My mother-in-law received a lease agreement for an interest in mineral rights that she received ownership of after my father-in-law passed away. She was ready to sign before we asked her to do a little investigating, given that she has a limited income and many years left to live. I’ve taken it upon myself to learn about mineral rights, oil and gas leases and the process of negotiating them. The more I educate myself, the more questions I have and the more uncertain I am of my ability to better her part of the agreement. Specifically, she owns ½ of a ½ interest of 40 acres in Logan County, OK. (She owns several other interests, but this is the only one for which she has received a lease.) The landman has offered a 3 year lease, offering her $150 per acre for a total of $1500 in bonus payment, and royalties of 3/16. Additionally, the lease offers a 2 year extension with a 150% bonus payment due if exercised. The landman indicated that both the bonus payment and the royalty percentage are standard for pooled leases in Logan County. I’ve researched both the landman (T.S. Dudley) and the company that they represent (Devon Energy) and am confident that I’m dealing with professional organizations, but I’m not ready to take the word of a man who is not representing my mother-in-law.
So far, I’ve told the landman that we would like to delete from the contract the warranty clause. I may also ask that the extension provision be removed, as well. As for the monetary considerations, I am at a loss to how this thing stacks up against similar leases nearby. I’ve looked at the group forum here and found that there is not a Logan County group. I’ve also looked at groups for adjacent counties and found that those are inactive. I’ve also spent a good deal of time on the Oklahoma Corporation Commissions web site, but have found little useful information. Can this forum offer some guidance? Is $150/acre and 3/16 fair? Thank you and sorry for the long post.Don’t worry about the long post - it was necessay to give all the pertinent facts so someone could maybe have an answer…
Hi, Nothing wrong with a long post. Very good info. I lease my family’s minerals all over the state. I have only been doing this a couple of years. I have been trying to keep up with what bonus and royalty amounts are being offered. This is the best website I’ve seen. So you are in the right place. I’m surprised that you have an offer in Logan. The closest I have seen to you is Okla county. The highest prices I have seen in the last year have been in the southern part of the state at $500 to 800 per acre bonus and 3/16ths. We do not accept less than 3/16ths. It has been a standard for years. Recently iwas offered $150 per acre in Okla county and asked for twice that as our interest was only 1.5 acres. The offer was withdrawn. I wrote the landman and said I would take the original offer because I was asking for twice his offer on my small interest putting him in a bad position with anyone who owned substantially more. Also I want to find out what is going on in Okla county. So I don’t think the bonus is bad of itself. I look to royalties over the long term. Hope this helps.
So I've researched the Oklahoma Corporation Commission's website and found 5 wells in that particular section, township and range of Logan County. It appears that drilling began in 1981. I've seen nothing more recent. I also searched for other signs of Devon's activity in Logan county and have found one Permit To Drill issued just last month. The following is a link that leads to that permit:
http://www.occpermit.com/WellBrowse/Webforms/WellInformation.aspx?I...
Is the name listed next to Devon's the owner of the land or mineral rights? If so, I may try to get in touch with them. Is there some other method of discovering the owners of mineral rights of the property in question? I'd really like to get in touch with others.
Thanks.