Oil and Gas Lease Insights

Oklahoma Mineral Rights Garvin County, OK
1

Hello everyone,

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?

Thank you for your insights!

2
  1. 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.
  2. 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.
  3. 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.
3

Could you please give the case # concerning your post.

Thanks