Hello - I am getting some offers on Sec 5 -3S -1E in Carter Co. One of the offers is a bonus at a 1/4 royalty which seems very attractive since typically there is no bonus to get a 1/4 RI. Anyone else getting similar offers or have any other information?
I could sure use some baseline lease rates for Carter County. Some guys have been calling but I don’t wanna do anything ‘flying blind’.
You can always wait for a pooling. Since they are offering a 1/4 royalty you should at least receive that. A pooling may provide some bonus money also. At pooling you can shop your minerals for better OGL terms to companies interested in participating in the drilling.
The bonus amounts will be tied to the reservoir location, so you need to be more specific about a township, range and section. Bonus amounts are not public. The closest you can get are pooling orders within the last year in the eight contiguous sections.
The clauses in the lease are much more important than the bonus amounts as they can decrease your royalties by imposing post production costs and other items. Getting good legal advice is wise. Draft leases are generally not in the mineral owner’s favor and require professional edits.
Thanks all for the info. The offer I received was $1000 / acre for 1/4 royalty. I am waiting to receive their sample lease. So if I wait and go to pooling, how do I make my election and attempt to receive the best terms under a 1/4 royalty?
0_The Pooling Process in Oklahoma.pdf (340.4 KB) If you go to pooling, you will get an order that gives several bonus/royalty pairs. You must select your option within 20 calendar days and send back (preferably by certified mail return receipt) on time or you will be assigned the lowest royalty option.
Thanks for the very helpful info. So I did receive a copy of the lease and right off the bat I am having a problem with … “In consideration of the premises the said Lessee covenants and agrees: to deliver to the credit of Lessor, in the pipeline to which it may connect its wells, the 1/4 part of all oil … less a proportionate deduction for any transportation or other fees or taxes charged to the Lessee; to pay Lessor for gas (including casing head gas and coal bed methane gas) of whatsoever nature or kind (with all of its constituents) produced and sold, or used off the leased premises, or used in the manufacture of products therefrom, 1/4 of the gross proceeds received from any party (whether or not an affiliate of Lessee) for the gas sold, used off the premises, or in the manufacture of products therefrom, less a proportionate part, of any production, severance and other excise taxes and costs and/or fees incurred by Lessee in making marketable Lessor’s share of gas, and/or in gathering, transporting, processing, compressing or otherwise marketing Lessor’s share of gas, but in no event more than 1/4 of the net amount received by the Lessee from any such party.”
So essentially they can put in any costs they want against the royalty under “gathering, processing, marketing, etc” I am contacting an attorney for assistance but is there anything online that shows a strong sample OGL in favor of the mineral owner?
A good oil & gas attorney will be able to help you with the proper wording for no post production costs. There are some other clauses that you need to watch out for to strike or amend and some that need to be added to further protect you. You can read examples of leases on www.okcountyrecords.com-some are good and some not so much.