Thurmond Ranch wells

Oklahoma Mineral Rights Roger Mills County, OK
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I have inherited existing leases Roger Mills County, OK Sec. 24,33,36-13N-24W.

These are the wells, and they are only producing natural gas:

Thurmond Ranch #1 (Diversified Energy) sec. 24 500mcf/month average

Thurmond Ranch #2-24 and #3-24 (BCE-MACH) sec. 24 1500mcf/month average

Thurmond #1-36 (D&J Oil Co.) sec. 36 1000mcf/month average

Frostie #1H-33 (Mustang Fuel) sec 33 800mcf/month average

Signed a lease last year for my minerals in sec. 26, possible future oil and gas Mewbourne well location if drilled.

Looking at all the activity in OKCountyRecords.com, I see a lot going on but can’t make much sense of things. Two of the above existing wells have changed operators in the last six months. On the county records it is constant assignments, partial assignments, and it looks like many of the same companies keep swapping properties/leases back and forth. What are they doing?

Properties in sec. 33 and 36 have had “Top” lease offers, which I have looked into but not entertained.

With more wells getting drilled and great BOE numbers coming from these new horizontals, I’m anticipating action in the areas above that are held by production.

My concerns are I have no idea what terms are in the existing leases. Looking at the low monthly MCF averages and back and forth moving of assets, are these companies trying to hold my leases to sell them to new operators and lock me in to old 3/16 or 1/8 leases my father signed with terrible deductions from 1987-2005 for the future horizontal wells?

Is it not a completely different well from a HBP vertical to a 2-mile horizontal? Even if on the same or a different well pad? If located in the same or different geological formation, with or without a good Depth Clause?

Trying to sum it up, I see lots of activity in these sections and am confused about how this aspect of the business works. When wells should be or are close to being plugged and abandoned, with new drilling upcoming, while my existing leases are stuck.

I probably can’t do anything but wait and see, but I’d prefer to understand what I’m dealing with that may or may not be forthcoming. Any insight would be greatly appreciated.

Thanks!

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It is very common for wells to be sold over their lifetimes. The companies adjust their portfolios depending upon their strategy in an area. You can follow the form 1073 change of operator on the OCC well record site. Sometimes they assign leases, but the operator may or may not change.

I am not a fan of top leases as they can cause legal issues. I am attaching an article on the topic.
An Overview of Recurring and Related Issues Involving Top Leasing.pdf (210.2 KB)

You can look up your lease on the www.okcountyrecords.com if it is in the last few decades and digital. Farther back, you will need to go to the courthouse or ask the operator to send you a copy.

Yes, they can use the low volume old wells to hold the old lease until they drill the new horizontal wells. It is what it is with a valid contract. Lots of us are stuck with that situation. That is why getting good legal advice on signing any lease is very important. The next generations can be held by old leases. If you have a depth clause in the original lease, that can beneficial if the new horizontal well is below the depth clause. You can lease or pool again.

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In the previous Roger Mills County post, the conversation is about the nine new horizontal permits in 15N-21W and five permits in 14N-21W. Lots of active wells/lease overlapping in those sections. You stated, the sections in 14N-21W that are currently held by production have leases or were force pooled. What happened in those situations?

Does that mean these new wells are held by the terms of the lessors previous leases, or they negotiated/signed new leases, or they were force pooled into specific statutory lease terms if they did not respond?

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It depends upon the previous leases and poolings. If someone had a lease that did not have a depth clause and there are still active wells (such as the Thurmond wells), then they are most likely held by the old lease for the new horizontal wells at different reservoir depth. Lots of us are held by those old leases from decades ago.

If someone was pooled specifically at a higher reservoir and the well is still active, then only that reservoir is held. Other deeper depths may be pooled for the new horizontals. One must find your old leases or pooling letters to see what your family did.

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