Yesterday I received a notification that there is a hearing about a proposed new horizontal well that passes through my acreage in Grady county. Today I received a letter from an attorney outlying my proposed options for my interest, and I just want to make sure I understand them.
My options are :
-
To participate to the full extent of my interest the cost is appx 11M and this will include all owner interest.
-
Lease/assign my interest for a bonus of 1500 per net acre and an 87.5% (1/8) net revenue interest
-
Lease/assign my interest for a bonus of 1250 per net acre and an 81.25% (3/16) net revenue interest
-
Lease/assign my interest for a bonus of 1000 per net acre and an 80% (1/5) net revenue interest
This is just a vague guess (I think I figured it out once) but I believe if you took all of the partial interest I own in this area and mushed it all together, in total I own somewhere between 6-8 acres.
So option 1 I have to pay my share of the 11M (about $43,000) but would then receive 100% of the royalties on my portion.
Option 2-4 I would receive a 1 time payment ($7000-$10,500 appx depending) and future royalties would be the stated ones.
So, do I understand these options correctly? If so, which would you choose (option 1 not really viable). What happens if I don’t pick an option? Finally, when can I expect to get the bonus?
Thanks all