Rick, I have been following the posts in the Stephens County forum. Just found out today from a cousin I have mineral rights in 35 13N 4E. Have not been contacted yet but my cousin has, she has been offered 125 acre and 3/16 not much, compared to the Stephens County offer. Guess we will find out about this area together. Will post when I know more. Hope you will do the same. I am new to this mineral rights stuff so don’t know a whole lot except for what I’ve been reading in the posts and such.
Virginia,
Our family has rights in 35-13N-4E. I have been following it and I have only seen 2 leases filed in that section. (there could be more signed but not filed). 1 was in the NW/4 the other in the NE/4. Both were leased to Upland Energy. Leasing has been more active in the surrounding sections. I have not seen any applications filed in the immediate area. I also have not heard from anyone wanting to lease ours.
There has been 1 permit issued for a 5100" well in Section 24 (2 miles)
Upland leased some state property about 10 miles away for $400 (3/16) in July. Bearcat leased some 6 miles away in May for $327. In March a bunch was leased for $450-500 within 10 miles. Jan $326, Nov $227, Sep $176, July 2011 $200.
Given that it has been going up on the state bids, $125 may be a little light.
We have less than 2 acres, so I’ll try to get a 1/4 with no bonus and the good clauses. I don’t see any leases more than 3/16 so that may be difficult.
Rick Howell said: Hello Rick, Thanks for the info. I do think my cousin signed a little too soon. So maybe by the time they get to me, I can get a better deal. We have 10 acres, will let you know when negotiations take place. I am calling Continental tomorrow and see what is going on in Stephens County, have 15 acres in SE 05 1N 4W. Have you heard anything there? I know they are getting close.
Virginia,
Our family has rights in 35-13N-4E. I have been following it and I have only seen 2 leases filed in that section (there could be more signed but not filed). One was in the NW/4, the other in the NE/4. Both were leased to Upland Energy. Leasing has been more active in the surrounding sections. I have not seen any filed in the immediate area. I also have not heard from anyone wanting to lease ours.
There has been 1 permit issued for a 5100’ well in Section 24 (2 miles).
Upland leased some state property about 10 miles away for $400 (3/16) in July. Bearcat leased some 6 miles away in May for $327. In March a bunch was leased for $450-500 within 10 miles. Jan $326, Nov $227, Sep $176, July 2011 $200.
Given that it has been going up on the state, $125 may be a little light.
We have less than 2 acres, so I’ll try to get a 1/4 with no bonus and the good clauses. I don’t see any leases more than 3/16 so that may be difficult.
There has been quite a bit of leasing by Continental in 5-1N-4W.
Thanks Rick! I haven’t heard from Continental yet. Been working with the landman at Jackfork Leasing. Since my inheritance (don’t think that is spelled right) is 3rd generation I have had to locate and get together death cert. and affidavits, so it is taking awhile to get to the lease. Haven’t been able to reach landman for a few weeks. That’s why I think I’ll call Continental tomorrow and see if they have received the info they need. Do you think that might be beneficial to see where they are at with the leasing process?
Rick Howell said:
There has been quite a bit of leasing by Continental in 5-1N-4W.
Rick, talked to Upland Leasing yesterday, they offered $150 per acre 3/16 3 yrs, with 3 yr option.
I told them some were getting as high as $400 per acre and they said that because they were planning on drilling several wells they couldn’t go more than that. lol They wouldn’t tell me who the operator would be, said confidential. lol. I told them I need to talk it over with the family before accepting their offer as more individuals are involved.
On the Stephens County rights in 5 1N 4W, Jackfork told me Continental was putting the lease in the mail and I should have it in a few days. Got good bonus 3/16 3 yrs and will have to wait till I get the lease to see what else it contains. About an extended option, after reading the Stephens County forum and what they are saying Newfield wants to do concerning drilling and the good wells they have been getting, don’t think I should accept an option. Could you please tell me what the Pugh Clause is? Do I need it or not? Thanks for any info you can help me with. Much appreciated.
Linda,
My family also owns minerals in this Township and I’m trying to get educated. Do you know who made the offer?
Thanks, Matt
Sorry Virginia, I missed this reply for some reason.
By itself a lease option is only favorable to the grantee. However, it could be argued/negotiated in conjunction with a higher bonus on the initial term (and therefore the extension term).
In other words; A company may be willing to pay $450 per acre on a 3 year 3/16 with a 2 year option. But they would only pay $350 on a 3 year without it. It is all a part of negotiating the best offer. In the above circumstances I would take the $350 – 3 Year no option, but a person has to choose what is best for their own situation.
Pugh clause: Let’s say you leased 80 acres, 40 in the SE/4 of the NW/4 and 40 in the SW/4 of the NE/4. They drill a well and the pooled unit is 160 acres, all the NW/4. Without a Pugh clause your 40 in the NE/4 is held by the production on the NW/4. With a Pugh clause you can lease it again.
Do you need it, maybe not. It would depend on the description of your tract. If it is N/2 NW/4 NW/4 NW/4 of Section x (5 acres) I would say it does no good. If you have an undivided 1/32 of the N/2 of Section x (still 5 net acres), absolutely! In many cases we are now seeing 640 acre units, so it won’t change much. But you never know what they are going to do with your lease.
Thanks Rick, sounds like we are talking big acreage here since I have 5 acres from grandpop and 10 acres from dad and several siblings to share with it sounds like maybe I should do a regular lease terms. The sibs have left this up to me to take care of as I am retired and have the time to investigate. We are all new to this kinda stuff and it was so long ago that dad and grandpop had these rights, I know nothing except what I have gleaned from the forums.
Sorry Virginia, I missed this reply for some reason.
By itself a lease option is only favorable to the grantee. However, it could be argued/negotiated in conjunction with a higher bonus on the initial term (and therefore the extension term).
In other words; A company may be willing to pay $450 per acre on a 3 year 3/16 with a 2 year option. But they would only pay $350 on a 3 year without it. It is all a part of negotiating the best offer. In the above circumstances I would take the $350 – 3 Year no option, but a person has to choose what is best for their own situation.
Pugh clause: Let’s say you leased 80 acres, 40 in the SE/4 of the NW/4 and 40 in the SW/4 of the NE/4. They drill a well and the pooled unit is 160 acres, all the NW/4. Without a Pugh clause your 40 in the NE/4 is held by the production on the NW/4. With a Pugh clause you can lease it again.
Do you need it, maybe not. It would depend on the description of your tract. If it is N/2 NW/4 NW/4 NW/4 of Section x (5 acres) I would say it does no good. If you have an undivided 1/32 of the N/2 of Section x (still 5 net acres), absolutely! In many cases we are now seeing 640 acre units, so it won’t change much. But you never know what they are going to do with your lease.
I would ask for the Pugh clause. Also depth, no production costs, and a shut-in clause.
What are those, can you elaborate on the depth and shut-in clauses. Thanks.
Rick Howell said:
I would ask for the Pugh clause. Also depth, no production costs, and a shut-in clause.