Lease based on perforated interval lengh

I got a lease from a company that is for Ovintiv, (never heard of them ) to drill horizontal test the Springer formation. NE/4 of Sec 33-3N-4N & extended through and into Section 22 as follows:

Section 22-3N-4N - 5,000 ft (50% of the completed interval length Section 27-37-4W -5,000 ft (50% of the completed interval length

The terminus (bottom hole location) will be in the NW/4 of Section 22-3N-4W. The total length of the completed interval of the proposed well is approx. 10,000. feet. This well is to be drilled on 1,280 acre unit basis consisting of sections 22-3N-4N & Section 27-37-4W Under Senate bill No 867 made effective Aug 27 2017 Known as OK jobs act 2017… They are suggesting option 1 only a lease of 1100 & 1/8 revenue option 2 a lease of 1000 & 1.25 revenue option 3 a lease of 800 & 1/5 revenue

Not real sure these are great options The leasing Company is Hal C Smith & Assoc Norman Any advice from this group, thanks in advance,

Ovintiv is a large operator and formerly known as Encana (a Canadian company).

For option 2, was that meant to be 3/16th? Either way, I’d want to lock in the highest royalty possible with the best gas processing and other terms possible (short window to drill, etc) for a pending horizontal well on my property.

Am I following correctly that they’re wanting to drill a multiunit horizontal to test the Springer here? If so, are you in the Sharon Mae wells (which they operate)? It’d be the same idea as those wells (for better or worst), except those are Woodford. Do you own in Sec 22 or 27? image

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Ovintiv is the new name for Encana which bought Newfield. These guys know what they are doing. Go back and ask for the 1/5th and 1/4 options. The Springer can be better than the the Woodford since it has more oil in it. Were you pooled last time? Most companies are hiring land firms these days. Hal Smith has been around a long time. You may get some other offers from third party companies that may give you a better lease offer than Ovintiv. I have seen their standard lease and it is not in the mineral owner’s favor. If I cannot get a good lease with better terms and clauses through a third party, then If it were me, I would wait for pooling and take the highest royalty. Toddco was offering leases for 1/4th in late 2020.

Two companies want to drill these sections, so you may get some other offers.


Hello M_Barnes. Thank you for your continual sharing of valuable information.

I am writing because I own rights to Section 22, 3N 4W mentioned in the original email from Teresa. What does “The terminus (bottom hole location)” mean? Do you have any insight as to how this would affect us?

Today, the 22nd of July, I found a receipt from USPS indicating I have a certified mail at post office from Hal Smith, same name as in Teresa’s email. Hoping to get that tomorrow.

Also, I have a document that was filed to OCC Dec 22, 2020 from Ovintiv, Sections 22 and 27, 3N 4W. There has been no update since. Would they be related?

Thanks much, Regards, skp

The proposed well will have a surface location in Section 33. Then traverse across Section 27 & 22 with the bottom hole in the NW/4 NW/4 of Section 22.

There has yet to be a hearing on the Ovintiv 1280 acre spacing that you are referring to in the 12/22/20 filing.

The bottom hole location is at the end of the well. The operator saves a bit of room at the end of the hole to put some machinery in, so the perforations will not go all the way to the end of the hole. The documents from the OCC will explain where the surface location will be and the bottom hole location. They will have an exhibit that shows them. The “as drilled” may be slightly different due to what happens during drilling. The Ovintiv well is planned for multiple sections as named. Here is an example of one of the earlier wells in 27 & 22.