I have minerals in carter county, Ok. I am told a horizontal well is to be drilled. Offered $750-3/16. I do not need the money and would rather have long term income. Should I try and get no money and 1/4 royalty?
Jay,
What is the location in Carter Co and have the revealed who the operator is?
Rick Howell said:
Jay,
What is the location in Carter Co and have the revealed who the operator is?
Jay ODaniel said: XOM and 20-5s-3w
Rick Howell said:Jay,
What is the location in Carter Co and have the revealed who the operator is?
Jay,
Jay,
I’ve been trying to follow some of the 3W play from Garvin Co down through Carter. I haven’t been watching that far south. We have rights in part of it but primarily in 1S-3W. I haven’t notice XOM directly in the play but XTO (XOM subsidiary) have been pretty heavy in Carter. Most of their play has been in the 1,2,3 E Range in the dryer gas zones. I think we will see several horizontal wells in the 3W over the next couple of years.
RD Williams has been leasing for XTO. In 3S-3W CLR has been leasing and CLR has a well in progress. Charter Oak and Citation are drilling verticals in various areas into multiple formations including the Woodford. Citation more so in 4W. I’m not sure if we will see CHK do anything or their acreage get assigned. If so it should happen within about 6 months as the lease start expiring soon.
Anyhow back to your basic question.
13 out of 17 of XTO pooling orders in Carter Co the last year have included a 1/4 RI option. 3 were limited to 3/16 and one had a 1/5 ($0).
In 20-5S-3W I don’t see any current lease with 1/4, I do see 1 with 1/5. And I don’t see an recent leases in the surrounding with 1/4. I do see a recent one in section 5.
In my opinion the only reason to try to obtain a 1/4 $0 lease is if that is the only way a 1/4 can be obtained. Generally if a 1/4 RI lease is given, they have to testify to that at the OCC pooling hearing. It then has to be offered as part of the pooling order. If that is the case you would likely come out better being pooled than any lease you could possible negotiate. First , your mineral rights will only be tied up for 180-360 days in a pooling order. Second, only those formations being pooled are impacted. Formations above and below are still free. With typical depth clauses, only lower formations are released but after the expiration of the primary term. With a pooling order you may even see some of the pooled formations being release.
So the only reason I would lease is if I thought I could manipulate it in a case where I thought 1/4 would not be offered. This is usually done by leasing multiple sections at the same time to avoid consideration by the OCC during the pooling hearing. With the limited number of leases filed, I would not commit right now if that is your plan.
I’m in a holding pattern on about 8 sections in Stephens Co for the same reason. I’m holding out for enough bonus to make it worth my while to lease at 3/16, or wait and take a 1/4 or in a couple of cases participate.
Also I think that $750 is a bit low if you decide to lease at 3/16. There are current applications on 27-3S-3W by XTO and CLR (fighting over it) that may reveal some hints in a couple of weeks. Pretty much everything recent and closer is vertical.
Rick,
We are working toward getting all our mineral rights in order (They were never really organized) and our next step is to start watching the activity. May I ask how you keep informed on all activity? What tools do you use?
Your help is very appreciated.