Well I called the land company that wanted to lease my mineral interest in section 19 4 north 4west. In their letter they offered $650 bonus and 3/16 royalty. I told him to ask Continental for $750 and 1/4. We will see what they offer. My interest in sections 33 & 35 which Merit pays me some royalty on, may be in line for some Horizontal action. That land is in the Springer Purdy Hart areas. Hopefully good things to come. Tom
Glad it helped, Richard!!
Tom If they give that to you before they file for a pooling they will have to offer that to everyone and they donât want to do that . Hope you can get it . I had a cousin get $1450 & 3/16th in April 2012 for interest in 30-4n-4w . But like 36-4n-5w it was from a 3rd party .
Tom: How many acres do you have? I have yet to hear of a major offering cash bonus with 1/4, but there have been some hedge fund types offering bonus with 1/4.
Chris,
I got the same offer in 4-1N-3W but declined it.
Rick, same here, we did not accept the offer but welcomed the precedent of cash and 1/4 from a major operator.
My biggest stumbling block with these leases is that they will not release formations above that they do not produce promptly or limit the lease to the formations they are targeting; as I have mentioned previously, given that they are drilling to the deepest formations, a traditional depth clause is of little value, rather we need to turn it on its head and release formations above. But CLR is very intent on holding all rights â you see this in their pooling applications, the OCC tells me it is a raging debate. My impression is that this is less of an issue with NFX.
Tom Ed Moore made the simple statement that signing a these leases is a lot like selling your minerals; while we hope the lease produces more income over time, you will never sign another lease for the same mineral interest, it will likely be HBP for the rest of our lives so the traditional lease bonus income is over once you sign a conventional lease for these deep wells.
And, one last thought, for those who want to participate with some of their interest and wait for pooling, if they pool all depths, you are on the hook to participate in any shallower wells to maintain your right to participate in future deep wells.
Bob, I recently received an offer from CLR (via Jackfork) for 7-1N-3W that is $250 @ 1/4; it was the first offer from a major operator I had seen with some cash and a 1/4 and it is obviously a small cash amount but I like the trend!
Being Held to a 1/4 RI lease would not be that bad, but they may have thought the same thing with the 1/8 leases in the 60s.
Also terms change and I would also might want the right to participate in future exploration of the other formations, even if I do choose to lease this zone now.
Chris,
I agree with your comments.
We were force pooled in a nearby county in the Woodford Shale. We were given the option on the first well to participate, and we chose to do so. Then, infill drilling started, and they drilled 8 more Woodford wells. We were given the option to participate, and we also elected to do that. Then, they decided to explore a shallow formation, and thankfully we elected NOT to participate, as it turned out to not be a good well. I have assumed that any more future wells would also allow me the option to participate, but that assumption could be wrong.
In another county, the original pooling order was for a SINGLE formation that was fairly shallowâŚimagine that. (To me, thatâs the ideal way that it should work.) Later on, they became interested in some deeper formations, and they of course had to force pool us again. Both times, big bonus money was offered. Thumbs up for force pooling here.
Thereâs clearly nothing fair about what some of these companies get away with when they get a whole series of stacked formations for the price of one.
Newfield is getting away with murder in Canadian and Kingfisher county with their announced STACK discovery. Almost all of the pooling orders and leases are limited to a maximum of 1/5 royalty, with 1/4 almost never being an option. The ancient 1/8 royalty is the initial option in almost all pooling orders in the area. There is clearly nothing fair about this, and whatever rules or authorities that allow this are clearly not respecting the rights of the mineral owners.
Cambria is offering $1,250 an acre for the mineral rights to my 9 net mineral acres. They are in Garvin County section 15-2n-1w. Thinking of selling, I donât expect to see much activity in my area. What do you think?
Worth more? Thanks for your previous help on here.
Gregory
Thanks !
Karla, Yes, they can stay shut in and claim HBP. If your lease doesnât specifically give a time limit on the shut in time frame, you are held HBP. Of course, they better be paying the shut-in royalty payment on time or they forfeit. If your lease does have a shut-in royalty time frame, then you can demand a quitclaim of the lease. I inherited a bunch from my mom with no time frames on them. Now, I put two year limit.
CHP has well in the Purdy area that was first shut in for safety reasons and now the say it is shut in for mainitance reasons. This well has not produced for almost 2 years. When my mom deeded it to me they sent a new division orders out for me to sign. Just wondering if anyone has any thoughts about what they think their plan may be. If it hasnât produced for over 2 years can they still HBP?
Shut-in royalty is usually $1/ac once a year. Check the date on the lease. They have to pay by the due date.
Regular royalties are usually paid monthly but more recently due to handling costs and postage, companies can hold funds until they equal $25 or $100 (usually stated on the Division Order).
Martha/Karla â Is it not the case that they have to shut in for a real reason rather than to just hold it by production? And, doesnât the shut in language usually relate to gas only?
Guess I had not realized that an operator could actually chose to hold a lease indefinitely through the payment of a shut-in fee without there being a legit reason for the shut in.
Shut-in is for gas only, but you have to remember they are classifying most of these recent wells as gas. So who knows for sure.
Yes it is âsupposedâ to be for a valid reason.
Also in Oklahoma failure to pay the shut-in fee âmayâ not invalidate the lease, but simply create a debt. (unlike Texas and some other states)
Iâm not sure there are hard answer on it. Lotâs of opinions by attorneys depending on what side of the fence they are on.
I looked at the lease and Chesapeake has the whole section 7 3N3W,all formations gas, does that also mean oil as well? Only part of this section is in the Purdy sand unit and Merit has the shallow sand. So confusing. Good to know that it may be legit. Is this area considered the sweet spot?
Karla,
The wells in 7-3N-3W appear to be still producing.
Mike, do they pay monthly? We have not received any money for over a year. When my mom was alive she would a check for 30.00 every now and then. I will check the lease but I donât think it said anything about a shut in royalty time frame.
Rick,That is what is says, but Mary Sue has been shut in since October and I called today and they said it was shutin for maintenance. In October they said it was for safety reasons. Has not been producing much of anything for last 2 years if you check the production.