HI, I'm new to the group and I need help. I own a mineral interest in S 6, T 9N, R 8W and have been collecting a 1/8 royalty from United Energy, on well Horn 1-6 for a number of years. Now all of a sudden I'm getting offers to buy my interest. What is going on? Also, if a new well is drilled in S 6 is my current active lease binding even though it was signed in the 1990's? How can I find out the amount of acreage I own, my deed says Lots 4 and 5 containing 77.41 acres but the offers say I own around 10 acres and that there are other owners of Lots 4 and 5? This is very confusing. Any ideas what this mineral interest might be worth per acre?
John,
The acreage stated on most deeds are what is considered "gross" acres which can refer back to the size of the original surface acreage. As the minerals get handed down by way of inheritance or transfers the fractional ownership reduces accordingly resulting in what's referred to as net mineral acres (nma) which is what operators use to determine division order calculations. Most deeds don't have the nma information unfortunately so it often requires a landman or attorney to mine for this information. If you're fortunate enough to have all the original deeds in an actual file as I have you can often reconstruct that calculation yourself which is always a good place to start. I found an mineral deed error dating back to 1968 which essentially cut our nma in half........and it was in Grady County and right now that translates to potential big money.
Stay hooked into the forum and you'll get an idea of what's happening in Grady.
Yes - like Carl says deeds just usually say “All my interest” without telling you the detail – nice !!!
But you can find out if you search back in the County Clerks records for your section what happened over the years to your Mineral interest. What could make it very easy is if the people that say you own 11 acres – to make that research available to you… You could then print on-line the records for the past 20-30 years and have the court clerk print those older. It would probably be worth your time to do the research to find out ( verify ) what you own. Since the purchase price for Grady Minerals in running 15k to 30k per nma now… By the way if you sell - a very detailed search is done – and you may have to pay for that – if the buyer doesnt — T&C’s of sale
John, It looks like Linn Energy is going to drill a horizontal covering sections 6 and 7 in the Mississippi/Woodford. This is why you are getting offers. The producing wells around there are primarily gas wells. Someone else can probably comment on the geology better than I can. Whatever you are being offered is less than it is worth, but without a lot of big paying wells nearby I would make a guess at $10-12,000. an acre with it being leased at a 1/8 royalty.
Thanks Carl and Bud, your comments were very helpful. Looks like I may have to get a landman to verify my acreage.
Thanks Darla for your information about Linn Energy. I take it they haven't started drilling yet. I heard there was a well being drilled in the area or maybe even in S6, and first reports were not as good as hoped. Anyone know anything about that? Darla, I hope you are right on the value per acre, my two offers were both less then half that. If anyone else has any info, I'm all ears. Thanks again everyone-- JOHN
If you have time go by the County Clerks office and befriend one of the private-people doing research. You can probably get one of them to do the search for you for a fair price. The Clerks employees can help you get started if they arent too busy, but that is not generally the case these days....
You can get many years of records online from the Grady County web site -- Just enter your STR and names to search...
on the price - lots of people trying to get a deal with cheap offers - dont fall for it
The Horn 1-6 is a healthy well, so is holding your acreage at the original leasing royalty. You can contact United Energy Operating LLC and and ask for the acreage amount for free! At the top of your check or somewhere on there will be a phone number that you can call. Ask for the Division Order analyst for your section and have your operator number ready. Ask them for a copy of the original division order. Ask them for your acres and your royalty amount. The formula for the well royalty is net acres/spaced acres x royalty x percent of perforations in your section. Since it is a vertical well, the last term is 1.0.
Do you have a copy of the lease? Given the depth of the reservoir, the spacing is probably 640, but since you have lots, it will not be exactly 640 but the Division Order Analyst will have the exact amount. What is the decimal interest on your check? You have most of the info to back calculate the amount of acreage.
I am attaching the map for the original acreage. You can see that lots 4 and 5 are slightly less than 40 acres. Yes, there can be many owners as the original landowner may have sold part, passed down part, etc. I did the math for the section and came up with 638.77 total acres. They adjust the northern sections and the western sections of each township for curvature of the earth.
If I were guessing, I would guess that you might have 9.67625 acres. That would divide that original 77.41 into eight parts.
If so, then 9.67625/638.77 x .125=0.00189353. Does that match your check?
There is horizontal drilling to the north of you in sections 31, 32 and 33. Also to the east of you in sec 4. Pending horizontal wells all around you. Linn energy just got permission in January 2018 for a horizontal spacing of the Mississippian and Woodford zones for section 6. They were planning to drill a horizontal well. All the cases are still pending at the OCC. You should have gotten mailings. If you didn't, friend me with the blue icon above and I can send you the case numbers. You may have to get your address on file with the attorney.
That being said, Linn was in bankruptcy until recently. They are splitting up into two new companies, one for OK and one for Texas. So things are in a bit of a hold. If I were you, I would hang onto your acreage. The offers are usually lowball and they hope you don't know any of this information.
Calling the Division Order Analyst is free and will verify your acreage pretty quickly.
M Barns you are pretty close, my percent is .00205155. One of the offers said I own 10.4826 net mineral acres, which after reading your reply, I'm guessing is right. I have a brother and sister that own the same amount as I do and we are in discussion on what we should do sell or hold. I have never sold any royalties but money talks. I'm waiting to see if anyone ups the offer, it seems everyone on the Forum thinks the early offers are low ball, but your dealing with some unknowns. I guess time will tell. Thanks for your help.
Hi Bud-
Where are you going on grady to search records?
Here ya go:
https://www.idocmarket.com/sites
scroll down and find Grady, not as easy as OKCountyRecords, but it gets the job done…
thanks Cam