The only well I see in the section was plugged in 1993. There are a few in the 8 surrounding sections (sections 13 and 14) that are producing. Continental has leased some in that section. Evidently Mountain Resource thinks it is worth more than $2800 an acre or they would not have given you a cold call offer on it. From the report Continental released recently, it does not appear to be as desirable as some of the other areas but it is still in the Woodford play that is getting all of the attention in the area. A conventional well on it could easily pay back that 2800 per acre in less than 3 years. A “good” horizontal well in the Woodford could pay it back in 6 months.
Here is a link to Continental’s report.
You’ll get people telling you not to sell, not matter what. It is a personal decision for you to make. They may drill a well on it in 4 years or it may not see one for another 20-30 years. If you do decide to sell, you want to make sure you know what you are selling. I’d also suggest marketing it to others instead of simply taking an offer that was mailed to you.
Collectively 5-6 acres is not that small. Even 2 acres may not be with the right well.
Since the 1st of September there have been 12 permits issued to drill in Grady County. If I were you I wouldn't be too anxious to sell. Royalties some day soon could be very rewarding. If someone is willing to pay $2800 per acre they may know something you don't know. My advice is keep reading those posts/blogs and never sell your minerals. Good luck.
Jay-That property is immediately east of what has been a very active time in 7N-6W. Several wells are now down there and producing. Not what we in the indurstry call "barn burners" but still good wells. There are a couple here that can chime in about pooling and permits to drill in that townwhip.
However, that offer of $2800 per net mineral acre is not bad. I think one of the members here calculated that at a 18.75% royalty and todays prices one mineral acre would pay about $120 per month on average. This number would be in a decline over the first year and continue that decline for the life of the well which could be 10 years.
6 acres in the first year could pay $8640 based on the $120/mo estimate. It could be 50% less than that in the second year and would be declining at some rate in the following years. The offer to buy is worth $16800 now for 6 acres.
You have to choose between taking the cash now or waiting to collect the same amount in the first three or four years of production. Pooling and obtaining a drilling permit looks like it would take most of a year at the pace I observe in Oklahoma. The well would take 4 months to drill, equip, frac and complete. Then the operator has the right (and will) to hold up paying royalties for 6 months. So you could be looking at the better part of two years from the time you make a lease to be able to collect any ruyalty payments.
Gracie Continental make a five year lease with Sheridan Prod. for all their Woodford interest in 5n5w so they must think it is in the "Scoop".
Looks to me like all of Grady Co. is in the "Scoop" on this map. Is 5n5w in Grady?
Sounds like you are in!!!! Continental is the one that gave it that name. Newfield and Continental are doing nearly all the work in this area here around Lindsay as far west as Chickasha and maybe further but I haven't been any further west to check it out. So get ready and Best Wishes!!!
Thank you all for responding. Sounds like good news! I will keep my fingers crossed.
Where do you get your information? Is there someplace I can keep track of this?
Gracie Troini (Turner)
Yes. It has been leased since 1992 and has been producing since about 1993 (less and less). First leased by Anadarko, then sold to EXCO, and now Sheridan has it. Seems like I should get lease money when this changes hands but I guess not. Can Sheridan lease it to Continental or does it have to be sold to them (that is Sheridan's drilling rights).
Gracie I could find no well in the sw/4 Those wells are 160 acre spacing, so your interest in sw/4 may be available to lease. Who signed the old lease and I will see if I can look it up. Sheridan has leased what they have of 10 to Continental. which should be the north 1/2 of 10.
I am somewhat confused.
What I gave was the legal description of the mineral deed I have. I also have a legal document from Anadarko changing the spacing to 160 acres underlying an area adjacent and contiguous to the N/2 of Section 10, Township 5 North, Range 5 West, Grady County, OK. It also gives a depth at which Anadarko expected to encounter a commom source of said area. Sycamore is 12,100 ft and Woodford is 12240 feet. Does that mean if they goes deeper it is not a common source?
Gracie if I send you my # in a friend request would you call me ?
I would like to follow up on the above. The legal description on my mineral deed is as follows: The N1/2 of NW1/4, and the N1/2 of SW1/4 of NW1/4, and the SE1/4 of NW 1/4 of Section 10, Township 5 North, Range 5 West, Grady County, Oklahoma.
The existing lease, which I signed April 24, 1991, was sent by Beacon Land Consultants, Inc., 809 SW 89th, Ste.G., Oklahoma, City, OK 73139. The legal description is a little different. The lease shows the N/2 NW/4 & SE/4_NW1/4 & N/2_SW/4 NW/4.
Are these two descriptions the same?
Anadarko drilled the well in 1993 and the spacing was changed to 160 acres by Anadarko.
Also, per your above reply, can you tell me if the SW/4 is available for leasing?
Could you look this up and advise?
Thanks so much for your help. I do appreciate your patience with me.