Garvin County 28-2N-2W Lease


#1

From 2015-2018 I held an oil and gas lease through Continental Resources as an heir through my father. Lowry Land was the one dealing with the lease at that time. I believe lease was actually with Continental Resources. There wasn’t drilling taking place at this time just exploration. Somewhere Rimrock resources was tied into this but was not showing interest at the time.

Lowry Land told me that I owned .011688 net acres from 2015-2018. Now I am to sign a new lease with Rimrock Resources, and the Landman told me I only owned .0098 net acres?

Landman at Rimrock said she had a title opinion verified by a title attorney, she said without more info regarding the number given to me by Lowry Land there isn’t much she can do about it.

Is there anything I can do that would help me in this matter? I find the reduction in net acres over the course of 3 years odd. I don’t have a large share only 3/16, but I want to make sure the information I get is consistent, as I do not understand the discrepancy on the new lease.

Thanks a Bunch


#2

There was no reduction in your net acres per se–you own what you own. The issue is who is likely to be correct, the attorney preparing the title opinion for Rimrock, or the landman who prepared an Ownership Report for Lowry.

Generally the attorney is more likely to be correct if she/he had all the same information the landman had.

Rimrock just filed a new Force Pooling application on Section 28, and if you are unleased it is likely you have or will receive notice of the hearing.

For perspective, if the larger number is correct and you elect to receive 3/16ths royalty, you will be paid approximately $3.40 (less taxes) per $1,000,000 of production attributed to Section 28. So if they make a phenomenal well that generates $100,000,000 for Section 28, over time you will receive $342.00, less taxes.My business advice is take all the free legal advice you can get, but consider the risk/reward aspect of hiring an attorney.


#3

BTW, if you want to see the formula, it is:

3/16 x 0.011688/640 on Section 28 production.

Since the well is a multiunit horizontal well, the well production will be divided between Section 28 (anticipated 64%) and Section 33 (anticipated 36%). You should have received paperwork on this split from the Oklahoma Corporation Commission.


#4

Thank you for the advice Frank. I do appreciate that. Have a good day.


#5

Correction to the formula.

net acres/actual spacing acres x royalty x % perforations in your section. A one section well has the last term as zero, but a multi section well will have a percentage.

The leasing title opinion may not be as rigorous as the final Division Order title opinion as that is a more serious contract involving the royalties.
I have found that if I ask nicely, I can usually get a copy of the paragraph of the title opinion that pertains to my acres. (they won’t share the whole thing). If I have documentation through old title opinions, wills, deeds, probates, etc. that proves my case, I have been able to convince them of a different amount of acres.


#6

Thank you, All I had was a letter written by Lowry land stating my net mineral acres to be more than what rimrock said. The nma is all in decimals. I have not seen any percentages yet. I guess because all i’ve seen so far is well proposal offer, and a previous lease for exploration. I sent document about nma being more now i wait. Its amazing how difficult it is for one to get information and what to do next. I am grateful though for information i received here because this is complex to me. Thanks