In June I received a written offer from a company to lease some of my minerals in western Oklahoma. The offer seemed low to me, so I called the company to try to negotiate a better deal. The landman could not have been nicer, but she absolutely refused to budge. She said that Corporation Commission rules would not let her offer me something that was not offered to everyone. She seemed sincere and truthful, but this is contrary to my experience. Other landmen I have dealt with have always been perfectly willing to negotiate. I expect that the company will pool me, but I can’t see how they will be able to say that they made a bona fide effort to negotiate with the mineral owners.
Has anyone else dealt with this problem? I’m not an expert at Commission proceedings, but this confuses me.
She is probably refusing to budge because her mandate to lease has certain terms by her employer, not the Corporation Commission. If her employer is working for the operator, then they may only want to report to the commission what they are offering. There are many, many agents leasing in western OK, so you may find that you get multiple offers. Third party groups often want a piece of the working interest of a well and are more willing to negotiate. You may be able to get more favorable terms from them. The clauses in the lease are the most important, so getting a good attorney to work with you can be an excellent investment in not losing royalties due to unfavorable clauses.
Are you under any OCC filings? Have you recieved other offers since June? The market speaks for itself, companies wont budge on their numbers unless its a large mineral acre owner no matter what we think they are worth.
The landman uses the OCC because regulations state they (the operator) will have to match the lease bonus for any mineral interest that is pooled beyond the lease negotiations stage. I would look for a third party lease; ie not the operator or someone working for the operator who applies for the pooling order. A third party can negotiate beyond the parameters set by the operator because they are not tied to the terms of the pooling order. In these circumstances, I just pick up the phone and start calling leading agents/ landman. The worst they can say is no, but is most circumstances you may get a better royalty, terms, and bonus. And on the other hand, if you don’t get a lease by a third party, you will be pooled at the same terms you were offered (although I prefer to avoid that scenario so I can use my own lease). Time is of the essence if they have a viable drilling schedule.
Lauren Porter, thanks for your insight on the regulations. I really would never have thought to reach out to a third party, but I suppose I have nothing to lose.
I am having a similar experience in that the landman won’t budge in our negotiations for my small mineral holdings in T13N R17W in Custer County, OK. The offer is decent at $300/ac and 25% royalty, but the problem I’m having is negotiating a cost-free royalty and a 24-month “Cumulative” shut-in. I’m sure that forced pooling is imminent. I never thought to approach third parties either. Great suggestion.
Third parties are much more likely to give the cost free clauses and the more favorable shut in clauses. Pooling also has its advantages.
Several agents that are leasing in that township are Acme Investments, Anevay Resources, Anthem Arapaho, Belford Royalty, Big Cedar Resources, Bridgeport Resources, Cobalt Natural Resources, Legacy Mineral Group, Magnolia Natural Resources, Mewbourne Oil, Mountain Front, Petroven, Red Hawk Resources, Redwood Energy, Sand Creek, Smokey Mountain, Summit O&G, United Land, Winding River Energy and more. So you may have quite a few as other options.