Have mineral rights for S31T1NR5W containing 10 acres. Oil & gas lease is offering me $3200 per net mineral acre with 3/16ths royalty for a 3 year term. Is this a good lease and is this area being drilled on? Any info in this would be greatly appreciated.
Lee, that is a very high lease offer, given the general area, but there is a good reason for it. However, if it is the first offer, it is still low relative to what they probably will offer given enough time. The Woodford is very thick here. The drilling is moving in that direction. If I were you, I would only take 1/4, not 3/16. Time is your friend here. You may actually want to wait for Forced Pooling. Be very careful about the clauses for this one. You want a depth clause, shut-in limited to two years cumulative, no post-production deductions or limited ones. Do not warrant title. The lease they offer you is probably not what you want to end up with. This section will probably have production for a VERY long time. There may be some competition to get this lease. Take your time and get multiple offers.
If this is your first leasing in the area, go back and read the last six months of Stephens, Grady and Garvin activity to get caught up to speed. You might want to friend a couple of us if you still have questions.
Lee, The Blog has really slowed down over the last two or three weeks, so, even though I am a newbie, will give you at least a little suggestion…I think everyone is on vacation!
Check over the Blog (maybe you could even do a “search” on the Blog-I am not sure) for the lease offers people have been getting around you in sections 30, 29, 32. I can’t say, for sure, but I don’t think I have heard of this high an offer for leasing in this area. I could be wrong though…I have rights about 15 miles away (Section 17 1N 5W) so it is probably not close enough to compare, but five months ago leased for 2200 nma 3/16…two years. they are currently drilling, but not as yet it on the production stage. don’t rush into anything…one offer probably means others are coming, this shows they know something is coming! I hope you are not considering selling…the consensus on this blog seems to be…hold on. your situation may be different however…everyone’s is.
Consider going onto the OCC site and putting in your exact location…you need not fill in all the blanks. they ,itby show what activity is going on closer around you. Three of our fearless leaders have been mum as of late (M. Barnes and Rick Howell, also Clint)…I don’t believe it is due to any oil slowdown but rather a time to relax and regenerate in cool weather after a very, very busy few months! they will be back. good luck.
I think section 31 1n 5w is just 2 miles due south of 17 1n 5w. If they're offering 3200 at 3/16 sounds like they're expecting big things from the oceana. Hope things are that promising 6-7 miles due north of yall in 18 and 19 2n 5w.
Joseph, Thanks for correcting my mistake of how far section 31 would be from 17… I thought each township was a full six miles wide and long, so guess I mislead Lee. I am hoping you are correct about the success of Oceana, I have no clue as to where it is in the drilling process…do you?
Good to hear from you, Martha!
I read on stephens county forum they are at 13500 feet. I'm not exactly sure of the total depth before going horizontal but i think its in 15k range.
Diane Adams Trafton said:
Joseph, Thanks for correcting my mistake of how far section 31 would be from 17....... I thought each township was a full six miles wide and long, so guess I mislead Lee. I am hoping you are correct about the success of Oceana, I have no clue as to where it is in the drilling process.........do you?
It took me awhile to figure out the placement of sections and i still mess up. Lee is in the same township and each section is 1 square mile. section 30 is directly under 19 and 31 is directly under 30. Goes from right to left(east to west) 6 sections then left to right(west to east) sections 7-12 then right to left 13 - 18 then left to right 19-24 etc... starting st the northeast corner of the township. Thats stephens county anyway:). I hope i made sense with thaty explanation.
Here is the visual on STR
1661-STR.png (55.4 KB)
thanks, Martha
Also, thanks Joseph…I am starting to get a little bit of knowledge (that may be more dangerous than none!)
Thank you MB. Looks like I have a lot of reading to do. Not sure what a lot of the lease terms are. Your response is very informative Hold a lease at present with Marathon Oil on Section 36 1N 6 W. Have they started in this area?
M Barnes said:
Lee, that is a very high lease offer, given the general area, but there is a good reason for it. However, if it is the first offer, it is still low relative to what they probably will offer given enough time. The Woodford is very thick here. The drilling is moving in that direction. If I were you, I would only take 1/4, not 3/16. Time is your friend here. You may actually want to wait for Forced Pooling. Be very careful about the clauses for this one. You want a depth clause, shut-in limited to two years cumulative, no post-production deductions or limited ones. Do not warrant title. The lease they offer you is probably not what you want to end up with. This section will probably have production for a VERY long time. There may be some competition to get this lease. Take your time and get multiple offers.
If this is your first leasing in the area, go back and read the last six months of Stephens, Grady and Garvin activity to get caught up to speed. You might want to friend a couple of us if you still have questions.
Just a comment on activity in Section 31. Marathon has a Drilling and Spacing Unit hearing scheduled for August 12. They have already staked the site.
I got these same terms on sec 35...I inherited, so I have been "learning" as I go...Reading m Barnes, I realize I need to be sure I am understanding what I am reading on my leases. This is the biggest offer I have had in 4 yrs and they seem to be getting larger this summer....God be with us!