Good Morning
I’m looking for experience in this area. Between 2 cousin’s, a niece, nephew and myself together we hold 200 nma in 12-10N-10W and is currently leased with Classic Resources (expiring in June 2026). My niece and Nephew received letter from Duncan (see attached)regarding a proposed drilling of a horizontal well running through 12,13,and 24 of 10N-10W. My questions
- If we are in a lease why would they indicate that it may not be leased and offer lease options 2,3,and 4 ?
- what exactly does option 1 mean ?
- If our lease expires in June and drilling and or production hasn’t happened then what ?
Note: We do have an attorney in Anadarko that handled
the overseeing of the lease
What did i do to make this post appear the way it does ?
This is a common “courtesy” letter usually sent out before pooling. If you want to see it larger, double tap the document and it will open in a bigger format. Hit the X in the upper right to make it smaller again.
Option 1 is for participating as a Working interest owner. Not for the novice as one would have to have deep pockets for drilling and completion costs, liability insurance, Production costs for decades, good oil and gas attorney and a good oil and gas accountant.
The other options are for the proposed lease amounts and usually are very close to the pooling amounts to come.
You can choose to lease or you can choose to be pooled. If you choose to lease, you need to get an attorney immediately to review any draft lease. They are not generally in the mineral owners’ favor and need significant edits. Most savvy mineral owner would take the highest royalty because the highest royalty over many decades of production of a well or subsequent infill wells will far outweigh a one time higher bonus payment for the lower royalty. I prefer to get a high quality lease, but if I cannot, then pooling is fine. NEVER turn over a signed lease without getting paid the same day. Your attorney can hold the lease until they pay. You do not want a filed lease without a payment in your bank.
I do not sign these letters as I do not want my signature on any document before I have reviewed and agreed to the terms of the lease or the pooling. It is common to send out a letter like this to all mineral owners who are unleased or whose lease will expire before the well will begin drilling.
Duncan just filed a pooling order in the sections nearby for similar terms within about $50. They have filed for spacing of the Deese reservoir immediately to the east 10N-9W in Oct 2025. Since no cases are filed yet for sections 24, 13, 12 I doubt that any well will be spud by June when your lease expires. They will do the one to the east first since it is farther along in the queue. BCE-MACH is also in the area with a long well already permitted for 30-31-11N-9W and into 6-10N-9W just north of the Duncan cases.
Note: If you lease, be sure and get a commencement of drilling clause in the new lease which requires a rig onsite capable to drilling to depth and drilling “to the right”. Actual spud, not a garden hose and a wheelbarrow on site as “commenced”. You also want to make sure that you get a no post production cost lease- very important in OK.
Check your original lease to see if it has a depth clause. Make sure the new one has one.
Thank you so much, this can be very intimidating for a south Texas fella.
Be sure the attorney is licensed in OK for the leasing as TX leasing is completely different from OK!
Yes the firm we used for the existing lease is in Anadarko.