Ok, I am going to try to explain my situation and would any insights that anyone would like to share with me. I own Mineral rights on land in Stephens Co OK. There was a hearing regarding forced pooling on this land on 8-18-14. I don’t know the outcome, nor do I know how to find out. Prior to this, I have received letters from companies wanting to lease my mineral rights. I was told by my cousin, who lives near this land to not lease and that we’ll get a larger % of money if we don’t lease. She said the production company that will be drilling ( continental resources) will give us our share , if there is anything to give us. Since the hearing date, I have received letters from 2 companies, stating that if we don’t choose to lease our rights, that we will end up with the smallest percentage and the largest cash bonus. Of course this would not be my preference (I’m ignorant, not dumb), but I have no idea what to do. If anyone could explain this to me in laymen’s terms , I would greatly appreciate it. Thanks for your assistance in advance. Sharon Darity (Clueless in North Carolina)
Hi Sharon,
If you will give me the legal description of the property I can look up this information for you.
What is the section, township, and range?
Basically, once the pooling order has been signed by the judge, you have twenty days to choose from the options offered by the judge. This is called making an election. They should send you the pooling order by certified mail. You write them back a letter informing them of the which option you choose. If they do not hear from you at all, yes, you will be given the lowest royalty and highest cash bonus. I can check the pooling orders in the area and give you a good feeling for what your options will be. The nearby sections are generally very similar in terms of pooling values.
Also, I've sen you a friend request.
Sharon if you would go up to the top of the page and go under groups and join the Stephens County Okla. group and post the same question you will receive plenty of help from very knowledgeable people in that group and they keep up to date with what is going on in that county and area and will help you will any questions you have.
Sharon,
It is a complicated decision. I find it best to first understand what Continental may expect from drilling on land that includes your minerals from industry experts. It is a site specific determination. Then understand your options (they go far beyond leasing or not leasing) and then apply the options to what your expectations are from the mineral gift your received. You will get lots of advice that applies to the advisor but you must do what is best for you. Do your homework. One solution does not fit all.
One thing is certain, you have minerals in a great area with long life. That is why Continental is there. Take advantage of the gift you were given.
Thanks Gary!
Gary L. Hutchinson said:
Sharon,
. . .
One thing is certain, you have minerals in a great area with long life. That is why Continental is there. Take advantage of the gift you were given.
Gary L Hutchinson
Minerals Management
Gary, could you expand upon the comment about Stevens County minerals having a long life? How well and how long would you expect recently drilled horizontal wells there to continue to produce? Thanks.
Cary
Cary,
Every area, every well, and every operator will act differently. The variables predicting the outcome are to numerous to list. With horizontal drilling and fracking experience, the operator creates permeability within formations that brings oil, gas and water to the well bore because the formation pressure is greater than the pressure in the well. Physics. The rate of flow to the well bore will be a function of the natural permeability in the rock and the created permeability. Physics. The operator will continue to produce oil and gas as long as it is able to sell the product for more than the cost of producing it. Economics. My expectations are based on the physics that the operator apples, which is both physical and economics based, and the research behind the application. The wells are so expensive and the rate of finding oil is so high compared to vertical wells, that I believe the operators desiring to perpetuate the company (not raise the stock price) will not drill a well in the Anadarko Basin that they don't expect to recover more than 150,000 to 200,000 barrels. If it takes 30-40 years that is OK as long as they recover the cost of the well in less than 4 years and people don't stop driving cars with internal combustion engines. If you are thinking of investing in a well, remember that you are investing in the operator. Similar to buying a stock; you are investing in the management of the company. Gary H
Cary Howard said:
Gary L. Hutchinson said:Sharon,
. . .
One thing is certain, you have minerals in a great area with long life. That is why Continental is there. Take advantage of the gift you were given.
Gary, could you expand upon the comment about Stevens County minerals having a long life? How well and how long would you expect recently drilled horizontal wells there to continue to produce? Thanks.
Cary