I just got an offer of $650, 3/16, 3 years on 34-17N-4W in Logan County, OK. The landman is Andy Marlette of Jack Fork Leasing and the interested operator is Sundance Energy. I asked if this offer was for an existing or a new well and was a bit suspicious that he responded that he did not know.
Any feedback on the terms (fair offer?), Andy Marlette, Jack Fork Leasing, or Sundance Energy would be appreciated.
Donald,
Jack Fork Land is the lease agent for Sundance Energy and if they're looking to lease they're likely planning to drill.
I negotiated leases for my mother and aunts in 2012 and got $750.00 per acre and 1/5 Royalty. That's up from $75.00 and 3/16 over a 6 month period; with some back and forth between lease agents for different companies or the companies themselves, who might want to lease your acreage just to get in on the action! We too were first contacted by Jackfork who's last offer was for around what you were quoted, as I recall. Our acreage is in S26-T17N-R4W and Sundance has drilled 2 Horizontals which were reasonably productive.
We ultimately signed with Greg Taft of Moncreiff Oil Properties.
You might want to call some other companies just to see if you can squeeze out a better offer----It's always worth a shot.
You definitely don't want to get caught up in a pooling order where you might not get as much; so make your calls. I'm aware that different companies (Osage/Slawson, Stephens and Sundance, primarily) have drilled no fewer than 10 Horizontals within a 3 to 4 mile radius of your area which have been productive to varying degrees.
Best Regards and Good Luck!
Offer is probably just a bit low. The first one usually is. Andy does work for Jackfork. They are land brokers that are hired by the oil companies to do the title work. Make sure you get the clauses you want, not what they offer. Jackfork will work with you up to a point. The going rates are $750 3/16 and $650 1/5 $0 1/4 from a recent pooling in the section 27 just to your north. You can lease or you can wait for force pooling. I think Sundance is out of Australia, but they have been in OK for a long while.
Thanks for your response. I am a newbie to dealing with the O&G leases so I hope you don't mind if I ask a few questions.
When you say, "Make sure you get the clauses you want", what type of clauses should I be concerned with? Can you provide some examples?
Also I know my interests are in the NE sector of 34-17N-4W but I don't know the name of the well (or even if there is a well). I believe there are wells named "Katschor" on 34-17N-4W but I don't think there are any in the NE sector. How can I tell if there is a well on my section?
Does the compass designation indicate a literal division of the lot into quarters? Some of my other properties are further divided in a manner such as W/2 NE/4. Would this example indicate the "Western half of the Northeastern quarter?
Thanks in advance!
M Barnes said:
Offer is probably just a bit low. The first one usually is. Andy does work for Jackfork. They are land brokers that are hired by the oil companies to do the title work. Make sure you get the clauses you want, not what they offer. Jackfork will work with you up to a point. The going rates are $750 3/16 and $650 1/5 $0 1/4 from a recent pooling in the section 27 just to your north. You can lease or you can wait for force pooling. I think Sundance is out of Australia, but they have been in OK for a long while.
Friend me and I will walk you through it. Hit the blue picture icon and follow directions.
To catch up and learn about what is going on, I suggest you read through the last few months of Stephens, Garvin and Grady. Look in their discussion area-one of those has a tips for Newbies section. Also read the MINERAL HELP section above. Then read the last few months of Logan so you know what is going on in this county. There are some very important clauses that the "standard" lease you will get from a broker will either not have, only write to the oil company favor, etc. All parts are negotiable.
Yes, your description is important in some cases, but I will explain it in the friend reply. They want your acreage for a horizontal well, so not so important here. Talk soon.
Update on my original post regarding the lease offer I received on 34-17N-4W. Jack Fork retracted their offer during negotiations. Assuming Sundance goes forward with drilling, I assume I will be force-pooled.
I feel that I may have missed out on an opportunity. At the same time, I am surprised by how quickly the door closed on the opportunity ... essentially 1 week from initial offer before the offer was retracted. Are the terms of force-pooling likely to be better or worse than the terms of the final leasing offer ... $650, 3/16, 3 year terms?
Donald, From what I've seen as regards forced poolings the OCC will make the call and it will probably fall into the range that M. Barnes stated and will be based on what others have typically leased for in your vicinity.
One can't say for sure; it can certainly be less but I don't think you need to worry at this point (what would that avail?).
Hoping for the Best,
Regards
Thanks Steve,
One question ... how are mineral interest owners compensated in forced pooling? Is a division order sent to all owners regardless of whether there is a lease? Is there something I need to do in order to start getting checks from the operator? I would imagine a response to a division order would be all that is required.
Steven Holt said:
Donald, From what I've seen as regards forced poolings the OCC will make the call and it will probably fall into the range that M. Barnes stated and will be based on what others have typically leased for in your vicinity.
One can't say for sure; it can certainly be less but I don't think you need to worry at this point (what would that avail?).
Hoping for the Best,
Regards
You will have calendar 20 days, not working days from the date of the order to answer. They will offer several options. I usually take the lowest bonus and highest royalty option. Respond quickly by certified mail and keep a copy of everything you send. You should receive a check within 35 days if you picked an option with a bonus. If you picked one without a bonus, then be sure and keep that green receipt card when it comes back so that you will know they received your answer.
About four-six months after the well is drilled, you will receive a division order. Check to make sure the percentage royalty is what you agreed to, sign it (if it is on the NADOA form (come back here if it isn't)), attach your W-9 and you should get a check shortly after that.
With the plunge in oil prices, I bet the reason for the withdrawal is that they are shutting down drilling except where they have drilling obligations in contracts with investors. Otherwise, anticipate some very low offers, and much less activity over the next year or more.
Donald B. Megahan said:
Update on my original post regarding the lease offer I received on 34-17N-4W. Jack Fork retracted their offer during negotiations. Assuming Sundance goes forward with drilling, I assume I will be force-pooled.
I feel that I may have missed out on an opportunity. At the same time, I am surprised by how quickly the door closed on the opportunity ... essentially 1 week from initial offer before the offer was retracted. Are the terms of force-pooling likely to be better or worse than the terms of the final leasing offer ... $650, 3/16, 3 year terms?