A solar energy firm wants to lease our minerals in Garvin Co. OK T&R 4N-2E (parts of 6 sections). The company has offered each family member a flat sum to lease our minerals in their target area for 40-50 years. Family members have a total of 1100 net mineral acres (nma). OCC Well Data says there have been 53 wells in the T&R with 51 PA. With these results, I feel comfortable leasing for a long term. Horizontal wells to reach any minerals we might have are okay. My question is how much we can charge for our nma on a per net mineral acre basis?
Do you mean that you are accepting a one-time “lease bonus” for a 40-50 year primary term oil, gas and mineral lease under which there may never be any drilling or development? As the lessee, the solar company can prevent any development as it will not want the surface disturbed and also may be unwilling to participate in wells by paying the drilling costs, whether the surface location is on or off the tracts. Unless the agreement has a way to force development, it is essentially a sale. Six sections is 3840 acres and if your 1100 nma is spread equally, then you own 28.6% of minerals. The remaining majority mineral owners may or may not be able to force development. I have no idea if lessor can force the lessee to participate as non-op WI in Oklahoma and that will affect royalties. If you own 100% of various parcels in the 6 sections, then depending on the layout, those parcels could be excluded from wells. Consult with geologist, attorney and an operator, looking at maps and other data.
Are any members of the family getting royalties off of any of the sections right now? If there is production, then the new firm many not be able to lease. Are you sure you have 1100 net mineral acres? If you are going off of old lease forms, then they list the gross acreage. If there are enough of you, then it is possible, but rather rare.
That area is not particularly “hot” right now, but there are new permits to the north and to the south, so some potential may remain. I would be very hesitant to lease for 50 years. Depending upon the sections, if you lease to the solar company, then are not likely going to allow any mineral drilling , so you won’t have any horizontal wells or royalties unless you specifically protect yourself with the correct wording in the lease. Definitely need an attorney to look at this offer.
These are difficult, I would be extremely hesitant to enter that agreement. You could jeopardize the value of your minerals.
Notice:Informational only. No attorney-client relationship is formed by this post. I am an Oklahoma-licensed attorney, but this is not legal advice. Do not share confidential facts in this public space.
Of the 52 wells drilled, 50 were PA according to the OCC website. The family has no producing minerals. The land company says we have about 1100 net mineral acres spread over 6 sections in 5N-2E Garvin Co. They say we can drill horizontals. Yes, I think you and the other folks that have posted (thanks everyone) are right on involving an attorney. So far, they have offered me $6k for my 80 nma as an example of where the money started. Thanks again for your reply!
Would suggest that if you decide to lease, do each section separately. You do not want all of the sections tied to each other if the size of the solar farm is decreased.