Lease expiring and new offer

Our lease in 13 1N1W is expiring on May 11th. I just received a new offer from MK&P, out of Oklahoma City. It is a very good 3-year lease. I’m sending it to Garvin Agee Carlton today for review. Is there any other activity my area?

Likely to be activity. Continental is active in the area with drilling and leasing.

Hi Ms. Barnes. After reading (and finally joining the group here), I see that you are obviously well versed in mineral rights leases, etc. I have been in the process of transferring title in three parcels (I think; legal descriptions below) that I recently inherited from my mom. I’ve sent affadavit of heirship paperwork to Garvin Clerk’s office just this week, and assume this will all be recorded soon.

Otherwise, this is a very much Greek to me, pretty much all of it, so I am trying to get my footing in here. So far, I DO know that Rimrock is the current lessee for one “well” and Daylight Petroleum has a lease on the other two. Beyond that, I have zero clue what these might be worth and whether to hang on to them or entertain selling them. Here’s the legal description and I REALLY appreciate any guidance!

SAMEDAN #16-2, NESW OF SECTION 16, TOWNSHIP 2N, RANGE 2W, Garvin County OK

SAMEDAN 16-1, SWSW OF SECTION 16, TOWNSHIP 2N, RANGE 2W, Garvin County OK

OHN KENT, 1-21-16UWH E2SW4, NW4SW4, E2SW4SW4, NW4SW4SW4 AND SW4NW4

The John Kent horizontal well will probably be holding section 16 as long as there is production, so no new lease unless you have a depth clause on your old one and someone wants to drill something deeper. It has about 2.5 BCF left, so many, many years. Rimrock has left room to drill additional horizontal wells, so I wouldn’t be in a rush to sell unless you really needed to. You would only get partial value on the well you have and not the future value sitting in the ground. The one well cannot drain the rest of the section.

16-2 is inactive. Samedan 1 is also inactive. 16-3 is active, but you may not own it if your acreage is not in its spacing. It is in the NW4.

Your title said “new offer”. Did you get an offer to buy? If so, that might mean that new horizontals are pending.

Forgot to mention that if the Samedan wells are in a waterflood unit, then you may get paid on the wells if other wells in the unit are still active. You acreage will be included even if your wells are “dead”.

Thank you so much for this. No, I have not gotten any offers on any of these (I was being lazy and replied to an earlier post to you).

The two Samedan parcels (the inactive ones you mention) we are still currently receiving monthly royalties from Daylight for. Is it normal to receive royalties for “inactive” parcels?

Also…no idea how to determine if my acreage in 16-1, 16-2 is in the 16-3 spacing.

I can confirm that I spoke to a very nice person at ONE OK, and they handle the gas part of the two Samedan wells. But, crucially, she mentioned that has been no gas activity on our two wells in a long time. However, Daylight HAS been sending payments (presumably for oil and not gas?).

Sorry for the multiple questions here. Really just trying to sort things out. THANK YOU.

Check your statement for Daylight or ONE OK to see what wells it is listing.

Hey, thanks again for your help! I dug up an old statement from ONEOK dated 09/30/2022. It lists the following well:

  • Well Name: SAMEDAN #16-2
  • Meter #: 100755716
  • Contract #: 209000102 and 971700
  • Operator: Daylight Petroleum (assumed, based on current royalty checks)
  • Location: Section 16, Township 2N, Range 2W, Garvin County, OK

I found an even older statement which included Samedan 16-1, but that was from 2019.

Any advice on what (if anything) to do with these two “inactive” leases? The total my mom received in 2024 from Daylight (for Samedan 16-2) was about $1100 (for the entire year).

I assume there is no real market for leases that aren’t producing?

I did speak to a woman at Rimrock, and she said they didn’t have any plans to drill more in the John Kent well that I also have inherited. She said it was definitely still producing well though, and I have a total of 20 acres (approx) within that area.

Those Samedan wells are listed as inactive. Don’t confuse a well with a lease in OK. The lease gives the opportunity to drill a well. The Samedan wells kept the lease alive as long as they were producing. When the John Kent Horizontal well was drilled (before they stopped producing), it continues to keep the lease alive. So just sit back and collect your royalties! Some other company may come back and drill more horizontal wells in the future.

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