Sorry about the confusion. What I’m trying to say is can we sell the mineral rights during the 3year lease? Or is that binding until the 3year period is over?
I see what you are saying. Yes, you may sell your minerals anytime, leased or not. Whoever buys your minerals will be subject to the lease you signed.
Carl:
Just to be clear, if you are already leased to Cimarex, then the pooling order is not applicable to you; you do not have any options to re-lease or to participate in the pooliing order in any way. They tend to send those pooling orders out to a larger crowd sometimes just to protect themselves. Your property is about 4 miles east of the western edge of the county, and that general location is seeing lower leasing rates than some other areas. However, there is certainly a lot of irecent nterest by Continental and Cimarex in the general area. I would say $4000 is a typical price for unsolicited offers in your area, though I personally would not be tempted to sell in light of possible future drilling.
Many different companies lease up the minerals in a section, and eventually one of them takes the lead and drills the well and becomes the operator. The other companies will participate with their share of leases. That’s the way it works, and there is no need to contact Cimarex. The necessary filings and paperwork are being done, but there is no certainty yet of drilling - especially in the face of collapsing oil prices. Sorry, but your last statement makes no sense, since a lease and a deed are totally separate things (matching purchase price agreement).
We have mineral rights in Blaine County, Section 23, 15N, 13W. We were approached by Cimarex to lease the land for $750/acre plus 3/16 royalty for a three year lease which we signed in March of this year. We have since been approached by several unsolicited companies to purchase our land from $2000-$4,000/acre. We have also received a notice from Bearcat Land, Inc. about a hearing to drill and perhaps a “pooling.” They offered us a paltry $650/acre lease with 3/16 or to pay a working interest in the land of approximately 6 million (we don’t have any idea what our share would be) Is this a scare tactic by Bearcat (and Continental whom they represent)? We already have a 3year lease agreement with Cimarex. What are our options? How can we find out how valuable the land is and what a fair price is to re-lease or sell? We are brand new to anything of this kind.
Is anyone leasing or buying minerals in 18N-13W.
If I were you, I would not sell right now (or at least don’t sell everything). This downturn is one of many cyclical time frames that commonly occur in the oil patch. During low prices, there are lots of companies out there offering to buy. In my experience (35 year in the oil patch as a geologist), these offers are low to actual value of the minerals. They take on the risk of either boom or bust, so they factor that in. But they aren’t going to offer unless they think they can make a profit.
Parts of Blaine are better than others which will be reflected in the price. Horizontal drilling at several levels is just moving into Blaine, so there is more risk geologically now than there will be later as more is known. This is normal.
Take into account that offers may sound good, but sometimes when the fine print is read, they will take off for whatever bonus you have already been paid if you have leased. Not always, but watch out for that.
On the time line, the leases are good for three years (don’t take the two year option). They have to start drilling within that time frame or they have to let the lease go or lease again. Drilling usually starts before then if the play is active. If they cannot lease everyone in a section and drilling is imminent, they will force pool everyone who is not leased. Force pooling is usually a good thing in my opinion (for another post).
Force pooling gives a 180 or 365 day clock to drill. Drilling long multi-unit horizontal wells takes about three months-give or take. Then they either complete immediately or wait to complete when they have a whole bunch of wells ready to finish and do them all at once to save on costs (or wait for better prices). You will receive a Division Order about five or six months after the completion. They must pay you by six months from first sales month or they will owe you 12% interest if your title is clear or 6% interest if there is a problem they have to solve.
Jim Houston, My brother and I recently leased in 18-13.
Any info on Section 14 16N 11W…
Folks want to buy the mineral rights and it seems like something must be getting ready to happen.
Any info would be greatly appreciated.
David, Continental, Felix and Cimarex are in the area leasing…
Trent, Follow the rules. Plus a written guarantee sounds impossible to back. Are you going to personally back this guarantee if some one sells for more by giving them the difference in cash?
Dennis, your mother will need to lease her interest, not necessarily to Continental, but who ever is leasing in the area. I also would not settle for the initial offer, you may even ask Cimarex and Felix who are actively leasing in the area if they are interested in making a lease offer.
If you do not lease then you will eventually be forced pooled.
Continental is proposing drilling Zella 1-9-4XH in sections 4 & 9 of 16N, 11W. My mother and relation already have mineral rights. She definitely won’t “participate in drilling the proposed” well as she has no up-front money. Leasing or assigning her interest has three choices: $1750/acre with 1/8th royalty: 1500/acre with 3/16th royalty: 1000/acre with 1/5 royalty. If she already has mineral rights, need she also lease/assign her interest to Continental? Thank you in advance.
Make sure she gets a really good lease if she does decide to lease. The one that Continental will send is not where you want to end up. Many parts are negotiable. Friend me if you want me to walk you through the good parts and the fixable parts. Force pooling is also a nice option and nothing to be afraid of. I quite prefer it in some circumstances.
http://seekingalpha.com/article/3496666-emerging-meramec-stack-play…
really good article on the STACK play in Kingfisher, Blaine and Canadian Cos
Better to lease than sell right now depending upon the area. Lots is about to happen…
If it were me, I would not sell… but do what you think is best for your situation.
I have the acreage in Blaine Co Sec. 25 Twn 17No Sec. 25 and my latest offer is $5700. per acre for the full 80 acres or I said after hearing your discussions to only sell half. This seems like a fair price. Would like to hear some comment.
Jim and JW,
Thank you both for your help. I can always count on someone on the forum with answers.
Where could I go to find oil production figures for a specific well. Any help is very much appreciated.