Have a lease offer for Kingfisher County, E/2, Sec. 24 16N 9W - Net acres 106.6. Landman, Roger Akeman with Conquest Land Co. will not disclose who he is leasing for. 1st proposal was $500/per acre, 3/16th, 3 year with 2 year option. Have negotiated him to:
1. $1,000/acre, 1/5th, 5 year term or
2. $600/acre, 1/5th, 3 year term with 2 year option at $1,000/acre.
Says has to have long term lease and if refuse option, would have to get approval. What would everyone do at this point? Refuse the option and see what happens? Anyone know any other deals made in this area?
Are you the only mineral owner in the E/2 of Section 24?
No. Don’t know who the others are, but looks like we have 1/3 of 320 acres.
If you dont lease to them and the others do, at some point you may be force pooled. If that happens you will still be able to get the best deal they gave anyone else. If the pooling is approved, and they always are, they will typically have a year to drill. If they dont the pooling expires and your minerals are open and able to be leased again. If they do drill and get a well you will have the royalty that you elect in the pooling. Typically you will have a couple options, for example Option 1: $1000/acre and a 1/5 royalty, Option 2: $500/acre and a 1/4 royalty.
If you decide to lease, however, you will be bound by the terms and length of the lease. If you hold out and wait for the pooling you might be able to strike a better deal, possibly even with a competitor of that original oil company. Then again, they may never drill and you wont get the benefit of the bonus money they are offering now.
I personally would try to negotiate something like $1000/acre for a 1/5 royalty for 3 years and if the wanted a 5 year deal, I'd ask for 1/4 royalty or more bonus money per acre.
I'm not sure what's going on in Kingfisher county these days; might be part of the horizontal woodford play going in Canadian county.
My name is George Senn - I wouldlike info on Conquest Land Co and Roger Akeman. I see they have recent accepted bid in Kingfisher County but I cannot locate the company. i would apprecate your help, Thanks.