I have recently received an offer to lease minerals in Custer County OK on behalf of Chesapeake. The offer is for 500 per net mineral acre, 3/16ths royalty and a 3 year term.
I'm wondering if this is a good offer, or how the offer can be negotiated. I am fairly ignorant regarding this process.
Try Chris Brummett at Sunwest Energy iin OKC 405-420-6840
Thank you, I will give him a call.
Bill Frothinger said:
Try Chris Brummett at Sunwest Energy iin OKC 405-420-6840
Depends on township and range? Offers have been good in the SE and the west parts of the county but South central hasn’t been so good. I got pooled at $350 and 3/16ths, But mine was with the cheapskate company called Unit Corporation, Chesapeake offers are better than most, not all but most. They may negotiate depending on how many acres you have, if you have marketable title and if your in the right area. Some parts of the county bonuses were over $1000 per
Joe,
I'm Section 24 13N 18W. I have 10 acres and my brother has 10.
Mineral Joe said:
Depends on township and range? Offers have been good in the SE and the west parts of the county but South central hasn't been so good. I got pooled at $350 and 3/16ths, But mine was with the cheapskate company called Unit Corporation, Chesapeake offers are better than most, not all but most. They may negotiate depending on how many acres you have, if you have marketable title and if your in the right area. Some parts of the county bonuses were over $1000 per
Mine that was pooled at $350 and 3/16ths is just a 5 miles South of yours.
I see, thank you for the information. How long ago, if you don't mind my asking?
Also, how do you find out what is going on around you? As I said I'm totally ignorant about this process. For example, you said that in other parts of the county the bonuses were $1000. per acre.
Mineral Joe said:
Mine that was pooled at $350 and 3/16ths is just a 5 miles South of yours.
I live pretty close, I know a lot of people in the area and I own minerals all around there. I buy mineral rights in Oklahoma, North Dakota, Colorado, Wyoming and other states so I try to keep up on activity, pricing, etc. but since I live in Oklahoma I hear about a lot more here.
I think you need more offers, just so you can say you have them. Most drillers don’t want you to lease to someone else who will participate in the well. The profit to be had on your brothers and your acres will be lost to Chesapeake then. Initial lease offers are rarely the highest they are willing to pay. I would want a higher royalty because if they drill they are physically removing property for sale and once it’s gone, it’s gone. Research on the drilling in your area. The more you know, the better. You might also study on clauses that protect the mineral owners rights to be included in the lease. The lease that you will be presented with will almost certainly favor the lesee to the maximum extent. On this forum, Buddy Cotten, [ to name only one ] has mentioned a few things that could be included in the lease that could be extremely beneficial to you. You are on the right path , asking questions. Wish I were as smart in the beginning. RWK
There you go, RWK has given you a lot of things that can be done to perhaps change the outcome to your benefit, now if you only knew how to go about following and implement such suggestions you’d be all the better. By the way, in Oklahoma they will force pool you in a heart beat if negotiations can not bring a settlement of terms which will almost always be what they want to offer and no more, in most cases anyway or your tract interest is very much neeeded. You can use the use the OCC web site to look at pooling orders to get an idea of terms in the area, it’s under the case processing web application. OCC is Oklahoma corporation commission. They are about a worthless state agency and their new web data system is also worthless, but the new document search program is a decent addition.
I’m glad you know a more about Ok., Mineral Joe. I admit I don’t have a clue about finding information in Ok. so my information was general. I do think Ms. Benson needs to consider what may go into a lease before coming to terms. Things can move amazingly fast when the lesee wants it to. As to force pooling; I havent heard of anywhere where an operator was reticent about forced pooling. I have even heard that in N.D. operators petition for forced pooling orders even when they think they have100% of the interests accounted for, leased and participating, just to be sure they have all the bases covered. I would hope that Ok. wouldn’t grant a forced pooling order before drilling was imminent, and if they did you would still be free to negotiate a lease with someone before operations began in earnest. Perhaps someone with specific knowledge of Ok. pooling practices could chime in. I have to admit that though I have no minerals in Ok. I am now curious. RWK
I certainly agree that everything one can learn and apply will benefit them so any direction is useful. I have seen pooling orders that went nowhere afterward, especially a few years ago during the implosion. I tried to lease some of mine recently and they wouldn't stating I was being pooled and could wait on the order. They have too many of them in their back pocket here I believe. The way things are split here with oil going thru the tax commission and gas with the corporation commission they are all screwed up here and no one knows what the other one knows or is doing .
Okay, so here I go with what is probably another very simplistic question. Should I call, for example, Cimarex, Devon etc. and just say that I've received a lease offer for X and see if they want to make an offer?
Again, I have to beg for your tolerance. Thanks for all your input.
Ms Benson; I would contact them and ask for a competetive offer. I would also inform whomever contacted you on Chesapeake’s behalf that you are seeking competetive offers.
Courtney Benson said:
Okay, so here I go with what is probably another very simplistic question. Should I call, for example, Cimarex, Devon etc. and just say that I've received a lease offer for X and see if they want to make an offer?
Again, I have to beg for your tolerance. Thanks for all your input.
It's a good start. Shoot for .275 royalty, and $1000.00 an acre, that is being paid in Revves county texas. Also get informed, contact your neighbors and see if you guys can team up, We did that in Fort Worth, and Cheasepeke paid $15,000 per acre and .275 royalty, for narural gas. I saw article in Star-telegram that they oil cos, were paying up to $10,000 per acre, in west trxas, long run you want bigger royalty %. On 7net minerial acres I have in Parker county, I'm getting $400 a month, now in its second year of production off two wells.
Go slow, get informed on your area, watch out the snake oil salesman, Land men, don't work in your best interests, but those of the company they work for. If your acreage is significant, hire a attorney, I have been collecting royalty's from wells that have been pumping since 1923, do you want the most you can get?
Sincerely,
Chris
Is that 500 per month? Thanks.
Hey, I'll lease mine for 27.5% any day.
Courtney, I just got a lease offer for some of mine in 12N-18W for $500 / 3/16ths / 3yr. They told me is was the most they have ever offered in the county, I checked and the same company (not Chesapeake) did a pooling order recently right by mine and 3 miles straight South of yours at $900 and a 3/16ths.
good to know, thank you
Mineral Joe said:
Hey, I'll lease mine for 27.5% any day.
Courtney, I just got a lease offer for some of mine in 12N-18W for $500 / 3/16ths / 3yr. They told me is was the most they have ever offered in the county, I checked and the same company (not Chesapeake) did a pooling order recently right by mine and 3 miles straight South of yours at $900 and a 3/16ths.
Sweet!!!! I think I wish I was in Revves county.
Thanks for the input!!!
Chris Wilson said:
It's a good start. Shoot for .275 royalty, and $1000.00 an acre, that is being paid in Revves county texas. Also get informed, contact your neighbors and see if you guys can team up, We did that in Fort Worth, and Cheasepeke paid $15,000 per acre and .275 royalty, for narural gas. I saw article in Star-telegram that they oil cos, were paying up to $10,000 per acre, in west trxas, long run you want bigger royalty %. On 7net minerial acres I have in Parker county, I'm getting $400 a month, now in its second year of production off two wells.
Go slow, get informed on your area, watch out the snake oil salesman, Land men, don't work in your best interests, but those of the company they work for. If your acreage is significant, hire a attorney, I have been collecting royalty's from wells that have been pumping since 1923, do you want the most you can get?
Sincerely,
Chris