Mineral Rights Canadian County

I was just informed that a well was drilled on my property over a year ago without me being notified. The company is now contacting me as they stated they found out that I own the mineral rights to 3 of the acres drilled on. They are offering me a lease option 3500/acre 1/8th, 3000/acre 3/16 and 2250/acre 1/5 for a 3 year term…

I probably would not sign a lease because of a court ruling as follows:

This court has held that the measure of damages for taking oil from land through mistake, where the lessee entered into peaceable possession of the premises believing in good faith that the lessor owned the entire title in the premises, is the value of the oil at the surface, less the reasonable cost of production. Barnes v. Winona Oil Co., 83 Okla. 253, 200 P. 985; Zelma Oil Co. v. Nemo Oil Co., 84 Okla. 217, 203 P. 203; Minshall v. Berryhill, 83 Okla. 100, 205 P. 932. Ludey v. Pure Oil Co., 11 P.2d 102, 157 Okla. 1, 1931 OK 527 (Okla. 1931)

In other words, you stand to gain much much more by demanding a 100% royalty.

1 Like

Section 29-14N-5W

Thank you!

How do I find out how productive the well has been for this last year?

Red Bluff Resources is the operator that contacted you?

I see their well: Leon Treece 2-29MH. If that is your well, it totaled 130,305 MCF of NatGas & 47,289 bbl of oil between Feb 2019 & Sept 2019. Looks like it has declined down to 95-100 barrels per day.

Yes ma’am, they sent me a letter and when I didn’t respond - they searched me out and found my cell number. He told me that I wasn’t easy to find.

You have a very strong bargaining position. I would look well beyond what they are offering.

1 Like

I would definitely make a deal with them. Get the highest royalty you can. And NO post production costs. You don’t want this tied up in suspense where you don’t get your money. We have some decent lease forms if you need help. Michelle

A lease might not be to your advantage in your unique situation. I would not rush into a decision here.

I just received a Well Proposal Letter and AFE via certified letter…they are giving me 20 days to respond.

They are going to file a pooling application if you don’t lease. You will then be “forced” to accept one of their offers under the pooling order or participate by paying your proportionate share of the total costs to drill, complete and produce the well (the only way to receive 100% royalty) Since you are un-leased and not subject to any pooling order, the 20 days means nothing at this point. Once the pooling application is filed, chances are other companies will contact you to try to negotiate a lease and will probably offer terms better than the ones you have been offered by the operator. If you have a decent amount of minerals, you may even be able to get an even better deal. Most important is that the lease form, should you decide to lease, has a no deduction clause for post production expenses. Good Luck.

1 Like

This topic was automatically closed after 60 days. New replies are no longer allowed.