Lease Offer for Pawnee County S29-T23N-R4E

I recently received a lease offer from Petro Warrior for Section 29-T23N-R4E. There were 4 lease options , 2 were for "all depths "($75/MA-1/8 royalty and $50/MA and 1/6 royalty) ; the other two were for “the Red Fork formation and Mississippi formation rights only” ($52.50/MA and 1/8 royalty) and $35/MA and 1/6 royalty). I have never seen lease options for only specific depths. Has anyone heard of any drilling in this area and do you have any information of leasing only certain formations?

I sometime get leases like that. It is sort of like having a depth clauses without having a stated depth clause. Many of the pooling orders are now by all reservoirs or by individual reservoir with a certain amount per reservoir. Personally, I prefer a higher royalty and I don’t care about the bonus much because I only get it once and it is usually small compared to the royalties from one well or more over the life of the lease.

Check your files to see if you were pooled or leased earlier. Territory drilled a horizontal well in the Mississippian in 2010. It was called Spider 1-29H. It produced from 2010-2014. Not sure if they are planning to kickoff from this wellbore into a new horizon or drill another well. Time will tell. Petro Warrior owns the well now.

The terms of the clauses in the lease are far more important than the bonus amount. The draft lease they send you is most likely not in your favor, so will need some negotiation. I especially make sure that I have no post production charges allowed as they can eat up your royalties.

PetroWarrior has filed an OCC case for spacing. They have filed for 640 acre spacing for the Red Fork, so that is the intended reservoir.

Thanks for the info. It does say “Well Recompletion Proposal-Spider #1-21H” and is from Petro Warrier. Thanks.

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