Section 17-12n-7w

I received certified letters from Paladin Land Group for Jones Energy LLC. I have no idea about leasing minerals and/or forced pooling. Can anyone help me with guidance as to which is the better choice.

  1. Lease/assign $2500 per net acre bonus 1/8 royalty
  2. 2000 with 3/16 royalty
  3. 1500 with 1/5 royalty
  4. Forced pooling with shared well costs of 14,609,312 (I do not understand this part either)

Any help is greatly appreciated

Is this an Order from the Oklahoma Corporation Commission?

No, letter states that Jones Energy has filed an application with OCC seeking approval of multiunit horizontal well and allocation of costs.

These are offers to lease your interest. How many acres you own may help you determine which offer works best for you. The per acre bonus is a one time payment, made upon execution of the oil and gas lease. As the bonus offers go up, the royalty you receive upon production being established declines. As the royalty goes up, the bonus goes down. Everyone has a different perspective on to take the money now (less royalty, higher bonus) or wait for production and if it is any good, take the greater royalty. The 4th option shown is if you wanted to participate with your mineral interest in the actual cost to drill the well, you would pay your proportionate share of the total well costs which are shown to be $14,609,312.00. If you were to participate, you would be paid a royalty of 100% versus one of the others mentioned. Again, everyone has a different perspective on the choices. If a well is drilled or multiple wells are drilled, the more royalty you have, most of the time that is good. If a bad well is drilled, the more cash you get up front the better off you may be. It is really a crap shoot but the offer for the 1/5th royalty is a little bit of both.

Good Luck.

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Thank you so much. The area they are talking about is in city limits, I own 1.5 lots, no where near an acre.

You actually do not have to sign that letter or answer it at all. It is merely an indication of planned activity. I do not sign them, but I do file them for comparison use. It gives a ballpark of what the pooling values may be. You can lease with that company or another company or wait for the force pooling. Just be sure if you do the pooling that you respond via certified mail within the 20 day time limit. Keep a copy of everything you send and you can also send a response to the OCC for filing of record.

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Looks like those offers are low balls… But I am not familiar with that Township’s activity… It’s not unusual for deals at 6K with 1/5 in parts of Canadian Cty. They send out these low ball deals in hope some will get accepted. Some of these offers are just flippers who will resale your lease at a nice profit. Have you got back with them saying you will take 6k st 1/5? What ever you do don’t give them a SIGNED lease before they have the Bonus in your bank… Get a cashiers check or bank wire… Read some of the sad tails on this forum about those that sign a lease and never get their money. It’s the wild west in the oil and gas business – don’t fall for their tricks… Looks like this is not a flipper since you got a Cert letter from what looks like an Oil Man working for an Oil Company? But still do some bargaining before you leap. And find out about the Oil company – are they real?

Thank you for you insight. I will wait and see what happens.

Thank you for your assistance. I have not signed or spoke with them or anyone. Just got this letter today. I will sit back and see what unfolds.

I look to see what the pooling orders in the contiguous sections within the last year-especially from the same operator. Jones pooled section 16 in Feb 2019 for $2800 1/8, $2700 3/16, $2500 1/5, so that gives a feel for the area. $6000 1/5th is not really reasonable for that area.

I received a letter as well in my grandmother’s name. When my parents passed away, they thought they had some interest in Canadian County but we don’t have any documentation. Is there an inexpensive way to research to see if my grandmother actually had any mineral rights that would have been passed to my father and then to his heirs?

If you received a letter in your grandmother’s name, then someone has done enough preliminary title work to show that she did have mineral rights at a first quick look.

You might try the Canadian county online records:

Try the unclaimed funds at the OK treasurer’s office.

Also try the MOEP site on the OK Corporation Commission site to see if there are unclaimed monies anywhere. MOEA Search

Contact the party that sent you the letter and ask them how much they think she had and what the location description says. It should have a section, township and range.

One you get a few clues, you can then ask for help on how to get the title passed to the proper heirs. Also try the county in which she lived to see if a will was filed and probated.

Don’t be afraid of contacting the people with the offer, just be ready to give them a number when they ask you what you want. Don’t be afraid of going too high – they are going too low. Remember you can go down not up… I have gone back and forth for weeks haggling on a price. Since you have got a letter something is up. You may be getting other calls/letters… Let them know you are interested in leasing – just not for a sucker number. Also, read in these forums about what should be in the lease – they will try to get advantage of you there also ---- insist on no deductions ( and numerous other details in an Appendix A )

I wasn’t able to send a PM. That is a generous offer to research the records at the courthouse on my behalf. Do you work in the oil industry? I don’t live too far so I could schedule a day to research myself if I know what I am looking for. If you can give me an idea of what all I need to be researching.

Thank you to all that replied. I appreciate the advise and tips for a rookie!

PM’s are generally not available here.