Lease offer Garvin County

haven’t been on this forum for several years. have an offer; 3 year, .20%, $450/acre for small acreage in !N 2W section 25. had basically same offer 2 years ago by same company. is this a reasonable offer?


J Donley

Continental Resources has quite a few regulatory cases in the last two years in nearby 23 and 24. The last pooling order was in late 2020 in section 24 for $1305 1/8th, $1215 3/16th, $1035 1/5, $360 1/4. I use any pooling in the last 12 months in the contiguous eight sections around my section to gauge the reasonableness of an offer. I usually ask what they are offering for 1/5th or 1/4 and take the highest royalty. The bonus is usually insignificant compared to the long term higher royalty benefits. Also, the clauses in the lease are much more important than the bonus. The draft lease is not usually in the mineral owners’ favor. Getting an oil and gas attorney to look at it can be worth the cost in the long run.

We have a lease on 80 acres in 1N1Wsec13 that is up for renewal this fall with Continental.

Are these OCC Orders available through the OCC Database - Online Case Processing System?


Pending OCC cases at the following link:

Actual cases if you have the case numbers:

appreciate. our O&G lawyer pointed out 5 clauses that were not in our interest. our acreage is so small that Continental would not budge on the clauses…we can take it or leave it. us three brothers will visit about it, but imagine we will sign a lease for .20%. the last time we leased this tract [4-6 yrs ago] we were able to make changes in some clauses. and much better terms.

thanks again


You can wait until the pooling instead of signing a bad lease. Some companies won’t budge, so that is when I take a pooling at the highest royalty offered.

Donkey- I own a small piece here too. I’ve been offered a little more then that. Not much more. Working on lease form now.

We have mineral rights in Garvin County, Sections 22 and 34, where land men representing several different companies over the past decade and even longer have paid us bonuses for our leases but so far there has been no drilling. If one waits for pooling, are you possibly missing bonuses? How does one tell whether to ignore bonus offers on leases? I am fairly ignorant about these issues. Are they paying us bonuses to prevent others from drilling?

You would have to give a complete section, township and range got a more precise answer.
Pooling is a type of very short lease mandated by the OK Corporation Commission. The bonus you get is similar to a lease bonus. The whole idea is to drill if economically feasible and prudent. With Covid last year, not much happened. Some areas are starting to open up for drilling again.

Our two mineral rights in Garvin County are the following:

Section 22 T01N R01E - 5.0 Net Mineral Acres Bonuses Recd: 03/2012 = $ 938 02/2016 = $4750 01/2019 = $4750 03/2021 = $3250 Total = $13,688

Section 34 T01N R01E - 30.0 Net Mineral Acres Bonuses Recd 05/2011 = $ 4500 03/2013 = $37,500 08/2019 = $40,500 Total = $82,500

Please correct me if my understanding is faulty but I assume that pooling occurs at the time or just prior to drilling. In that case, would we have lost over $95K if we had waited for pooling? This begs the question, why is Continental Oil willing to pay such a large amount over the years without drilling?

Thanks of any information you can provide. Are there individuals like yourself who advise people like us for a reasonable fee?

Each company looks at its own total portfolio across states and countries and decides which plays or trends are economic in the time frame and current technology at the moment. They usually lease several months or years ahead of the bit. Lease amounts offered are a combination of competition in the area, product prices and other factors.

Early 2011-12 horizontal drilling was just picking up steam, lots of technical and economic uncertainty, so offers were in line with the risk. 2013, after some successes, leasing was more speculative and trying to beat a land rush, so offers were higher. 2019 had much better technology.

Operators will focus their efforts where they can make the most money. If they have a huge inventory, then they will high grade and drill some areas first and keep their leasehold alive and lease again in areas that they still like. They did drill the Havens 1-24-26XH in 2014 to prove up a window of Woodford in 1N-1W. They also drilled the Mackey 1-28H in 28-1N1E just west of you. They proved up the area, but the results were not stunning. Other areas were more prolific to the west in the trend, so they focused there first.

Pooling does occur right before drilling to catch any mineral owners that have not leased to date. Some people wait to pool and others prefer to lease. You were fortunate that you were able to lease several times. Many operators consider leasing money to be rather insignificant compared to royalty income, so they keep some areas protected by leasing long before they drill. Some areas, they let go if not interested or the play doesn’t pan out economically.

Continental and others did quite a bit of leasing in 1N-1E in 2019. Due to the drop in demand and prices during Covid times last year, drilling dropped back significantly. This year companies are slowly ramping back up with demand increases and price increases. They are completing wells that they did not finish last year. And I expect more drilling late in 2021 and early 2022 (but I could be wrong…depends upon demand).

There are quite a few OCC cases regarding 1N-1E. Continental just pooled section 22. If you were leased, you would not have received a notice of it, but the orders can be found on the OCC website. Orders were for $850 1/8th, $750 3/16th, $650 1/5th and $0 1/4. Continental has 365 days from Jan 6, 2021 to drill the well. The Petrie well will be drilled in a more east west direction and share from sections 17, 21 and 22. The maps are on case 202001547 exhibits. They are trying to avoid faults to the north and to the south and shoot the gap.

Yes, the National Association of Royalty Owners (NARO) has Certified Minerals Managers that do consulting. NARO members do a good bit of networking on this forum and at the state and national conferences. There are also independent mineral managers. Banks and Trusts also have mineral specialists.

This topic was automatically closed after 90 days. New replies are no longer allowed.