Lease Offer From Bearcat o/b/o Continental Resources

Oklahoma Mineral Rights Stephens County, OK
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Family has owned rights on two sections in Stephens County, Oklahoma for years.

Over the years, we’ve had previous Leases (2) with intermittent offers to Buy (all refused) holding out for another fair Lease. Still no interest in Selling, optimal Lease offers will of course be considered/negotiated.

The Sections in Stephens County are Section 5, Township 3 South, Range 4 West; and Section 32, Township 2 South, Range 4 West.

Recently Bearcat (a company we’ve pleasantly dealt with previously) contacted us with three Lease options (No Deadline for response yet)..

Option 1: Lease Term of 3 Years with no Option; at one-eighth Royalty (1/8) and a Lease Bonus of $1,002 per mineral acre.

Option 2: A Lease Term of 3 years with no Option; at 3/16th royalty; and a Lease Bonus of $752 per Mineral Acre;

Option 3: Lease Term of 3 Years with no Option; at one-fifth (1/5) Royalty; and a Lease Bonus of $502 per mineral acre.

We own (inherited from 2 generations ago) approximately 4.44 net mineral acres in 32-2S-4W and approximately 1.10694 net mineral acres in 5-3S-4W.

Is anyone aware of other companies than Bearcat “suddenly” anxious to negotiate Leases (not purchases) in Stephens County, Oklahoma? We’d like to get other Lease Offers to consider but don’t want to overthink this. Note too we received a random phone message from Evan (Last Name Unknown) from “Land Hill (?)” with an OK Area Code Phone Number. Does this flurry mean prospects for drilling, etc. are promising for these companies?.

Thanks for any thoughts on our pending Lease Offer from Bearcat. If more details are needed, please let me know. You folks have been invaluable over the years. Everyone be safe.

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Continental has a drilling program in that area. Looks like they are heading your way. Many of us would like the highest royalty possible as the royalties from successful wells over many years from a higher royalty choice will usually far outweigh one time bonus for the lower royalty option.

It would be very wise to get a good oil and gas attorney to review any lease draft as they are usually in the operator’s favor and not the mineral owner’s favor and require substantial edits. If you cannot get a good fair lease with the operator, then there may be other agents who are working for third parties who may be more amenable to better terms.

You can also wait for pooling as it has its own advantages.

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Add another sincere Thank You for your wonderful feedback. You have helped us on this Forum many X over many years. I’ll try to keep everyone updated as discussions proceed.

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Hi Michael, My family has multiple acres on that same area in Stephens county & we are continually getting notifications in the mail regarding multiple filings for new wells & extensions on existing wells on the springer, woodford, & others, yet no payments being made… wondering who do we need to talk with to get our payments structured… spoke with Delvin at Continental division orders to confirm our heirs / probate and awaiting payment structure or Something … going to head up to OKC soon to discuss with clerk of the court & judge who presided over our previous case.

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Interesting Update on the Lease Offer from Bearcat o/b/o Continental regarding Stephens County holdings in Section 5, Township 3 South, Range 4 West; and Section 32, Township 2 South, Range 4 West.

The original proposal and options from Bearcat are set forth by me above to start this Thread. We had not responded to it in any detailed way.

Yesterday I received an e-mail from Bearcat stating the following:"I understand you were planning to review other proposals, and I wanted to let you know that (Continental) increased its offer last week for the minerals in (the two Sections involved)

Section 32-2S-4W

4.444 net mineral acres

At $1,500 per acre for a 3/16 Royalty: $6,666.60 Total Bonus

At $1,250 per Acre for a 1/5 Royalty $5,555.50

Section 5-3S-4W

1.10694 Net Mineral Acres

At $1,500 per acre for a 3/16 Royalty $1,660.41 Total Bonus

At $1,250 per Acres for a 1/5 Royalty $1,383.68 Total Bonus

Total for Both Sections

5.55134 net mineral acres

$8,327.01 total bonus for a 3/16 Royalty

$6,939.18 total Bonus for a 1/5 Royalty

Questions: Does them upping the oriiginal offer options for both Sections indicate anything to you folks?

How likely is it I would have further leverage to negotiate an even more favorable Lease(s especially regarding the proposed Royalties? Note no additional time option has been proposed by Bearcat beyond the three year proposed Lease period(s)

May I ask Bearcat to mail me a proposed Draft Lease with all Exhibits, Addendums, etc. for my close review before committing?

Sorry this was so long. Thanks have a great holiday weekend.

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Ask for the 1/4 royalty option. May not be on the table, and their offers aren’t bad, but before settling on less royalty, fight for it. But only if you have a great Exhibit A to counter all the deductions. Otherwise, wait for pooling

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Petroven, Sobo I and Blue Ox holdings are also leasing in sec 5. Many at 1/4.

The clauses are the most important issue. Sometimes the other leasing agents will give better clauses.

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Just an update. We received a “bare bones” unsolicited Lease Offer (via Text) from Todd Baker, presumably a Landman at “SBC Global”(?). Just bare bones but it clearly said a component of “his” Offer was a 1/4 (25%) Royalty. He did not address whether the offer included an Option of any kind/length. I haven’t responded yet.

I have asked the Bearcat Landman (Julie Carruth) whether she would provide us with a Draft of the complete proposed Lease (details above in this Thread) o/b/o Continental Resources. I certainly agree from past advice on this Forum that the clauses, including Exhibit A, are the most important issue. Holiday weekend so no response expected from Bearcat until later in the week.

I hope you are all having a pleasant holiday weekend (cold and rainy here in the East..all weekend!).

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SBCglobal is an email carrier, not the name of a leasing company.

The lease clauses are the most important part of a lease. It is wise to get a good oil and gas attorney to review all draft leases and make the appropriate edits to get them more favorable to a mineral owner. If hiring an attorney is not feasible, then the force pooling is a good alternative. I pick the highest royalty in known productive areas.

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I used Ward Hobson, an attorney out of Oklahoma City. He was able to get me a 1/5 lease and no production costs, plus no use of my water, which were most important to me, as I own 160 surface acres too.This was on 106.87 nma in Sec 25, 2S, 4W. Three 2 mile horizontal wells were approved April 15th. I’m hopeful we may see some drilling in 6 months. This process has been over 20 years, as I bought the property in 2005. We have had many leases over the years. Attorneys aren’t cheap, but they know what to do.

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