I own a little chunk of acreage in the subject line section as well as a little in adjacent sections for the same township and range. I inherited this from my grandparents over a decade ago and have spurned many offers to purchase these rights over the years as the SCOOP and STACK play has emerged. Recently, there has been a lot of activity and I have received a number of inquires and offers over the last week. My quick research indicates that some wells have been permitted, but I am struggling to find much more information about the permits and the operators. I know Camino and Jones Energy have done some permitting in the past.
Anyway, I just got an offer for around $9k per net acre. I work in the oil and gas industry as a Controller, so I understand the general thought it selling is not wise. Especially in a hot area like Canadian County. I am less familiar with Oklahoma minerals as my experience is Western Canada, San Juan, Bakken, and Permian. I am in a position where I would like to pay off some debts and have 3 young children to put into college. As a result I am starting to consider taking an offer.
Can anyone give me an idea for recent sales and valuations in this section or adjacent sections? Can anyone tell me which operators are actively drilling so maybe I can reach out to them about a lease before I am force pooled?
If you are a mineral owner in 7-12N-7W, you should have been getting quite a few mailings from the OCC for that section. You are getting offers because Increased Density orders have come out and they want your future royalties.
Camino Natural Resources received permission for the W/2 of 7 for an additional Mississippian horizontal wells and and original horizontal Miss well. Look up cased 201904932 on the OCC OAP portal. OAP
If you have minerals in the East half, then Jones Energy is wanting to drill on that half. They pooled back in August and if you did not answer in 20 days, they have assigned you a royalty/bonus pair already. That case is 201903397. The pooling pairs were $4000 3/16ths, $3500 1/5th, $0 1/4th. NO answers to pooling would have been assigned the 3/16ths option. So the offer is just over half of the 3/16ths offer. Anyone who was forced pooled may have money waiting for them with Jones Energy.
Jones Energy, LLC
807 Las Cimas Parkway
Suite 350
Austin, TX 78746
(512) 493-4479
Jones Energy has an Increased Density order from case 201902666 for one original well and four additional horizontal wells. Four of those wells have been spud and completed and they really hope you don’t know that. First Sales were October 15, 2019, so checks should be coming in about April 2020.
So the question is… what does that $9000/ac look like versus production from four wells? And are there more horizons other than the one they currently drilled?
That is fantastic information. I did receive some information from Camino for pooling orders and density requests, but had not seen any more come to life on the section. I knew Jones had filed some permits a while back. I received an AFE from them as well, but this was around the time of their restructuring and bankruptcy. I never received anything else from them and my messages with the Owner Relations Unit were never returned. I just assumed they didn’t plan to drill since they were in financial trouble. It sounds like I need to reach out to them again and ask if they have my lease bonus in hand. I do have a good friend there in the revenue department. Maybe he can help me get to the right landman.
Keep copies of every conversation or email or certified mail. You want to make sure Jones (or their successor) knows your name and address before the Division Orders go out. Make sure you and every other heir have their name and address filed in the Canadian County courthouse.
Great advice. Luckily I have kept everything and made sure my name was properly listed and filed at the courthouse. My sister originally owned half of the rights, but she conveyed her rights to me so I could make decisions for both of us. An added bonus was that filing was recorded in Canadian County so there is a recent record of my ownership. If Jones Energy did drill on my minerals, it will be hard for them to refute my ownership. I called and left them a voicemail today. We will see what happens from here.
Good luck! If you want to know what to expect with the Division Orders and how to plan for the financial situation in order to "render unto God what is His " and “render unto Caesar what is his”, I can give you some tips and then you should talk to your accountant and financial advisor about tax and probate planning. These wells may last for decades.
My kids went to college on the wise planning of my grandfather and mother’s estate plan. Now I am passing it forward to the next generation with my estate plan.
Thank you. Luckily, I have a good friend in the revenue department at Jones and he is working to determine how much money I have in suspense. Based on what I am seeing these 4 Phoenix wells are amongst the best Jones Energy has ever drilled. Ultimately, I think that means I should hold onto these rights as the royalties sound like they could be quite high. It sounds like the DO has not been finalized, so I still have time to get that done for disbursement.
Your information was extremely helpful for me to start tracking down this information.
Excellent. The Division Orders would normally go out by March so payment could be by April. If they are late, they will owe 12% interest on clear title owners.
In my experience, Jones will pay the interest on the second check possibly without being prompted. You might want to wait until you get that one before asking about it.
Well, I finally go ahold of someone thanks to my friend in revenue over there. You are correct that they have not sent the DO yet. I was not included in the distribution for paperwork because they are claiming my title is not clear. The attorney that did their title opinion didn’t look very hard. He only found where the mineral rights were conveyed to me via Quit Claim Deed from the trustee of my grandparents’ estate. The attorney said we do not own because the trustee did not own the rights at the time of conveyance. Both of my grandparents had passed away, and he was named the trustee and chairman of their close corporation with the authority to convey the rights and other property to me and my sister.
I found the 2 case numbers filed in the Canadian County courthouse and sent them to Jones so they can go find the documents proving the trustee had authority to convey the minerals to me.
In better news, I did get an I9 request from Camino, so it looks like they are planning to pay my lease bonus soon.