First time poster here and complete novice when it comes to well proposals/lease options. Just received an AFE for some Mineral rights I inherited and not sure what to really do. Looking for some insights from people with more experience.
The location of the well proposal is Section 8-2N-2W, Section 17-2N-W, Section 20-2N-2W and will be a multi unit horizontal well to test the Woodford formation. I have about 2 net acres and participation costs would be around $11,000. Do people usually choose to participate? Does this particular area look like it could be a worthwhile return on an investment? How likely are they to ask for money on top of the 11k for other costs?
They offered lease options with a bonus, but no term on how long the lease would be: $1000 per net acre for 1/8th royalty, $750 for 3/16ths royalty down to $250 for 1/4th royalty. Do any of these seem like they are worth taking over participating?
participating in a well and certainly when you are a novice is a bad gamble. You could lose your money, it could get tied up for years, there could be cost overruns, all the above.
It appears you have a letter. the company is getting ready to pool you. Not a bad thing. During this period, other companies may approach you about leasing. You should seek professional advice if that comes up.
NOw, if you get a pooling order, you have 20 days from the signature date, not from receipt, not from mailing, but when the secretary signed it. You need to act on it during that time period.
Which section are you in? You should have already received the pooling case and the other cases if your address if properly filed in the county courthouse in Garvin. At this point, you might just want to wait for pooling and take the highest royalty. I have the case numbers if you need them, but need the section. The hearing for the pooling is next week on Sept. 30. DO NOT BE LATE in responding. If you need a template letter for the response, I just posted one in the last few hours for another forum poster.
Just curious Martha. Would like the case numbers for the well/s mentioned by JGlow above in Sections 8,17 and 20 in 2N 2W. We have interest in Sections 4 and 9 in 2N2W. Thanks
They are probably a little light in Rate, think a good bit of our stuff has been 1000/1/5 on recent stuff.If they are going to force pool it, well its a much longer discussion. But, If they are fishing for investment you likely do not want any part of it. My grandfather used to say, Working interest a’int for the working man sonny boy! With that, I do not know you or your situation so take it with a grain of salt. Yes there will likely be cash calls. As everyone with much knowledge will tell you, if their intent is to drill a well, royalty is where you are going to make your money, lots even forgoing any bonus, straight higher royalty. On a 2 NMA deal, you are’t going to make much on your Bonus check anyhow. Best of Luck!
The case numbers are 2024-003499, 003500, 003501, 003502, 003503, 003504, 003505, 003506, 003507 by Casillas. 20 also goes with cases to the south with Switchgrass E&P 2025-002729, 30, 31, 32, 33, 44. Casillas is now Validus, and the POOLING CASES are pending. 2025-002812, 002813, 002814. The hearing date is Sept 30 so answer on time!
You may have only gotten the letter that comes before pooling. I never sign any of those letters! Unwise to have your signature on a document with a promise to do something when you have not seen the actual document that will bind you. I will only lease or sign the pooling order.