Sec14-7N-9E, Hughes Co, OK

I have 2.5 net acres in this sec. Have received a notice of a hearing which was set for May 16,2017 for pooling of 640 acres horizontal drilling and spacing units by Corterra Energy,LLC.In the meantime I received a solicitation from Needham Energy Land Services of Oklahoma City to consider an OGL with them. Initial offer of $450 per net acre and 3/16, or$350 per net acre and 1/5 royalty. There is currently an active well on this location from which I receive a small royalty from another company. I have a couple questions if someone can help me. It appears Corterra will be drilling in the same area and perhaps there is no restriction to keep them from drilling there.I would assume the Oklahoma Corp. Commission would not allow for a pooling hearing otherwise. Also with such a small net acreage and limited background in negotiating oil and gas leases would it be better to go with the pooling decision here? I would also assume Needham may in turn sell my lease to someone they represent or back to Corterra. Can anyone help with some good advise, which would be greatly appreciated.

Robert Balir

Look at your first lease for the well that is currently producing. It depends upon the zone it is producing in. They can drill in other zones or in the same zone with correct spacing. Do you have a depth clause? If not, then you probably cannot lease again. If you do, then go ahead and either lease or wait for the pooling. With the small amount of acreage, you can either lease and get the terms you want or wait for the pooling-either way. Pros and cons to each. Since you received a pooling notice and a lease offer, they think you are open. The pooling order only gives 20 days in which to answer. I usually take the highest royalty and lowest bonus since they usually pays more in the long run. If you lease, you need to do it quickly before the hearing. Do not take the lease they will offer as it will probably have onerous terms which only benefit the operator. If you need help with the "gotcha" clauses, friend me with the blue icon above. You have a very limited time frame.