions or four horizontal wells in the north half. Burk Royalty has just filed permits for two horizontal wells to the east of you in section 10.
Casillas already filed for two horizontal wells in 9/16-4N-5W in 2024. The causes were dismissed in August of 2025. They were just bought by Validus, so that might have been the reason.
If Continental is interested now, that is a good sign that they may have taken over the area. You can delay on leasing a bit and see if new OCC cases are filed. You can wait for other offers to come in to lease as drilling gets closer. Or you can wait for pooling.
If you have not leased in a while, it is wise to get a good oil and gas attorney to review any draft lease. They are not generally in the mineral owners’ favor and need significant edits so that you don’t lose money on the lease due to post production charges and other clauses. Some companies are easier to negotiate with than others. If I cannot get a good lease, then I have no problem waiting for pooling as it has its own advantages.
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Thank you M. Barnes. This was helpful. Can you share a little bit about the advantages of pooling.
Pooling in OK generally gets a competitive set of options based upon the highest leasing values offered in the section of interest and the surrounding eight contiguous sections in the last year. I pick the highest royalty.
The time frame is shorter-usually six months to 18 months, but usually a year is common. I have made some nice extra bonus amounts on pooling when they missed their deadline and had to pay me again to get another year time extension.
Pooling does not require an attorney and their fees unless you are trying to do something unusual at the hearing.
I go to pooling if the time frame is short or if the operator of the well(s) will not negotiate a good lease that is more fair to the mineral owner.
Pooling is usually for specific reservoirs. I can pool at one level for one price and then come back in later and pool again at a different reservoir.
This document explains the process. 0_The Pooling Process in Oklahoma.pdf (340.4 KB)
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This is good information. Thanks again for the guidance and education you provide. I’ve learned so much from this site!