Lease or not?

I’ve been approached by Kraken Oil offering a lease on our minerals in Richland Co. The offer, of course is a far cry from what we got in 2014…3 years/20%/$1800 per acre bonus. Now that oil has made the big drop and seems poised to rise again, I am hesitant to re-lease as our area was extremely active, with producing wells in adjacent sections pretty much in any direction. The current offer, 5 years/18%/$350 per acre does not seem worthwhile to me, as I believe that this plot will be drilled in the next couple of years. IF we do not lease, and a producing well is drilled, I am assuming we would be “force pooled” into the production unit, and would receive not 18-20% of our interest, but 100%. Am I correct in this??

Advise from those in the know would be appreciated!


Yes, if you decide not to lease and they want to actually drill, then they would force pool. You would get a couple options , for example maybe 1000 per acre at 1/8, 750 per acre at 3/16, 500 at 1/5, and nothing at 1/4. (That's just an example). From those, you would have to choose which you want. Your best bet may be to check with some other oil companies and what they would like to offer. Feel free to add and message me. I can give you some emails of people I have worked with in the past that may be leasing there, or know someone who is.

OK, so we might expect only a few hundred more per acre bonus, or perhaps no bonus but only 25% ,max? The main reason I would withhold leasing now would to get the max possible royalty on any future production.