We’ve just received a lease offer for $1000 a month with 1/8 royalty; or $750 with 3/16. Would love any advice, thx!
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Please give the state and county. I assuming OK, but this description may not be unique.
Assume you mean $1000 per acre, not $1000 per month.
I’d sure like to lease my mineral interest for $1000 a month, any takers?
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I am going to assume that you mean Oklahoma, Custer County, 21-12N-14W. Most of the leases in the last 24 months in that township have been at 3/16ths. Most of us would like that higher royalty than 1/8th. Looks like at least two leasing agents are working the area. (Operators often use agents to do their leasing for them.) If the well is successful, the larger royalty for many years far outweighs a one time bonus payment at the lower royalty.
if you have not leased in a while, it would be a really good idea to get a good oil and gas attorney to review the draft lease and make more friendly mineral owner edits. The drafts are rarely in the mineral owner’s favor and you could lose quite a bit of revenue by signing that lease instead of a better professionally advised one.
The old leases in that area were for conventional vertical wells. The new play is for two-three section horizontal wells in the “Cherokee” shale. There are permits in 13N-14W and rigs running in 13N-13W
@user41-The definition of “ residual oil” in oil and gas production is the amount of oil that remains in the ground after primary and secondary recovery methods have been used-years and years into the life of a well. It is usually a heavier and more complex hydrocarbon that has mixed with water and may not be able to get through small pores and low permeability rock. (Think sludge) Enhanced recovery such as CO2 (carbon dioxide) can be used to reduce the viscosity and loosen it up from sticking to the pore walls, making it easier to flow. Please use the term correctly.
Hydraulic fracturing is done at the completion of the well at the beginning of well life. Today, approximately 95% of all new wells are fracked in order to be economically viable. Mineral owners would not be getting royalties from the highly complex shale reservoirs without fracking. Hydraulic fracturing is considered standard practice for modern oil and gas wells.
Fracking was invented in 1947 in Kansas, patented in 1949 and spread to Oklahoma and Texas in the vertical and directional conventional wells. George P. Mitchell made the breakthrough to using fracking and “slickwater” to open the shales to extraction and millions of mineral owners are grateful for that technology.
If you have an issue with fracking please open a different topic area where the forum can comment there.
I have one offer for inherited-not probated mineral rights in Caddo Co. I live out of state. Any attorney recommendations? Thanks
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Welcome to the forum. Is your offer to buy or to lease? Did the ancestor live in OK or out of state? There are several excellent attorneys on the website who can walk you through the process. The Directories tab above lists several attorneys.
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I have heard more about fracking in this post than in the 9 yrs I worked in Kansas as an oil analyst for the KCC many years ago. Fracking has been around since 1947, but not utilized that much until about the last 20 yrs. I just leased some mineral rights in OK, and my new lease says, ‘… for the sole and exclusive right to explore by geophysical and other methods for mining and operating for oil, gas …’ Those words ‘other methods’ encompasses any technology to extract oil, gas and by-products, although the method is not explicitly named. So, those two words in a lease cover drilling, fracking, injection wells, salt water disposal wells and a myriad of other techniques and their variations used for production. Besides wording in a lease as to payments, the pooling orders cover royalties proportionately within the confines of the pool. So, I’m a bit confused why you think you are leaving money on the table and can / should ask for an extra $20k in a lease? You are / will be / should be paid under the terms of the lease and pooling orders for your share.