Oil company negotiation

Offered $25 per acre and 1/8 royalty on 45 mineral acres Leflore. Why so low and much negotation is possible with the gas and oil company?

Welcome to the forum. You may find the Mineral Help tab above helpful.

Lease bonus amounts and royalty offers vary depending upon competition, the planned reservoir and the economics of the planned well.

Yes, all terms of a lease are theoretically negotiable. If you have not leased before, it would be wise to get a good oil and gas attorney to review any draft lease. Most drafts are not in the favor of the mineral owner and need some edits.

If you care to post the section, township and range, folks may be able to comment on their offers.

Thank you. 3N 22E section 11.

The section immediately to the south (14) was just pooled for $25 1/8th, so your offer is competitive for the area.

In this case, is better to sign a lease or get pooled?

If I cannot get a good lease with the correct mineral owner friendly clauses, then I prefer to pool. If you have not leased before and have minimal acreage in an area with very low bonus amounts, then pooling is free while hiring an attorney might not be economically feasible. The draft leases from operators are rarely in the mineral owner’s favor.

This is a shallow gas area and it tends to have lower economics and royalties than some of the deep gas areas in counties to the west which pay better.

I appreciate your expertise.

I received the same offer for 6.5 acres in that section. Told them I’d lease for 25%, no bonus. I figured I’d get pooled.

Doubt you will get 1/4th in that county right now.

I don’t expect to - figured I would just get pooled.

Whitchurch: did u hear back from them? The company told me the 3 wells south of us are good producers dry gas

Haven’t heard yet. I wrote them November 5th

Glad to hear it - thanks for the info.
Are they CBM wells?

I dont know regarding the wells. Who did you send your letter to? I think I’ll do the same.

I got my first of two identical offers from Hugh L. Gaston IV out of Okmulgee. That’s who I wrote. The 2nd letter was from Walker and Walker, Oklahoma City attorneys. They offered to let me participate in a list of zones down to the Jackfork then Arbuckle Simpson and no, I do not think they plan to try to produce all these zones. Their offer to lease is for same terms as Gaston.
I have not seen a lease form. BTW, they are planning to re-enter a well. Viridis OK LLC will operate. Re-entry is risky.

I have a copy of the lease and it came from Gaston Oil and Gas. $25 and 1/4.

Sorry. I meant 1/8th.

I am going to answer the Walker law firm also. Gaston may work for Viridis or may not. I’ll give them the courtesy of a reply.so they can proceed with pooling, Ann Whitchurch

You’re not going to get 1/4 in Leflore. Is 1/8th the only royalty rate they are offering?

I said that above, Diesel. I will not agree to 1/8th. They can pool me.