I have received offers of up to $8,500 per net mineral acre, assuming a current lease of at least 3/16th royalty rate. In addition, EOG has filed for relief to the Corporation Commission for Multi-unit horizontal drilling. Incredibly, I called Echo, the company currently leasing, and their only lease record goes back to 1971 @ 1/8. I am scratching my head. Utterly confused would be a better word. I probably got the wrong person on the phone, and maybe should call again. Why wouldn’t they know what they are leasing it for? Of course, I inherited this have no record of the lease. Anyone out there with holdings in this area getting similar offers?
“I have received offers of up to $8,500 per net mineral acre, assuming a current lease of at least 3/16th royalty rate.” sounds like an offer to buy not lease your minerals. It appears that there are wells producing in that section that were drilled back in 1969 and hence your acreage is probably leased at 1/8th. Although there doesn’t seem to be any old verticals in the NE/4 where you have 53 acres, there is an old producing well in the SE/4 where you appear to have 27 acres. It also looks like the old spacing orders for that section is 640, so all of your acreage should be in the old vertical units.
As far as Echo’s response, many times a mineral buyer won’t run definitive title until a potential seller indicated that they are in-fact interested in selling - its a matter of time and cost allocation. Most of the time the seller knows their lease rate, however, with inherited property the unknown tends to pop up.
I presume you are getting checks (albeit very small amounts) - correct? If not, you may want to check with the secretary of state to see if there is unclaimed property in the name of the person you inherited the acreage from. When I scanned the county records, if doesn’t show when you inherited the acreage or from whom you inherited, so some digging maybe required. Do you remember how long ago you inherited it?
Thanks Jeffrey for your very informative reply, truly a breath of fresh air. Yes, I have been getting relatively small checks, and inherited it in 1994. And, as I recall, Echo was one of the companies who made an offer! So they are offering to buy what they have leased! If I’m remembering right, they did not stipulate the terms of the existing lease (i.e., 1/8, 3/16, etc), and the land man sounded pretty intense about buying it. (“We’ll do what it takes…”, he said) And what do you make of EOG’s request to the Corporation Commission for horizontal drilling?
EOG is very active in that area, I’ll take a look tomorrow and send you some maps as well
In the interim tell echo to send you a copy of your original lease and verify it’s 1/8th
Kelly, EOG has filed an intent to drill a horizontal well in 34-8N-4W. That is why you are getting the sales offers. Echo wants a piece of that well.
If you are not getting the mailings, look these three cases up on the OCC website and scroll down to the respondents list and see if your address is wrong, or your ancestor is on there instead of you. Contact the attorney to get it corrected. Put the case numbers listed below in the Case # box (one at a time) and you will see all the info that goes with them. The exhibits are quite useful. 201802155
It would serve you well to get some other offers to compare against the one you have from Echo, its always in the mineral owners best interest to collect as many offers as possible so you can have a better grasp as to what the going market rate is for buying in that particular area. Then you might be able to drive the price up by having two groups bidding against each other. Feel free to message me if you would like more specific advice on how to accomplish that.
Best of luck, Cam