Received a lease offer from MP&K Energy for 4-3S-03W. $1250 for 3/16th, $250 for 1/4. Any knowledge of who is looking to drill in this area? Any input on this past experience with MP&K. Michael Raven is the landman who appears to own this company.
Several groups are in there leasing. My guess would be that Continental would be the operator. They have most, if not all, of the horizontal wells in the township already. Ask MP&K who they are leasing for. If you have not leased in a while, it would be a good idea to get a good oil & gas attorney to look at any draft lease. They are rarely in the mineral owner’s favor and need significant edits. You can choose to lease or wait for force pooling which has its own advantages. Most of us would prefer the highest royalty as royalties from a successful well or wells over many years far outweigh a one time bonus payment for the lower royalty.
That seems like a huge drop between the 3/16th offer and the 4/16th offer. It has been our experience that the drop is frequently only about $250 per 1/16th. If your numbers are accurate, they must really want you to be at 3/16th. Not speaking with any authority or knowledge on this particular lease, but it would seem to indicate there could be a lot of oil/gas to be taken. Would be curious to see what Martha thinks.
The operator would prefer that you lease at a lower royalty so the can keep more for themselves. Personally, I prefer the higher royalty choice even with a lower bonus because the royalties from the higher royalty over many years from one or more successful wells far outweigh the one time payment for the lower royalty/higher bonus pair.