Grady County, Oklahoma

General Mineral Rights Discussion
1

I received an offer of 2000.00 an ace for minerals located in Sec 17, 3N, 6W, is this a fair offer?

2

This is for a three-year term, 3/16th royalty lease.

3

Judy,

I find that the bonus per acre is generous. Extremely more important is that you:

  1. Only deal directly with SUNDOWN ENERGY if possible. If Sundown isn't behind the lease effort, contact them for a proposal. Sundown has earned the preferential right in my opinion.
  2. Get the bonus money Lump sum in the bank before you deliver a signed lease
  3. take production and sale lease with no right of deductions
  4. Have a clear right to demand and receive all non-producing formations back after a reasonable time.
  5. Limit non directionally drilled wells to governmental quarter section producing units without your prior approval.

Gary L Hutchinson

4

Thank you. One does wonder if you might be better off to be forced pooled; do you have any thoughts on this?

5

I don't see any geologic reason for force pooling your section or its surrounds in the near term. Geologic potential not land position is the primary reason to incur the expense of pooling etc.

Personally, and after a cursory look at what is going on, Sundown seeps to have the geology figured out. Next door to the east, it has drilled and completed two wells and has another new permit. If you deal with others that will sit on your lease for a quick flip based on Sundown's success, you could be denied some good royalty. So, best to protect your upside by negotiating a good lease in the first place and do it with the company that knows the geologic potential best.

Gary Hutchinson

6

Thank you for your input.

7

I think I might have some interest in 15 4N 5W and 22 4N 5W.

Does anyone have any information in these areas?

We are looking for a land man to help us.