Forgive me if you read this in another county, but these folks popped up in Kingfisher and Garfield making offers.
This is a caution note to folks who may be getting offers from a certain company that has a $500 Collection item attached to the bottom and a teaser of $3,000,000 at the top. It shall remain nameless since I have had similar offers from two companies like this- same font, same wording on the offers, two different addresses, but very close in proximity in location. I have run into these guys before and I am sure they have a herd of attorneys. Please read any offer like this carefully. Note that they want you to grant them power of attorney, agree to their mediator, their venue. They can withdraw the offer at any time. They want you to hand over a signed conveyance without getting any money. (I would never hand over a deed or a lease without getting money at the exchange.) Note that the draft does not specify how many days until it “might” be able to be cashed. They want a deed, your 1099’s, your leases and your social security number and never tell you when they will pay? What are they going to do with my SS#? (Personally, I am very cautious as to who gets to know my SS#.) They want you to do their title work for them. Sounds suspicious. If you even consider this deal, talk to an attorney first. Tell the attorney to check the company with the Better Business Bureau and run a check with the Attorneys General of OK and KS. I have.
Now lets get to the offer. They want me to multiply my decimal amount by $3,000,000 for a well that stopped production years ago. If I did their math it might be for about $15,250. Sounds odd for a well with no production. But they really want my acreage. A brand new horizontal well in that section has paid me about $8530 for just seven months of production (plus another 12 months I haven’t looked up yet) and there are four more pending horizontal wells in the section. No way would I sell. These two companies have sent me multiple letters over the years offering to take “old” wells off my hands. In every single case, I have not even answered them and have had very nice horizontal wells-many times multiple horizontal wells- follow soon after.
I have wondered if all I would actually get would be the $500 check with no recourse.
I have marked over the pages of the offer in black magic marker DO NOT DEAL and made a note in my files so that my children will be aware to be careful about “deals” like this.
Please check the reputation of any company that offers to buy your minerals. Get offers from several companies if you feel you need to sell. Check with the BBB and Bizapedia or other rating systems. Reputable ones (and there are many) will do their own title work and bring a check when they exchange for the deed. Learn about your area. Check the investor presentations of the operators doing business. See where they are doing drilling next. Check the OCC well records in the sections around you to see if horizontal drilling is coming. Ask questions on the forum. Be mindful if you have relatives and friends that may not be as watchful as you are. We have to be energetic in protecting our mineral stewardship. Just my opinion on the subject.