Oil Activity Stephens County OK

#1

anything on section 26 1S 4W?

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#2

Black Mesa and 89 Energy have filed quite a few cases for 26-1S-4W. You should have gotten all of them by mail.

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#4

Misty, it would depend upon the section, township and range. Parts of Stephens are much, much higher than that and parts are lower.

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#5

The land is I’m asking about is in Stephens county Oklahoma 26 1S 4W

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#6

There are wells about to be drilled there. Are you talking about an offer to lease or an offer to buy? When there are wells about to be drilled, there can often be offers to buy come in the mail. In my experience, they are usually low as to the impending value of the wells. If the offer is to buy, I think it is quite low since the leasing offers are higher than that!

If you are talking about leasing, then the offer is low as well. A section next to you and was offered $2500 1/5 or $2400 1/4.

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#7

15 1S 4W in Stephens county I own a small portion of and Black Mesa wants to drill it’s about acre. We are taking no bonus and my part is .200 with 3 year lease 75.00% of production royalties. my question is this a good deal money wise? Help me understand this if you will. Thank you so much. Misty Minyard

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#8

Do you mean 0.200 acres? Or do you have a working interest? Are you getting the 75% or are you getting the 25% royalties? Or are you talking about a brand new lease? If it is a true lease, then you are on the 25% side if you are a royalty owner.
There is about to be a horizontal well here. You need to understand what you own before you make a decision. If you are a working interest, you will have to pay for your part of the well and then you will get the 75% royalty. What paperwork do you have?

You need to pay close attention to timing here. Black Mesa is pooling and so is 89 Energy. Whomever gets the order will win the operatorship. You will have only 20 days in which to answer the order by certified return receipt mail. 89 was supposed to have their hearing on Feb 4. Black Mesa on Feb 19. Not sure you have time to get a lease worked out in that short time frame, so you may want to check the pooling respondents lists and see if you are on the. 201900375 and 201900699.

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#9

this is what i have.hope you can give me some advice.#4 is the option we are choosing

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#10

OK, I thought that was what you were talking about. You do not have to answer this letter at all. In fact, it is pretty much a waste of time in my opinion. Put it in your files though. The pooling is any minute and you would have to answer the pooling anyway. So better to do it just once.

If it were me, I would keep the 1/5th option or the 1/4th option in mind. You would only get 20% of the royalties (they get the 80%) with option 3. You would get a bonus of $750 per acre. You would get 25% of the royalties with option 4 (they get 75%) and no bonus. I usually choose the lowest bonus and highest royalty because over time, the higher royalties usually outrun the bonus amount (if the well is successful). You only get the bonus once, but the royalties are for every future well under this pooling. I would pick option four, but wait until the pooling comes out since that is the official response. After the hearing, they will send you the order telling which company has won the case. You only have 20 calendar days from the order date (not the mailing receipt date) in which to answer. I always send my answer back by certified mail return receipt. I send to the address listed on the order and many times also to the OCC, to it is filed with the case.

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#11

Martha : how are those words: “proportionally reduced” to be understood ? Feels like a Trojan Horse may be, likely is concealed within. Thanks John

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#12

And “net revenue interest”?

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#13

What is the context for the “proportionally reduced”? I know what I am thinking of, but it may not be the correct context.

Net revenue interest is to the working interest owners. When you lease in OK, you essentially give them all your gross oil and gas from your portion of your minerals and in return, they give you a bonus and royalty of whatever they state and they retain the net amount which is usually close to 75-85% for taking the risk of drilling the well.

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#14

Those phrases are in the letter posted above pertaining to those Four (4) offer choices.

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#15

I haven’t seen it stated that way as often, but it may mean that the gross royalty is split into the two parts, low part for mineral owner and higher for working interest owners as stated in the options. I just never answer those letters.

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#16

Hello M Barnes; Just got in the web site for Stephens Co. Do you have to register with the forum for each county ? Just had an offer for section 1 that went up to a 1/4; haven’t seen many 1/4’s offered around the state; production must be pretty good on some of this stuff; HGH

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#17

I would agree with taking the highest royalties in a lot of the times. However, I got from someone some time ago with a very good analysis you can do to make your final decision. It’s on EXCEL and takes some time to figure out how it works and where to put the variables. But it gives you a very clear picture to help you for those decisions. If anyone is interested let me know and I will try to get to you either through this blog or your email. (I don’t know if your can put attachments here)

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#18

Welcome to the Forum. Suggest that you read the Get Started tab above and it will tell you how to get notices on news from Stephens and other topics you might be interested in.

Brock, the little symbol in the edit box that has a line and an up arrow is how you attach pictures or files. Or you can use the chain symbol for a link.

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#19

NMACalc.xls (43 KB)

So can you pull it up through this upload? If so, here it is.

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#20

Interesting presentation. However, how can there be such an Inverse relationship, ie Smaller RI yields Higher Payout ?

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#21

John,

If you play around with it awhile you will see that all three, bonus, BOPD, and Oil Market shows the split. Oh, and the other thing is the slope the output curve. I haven’t tried any changes in that. I don’t know enough to challenge the slope.

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