JMA offered The current options are $1750/ac, 1/8 or $1500/ac, 3/16 or $1250/ac, 1/5 or No Cash, 1/4 or participate in the well costs. I do NOT want to participate. It looks like maybe the 3/16 offer is the best? I only have until next week before the pool. Any help would be appriciated.
At this point you have very little time in which to negotiate a good lease. The bonus amounts are not the most important thing. The lease clauses or the pooling terms. Most of us would want either the 1/5th lease for the $1250 or the 1/4th lease at no bonus. Decades of royalties at a higher percentage for one or more wells usually far outweighs a one time bonus-especially on horizontal wells. If you have an attorney and they will help you get a good lease in the next three weeks, then try that. If hiring an attorney is not an option, then wait for the pooing and answer by certified mail within the 20 day time limit. I usually try to get them answered by the 10th day. Keep a copy of your letter. If you need a template letter, I can share one.
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Depending on the section, township, range and how much acreage you own, there may be other companies that would offer you better terms and a really good lease form/exhibit…maybe multiple companies. Once you are to this point in the process, being that now companies can see that a well is about to be drilled, often times you can get better offers than the pooling prices being offered. Not always, but most of the time.
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I got the pooling notice by certified mail today. If you’d share your template, I would be truly thankful! I truly appreciate your advice as well. I got another lease today from Upland Operating for the exact same TSR. Section 21 Township 11 North, Range 23 West and containing 160.00 acres, more or less. They are offering a cash bonus of $1750 at 1/8; 1500 @ 3/16 $1250 @ 1/5 and $0.00 at 1/4. Using the reasoning above, it sounds best to take 1/4 at no bonus. I also got this offer in the mail today so, how can JMA be pooling when I’m getting this offer today?
Also, Upland is looking to drill in S28, 11N 23W
(The Storm Trooper 21/28 1H)
Quite a few companies may be trying to lease right before the pooling and a well can have several working interest owners. A last minute flurry is common.
Here is a copy of a pooling letter reply template. Replace the red text with the specifics of the pooling once the order comes. Turn them black. Mail by certified mail with your W-9 so they can pay you quickly.
0_Force Pool template letter.docx (13.4 KB)