Mewbourne sent a letter that offers $600.00 per acre for a lease/assignment covering all of your right, title and interest in said unit, delivering an 81.25% net revenue interest; or no cash for a lease/assignment delivering 75% net revenue interest. Proposed well-Ambassador Inn “19/31” DM #1H. "If you wish to participate in the drilling of the proposed well by paying your proportionate share of costs, please sign…"We are not understanding what this letter is about. Can someone explain?
This is a common notification letter. I do not sign the letter as only a signed lease or a force pooling is the actual agreement. Why waste a stamp. It usually means that leasing is happening and a pooling case is about to be filed. They are offering a 3/1ths option (18.75% to you and 81.25% to them) or a no cash and 1/4 lease (25% to you and 75%) to them. Participating is not for the novice. Many of us would take the higher royalty and no cash bonus as the higher royalty payout on one or more wells is usually far higher over decades of production versus a one time lease bonus payment.
What is the township and range for the upcoming well and the forum can give you more information about the area?
Thank you for your response. Ambassador Inn “19/31” DM #1H Sections 19, 30 &31-15N-17W Custer County, Oklahoma
Mewbourne and others are drilling horizontal wells into the Cherokee and Redfork in that area.
You do not have to lease with the operator. You can lease with a third party or wait for forced pooling. It is wise to get an attorney to review any draft lease as they are rarely in the mineral owner’s favor and need negotiation. You do not want post production charges and some other clauses that will be attempted.