Mineral offers in 1-3-5


#1

We have received a very tempting offer for our 25 mineral acres in 1-3-5. Any information would be helpful. This has been in my wife’s family for 4 generations.


#2

Here is my thinking any time I get an offer to buy. Do they know something I don’t know? Probably. Are they going to make money off of me? Probably. Would I rather have that money? Most definitely. Am I willing to wait some time for it? Yes. Do I really need to sell? Only you can answer it. Do I have to sell all? No. Some? maybe None? Do I have heirs I would like to pass this down to? Is there a possibility of future drilling down the line? How can I get more informed?

I look up the investor presentations of the operators in the area and see what they are promoting. Continental is your operator. You already have two horizontal wells. Is there a possibility for more? Maybe. The section to your south has about six or seven. Section 3 has an increased density for another SEVEN Woodford wells. So that makes your section look more promising.

We have had our minerals for four generations as well. We tend to hang onto them hoping for future generations. You have to do what is best for your family, but slow down and really think about it. (Also, they usually forget to tell you that you probably have to pay capital gains tax on any sale.) And there are a lot of bait and switch offers out there. Offer high and then retract it later. You do not have to sell all of it. If you need money now, you can sell part. Also, never ever hand over a deed without getting a cashier’s check in hand. THere is a lot of flipping going on out there.


#3

M. Barnes,

Thank you so much for responding. I appreciate your help and respect your knowledge of the oil and gas industry. My wife and I have learned a lot these last 8 years but this is certainly not our area of expertise. As you mentioned we would love to feel like we are eventually leaving something for our children and grandchildren. We are semi-retired and the money isn’t a need right now. The monthly income has been a great blessing. If we sold our royalties we would have to make that money work for us and are very uncertain how to do that (even after financial counseling). Thank you again, if I have another question down the road would you mind my asking you or do you counsel professionally? M. Peters


#4

Don’t mind answering questions at all. Your question may be the exact one that someone else is thinking, so ask away.

Since you do care about the next generations, make sure that your mineral rights are part of your estate planning and very carefully described in the probate documents. It will save the kiddos so much time and effort. I am in the middle of settling an estate in our family right now and it is “not much fun” to reconstruct mineral holdings just because someone didn’t feel like doing paperwork.


#5

M. Barnes, We have already experienced the problems you are dealing with. I spent days and many hours at the Grady County Courthouse researching our inherited minerals, some all the way back to before statehood. That is a great tip for everyone, thanks for mentioning it. Thanks again! M. Peters


#6

You mentioned researching before statehood. We have 115nma along with our 230 acres surface. My Dad tried to find out over 12 years ago if the minerals were included under the railroad that is now the Burlington Northern. Years ago it started out as the Oklahoma City and South Western railroad. The last time we leased, they balked about paying for minerals under the railroad. Since we had been paid for the entire 115 acres in the past, I would not settle for less than 115 acres. The lease has been sold again to Camino Natural resources and the question of the railroad has arisen again. We opted for payment in 3 equal yearly payments to avoid taxes on the entire sum. Uncle Sam likes to take a big share when they see large sums of money. Camino is questioning the acreage under the railroad, but the lease was for 115 acres…
On another note, if you are also a surface owner and get drilled on. Put up some of those game cameras around any equipment or things you value. We lost our Windmill to someone connected to the H&P #44 rig when they were taking the rig down. Looked like they pulled the tower down with a Skyjack or telehandler and took the head fan and tail. A new mill is $10,000 and a used one is about $6000 plus installation… Just FYI


#7

M. Barnes I have read and re-read your response to me several times and wanted to follow up with one of your suggestions. You mentioned we should research the operator’s (in our case Continental) plans for the area and I tried doing that. I found the map of the Continental SpringBoard. I think that is their current concentration of wells. I feel certain you have a far greater understanding of that than me. I can see that Sec 1-3-5 is not included on that SpringBoard but with the amount of the offers we have received it seems likely that something is in the works. What is the best way for me to look up the investor presentations? I hope I am not imposing on your time, I so appreciate your help. M. Peters


#8

Make sure that your estate plan is in order. You can do many things to make things easy for your heirs. While a Will is good, there are several ways that you can leave property without the need for probate, namely a Trust or Transfer on Death Deed (beneficiary deed).


#9

The major players in 3N-5W are Gulfport MidCon LLC and Newfield (just bought by Encana). I just Google their investor presentations and read what is going on. Many of them are just now or about to post their Q4 2018 presentations. Gulfport usually has beautiful maps.


#10

Newfield was purchased by Encana? I wonder if that is why they didn’t do the other Wilson wells? Huh.


#11

Encana is definitely into horizontal wells and shale plays. It may take a while to get all the priorities rebalanced with the new company culture. Lots of moving parts. Start watching both the websites. Not sure how long it will take to fold in NF to Encana.


#12

Cecil; We had some experience with RR land which came about in ‘85. There was some minerals which had been my Grandmother’s. The land had been sold. There was a RR running through the property. Drilling had started and when they got down to ~ 9200’ it was realized that NOT ALL LEASING had been completed. The RR had pulled out and upon doing so the Minerals reverted by to Her. So a second round for New Leases which covered ~6.8 acres suddenly came into existence.

This was in Grady County. There is a Lawyer here in this Forum who pop’s in from time to time with answers. Maybe he will see and respond to your situation and it’s History.


#13

Lease your minerals, don’t sell. Don’t focus on the bonus/quick money when selling. That’s what they want you to focus on! Focus on the percentage of the outcome. That’s where the money really is…for the future. Patience pays off! I’m living proof.