I have received an option letter from Triad Energy for leasing a 3 year option on my Garvin County OK , 5 acres sec 21 1n 2w $350 per acre for 3/16 and $250 per acre for 1/5. Anyone know if this is a fair price? It seems they (Triad) are the only ones active in that area. Any information? I have sold and leased to Continental in sec 23 1n 2w.
Bonus amounts are not public from leases, but the nearby pooling can be a guide. Generally, only the pooling from contiguous sections within the last year are the best to look at. The farther away, the less the judge looks at them. Also, the reservoir makes a difference. You need to ask Triad what zone they are planning to drill.
Poolings in the last year are from nearby, but not contiguous sections: Continental sec 23 & 24 $1215 3/16ths, $1035 1/5, $360 1/4.
Triad had poolings for Sec 4 shallow zones back in 2018 for $250 3/16ths, $150 1/5th, $0 for 1/4. So you can see the difference in perceived value.
Thank you for replying. I’m not familiar with a asking about a zone reference. Can you give me some help on this?
The “zone” is the intended reservoir. If you lease, then can lease to the center of the earth or you can lease only down to a certain reservoir and leave the deeper reservoirs open. That is what the pooling does. It only holds the reservoir(s) mentioned in the order.
If companies are going for deep Woodford reservoir with horizontal wells, then the leasing and pooling amounts will be much higher than the leasing and pooling amounts for shallow vertical wells.
The terms and clauses of the lease are so much more important than the bonus amounts. The draft lease that they will give to you is going to need negotiation to become more in your favor. They start out all in the company favor.
I am currently going over the extremely “fine print” of the lease they have sent. Now I have an idea of what to ask and why. You have been very helpful and I will proceed with caution. My dad was a landman in the area years ago and bought the leases. He has since passed away so his advice is not available. This area has been stagnant for me since 2011. Triad seems to be the only one working there presently so my options for other offers are likely limited . Thanks again!