Hello all,
I am a newbie to mineral rights. In 2010 I inherited the mineral rights to several sections in Cleveland County (as well as Pottawatomie, Kingfisher, Logan, and Seminole) from my late father. Basically I know very little as my father did not keep good records. I'n not sure how to go about determining if there are existing wells and, if so, whether they are producing. I have watched several very basic video tutorials on mineralrightscoach.com to try to get up to speed on the concepts and terminology but I need to know what I have in terms of acreage, net mineral interest, and existing/planned rigs. Does the SE, NE, etc indicate a further subdivision of the lot? If there are multiple rigs in that section, do I have an interest in each of them? Do operators hold royalties in perpetuity for mineral interest owners that they haven't been able to track down?
Sorry, just not sure how this works or even where to start.
Any help is greatly appreciated!!
Here are my properties:
3-10N-1W SE
16-7N-1E SE
21-7N-1E NE/4 NW/4 NE/4
21-7N-4E NW
Donald, all the minerals I have in this county are in 5N-1E and 6N-1E. I am watching for a completion for the Bronco 17-5H in 17-7N-1E, which is just west of your 16. You can see the Permit to Drill and Spud Notice on the OCC site. The spacing application for 17 is http://imaging.occeweb.com/AP/CaseFiles/occ5108363.pdf and exhibits which may be of interest are http://imaging.occeweb.com/AP/CaseFiles/occ5114240.pdf and http://imaging.occeweb.com/AP/CaseFiles/occ5114241.pdf .
Thank-you so much Wesley. If you don't mind my asking, what bearing does drilling on Section 16 have on your interests or, for that matter, on my interests? I noticed that the Helsel North well operated by Veenker Resources is on my 16. I've been getting very small royalty checks so I assume this well must be an old rig. What is the likelihood there will be new production if the Bronco unit is successful? Can an old lease with minimal production be terminated to make way for new drilling?
Wesley Skinner said:
Donald, the only active well I find in 16 (Okla Tax Commission https://www4.oktax.onenet.net/GrossProduction/PublicSearchPUNbyLegal.php ) is the MCKIDDY TR 1, operated by Veenker. If the Bronco well is productive, eventually there will be interest in the surrounding areas. The formations of interest are targets for horizontal drilling, and almost all of those spacing units are 640 acres. One of the exhibits above shows the thickness (important to horizontal drilling) of the target formations in drilling records from old reference wells in the area. Some of these targets are shale (source rock), which in the past were not productive because it is so dense, but now releases oil and gas using fracture technology. Shallow inland sea beds, millions of years ago, became compacted and organic matter matured into hydrocarbons. The shorelines and depths of water vary so the boundaries of possible production are very irregular.
Since you also have minerals in Seminole and Pottawatomie counties, I will make a short response a little longer. Silver Creek now has drilled about 75 wells, beginning in Hughes Co., and generally moving west. You could take a look at that county forum group for some recent comments. Then they moved into Seminole county and now Pott. and Cleveland. It seems they are trying to define the limits of productive Woodford shale, although they have produced horizontal wells from other formations. Up to this time, stretching from Hughes county to Cleveland counties, the Woodford seems to be thick enough in portions of the 6N and 7N townships. The first of their wells in Pott. Co. is in 4-6N-2E, with the surface location in 9-6N-2E. If you want, you can look it up with the info in my response on the Pott Co Group Forum. It was drilled a few weeks before the Bronco. In the next few months we will know more about the potential value of our mineral interests.
If there is production potential in Sec. 16, you will probably receive at least one unsolicited offer to purchase your mineral interest (remember the 5 M’s) and then a letter from an attorney representing Silver Creek (or some other company) with your copy of an Application for Spacing which has been filed for hearing before the OCC. This could happen at any time. This does not mean that a well will be drilled or produced. Remember the “counting chickens before the eggs hatch” and “don’t spend the money before the check clears” sayings. But we can hope.
Now to your question about the old lease production, no the old lease will not be terminated. Almost certainly, if a well is proposed, the operating company will choose to take a working interest in the new well, or sell your lease. Since your lease is old, my bet is that it is a 1/8th royalty. If you can’t find a copy, I’ll help you find the recording information and you can probably call and get it from the County Clerk for their fee. If you have minerals in the section that are not held by production, you will get offers to lease.
I can tell you that Silver Creek, through their agent United Land Services, has recently exercised a 2 yr. option on a lease in Sec. 1-6N-1E, and probably covering their interests around the area. In just the last few weeks Silver Creek has initiated Spacing and Pooling for Sec. 12-6N-1E and Sec. 9-6N-2E. So there is some reason for optimism.