Tribal Trust land survey

Oklahoma Mineral Rights Grady County, OK
1

I recently inherited mineral rights on 160 acres of tribal trust land. The land is 5 miles West of Minco, OK. Validus Energy offered my aunt and I several hundred thousand for a survey and we signed. We also agreed to a 20% royalty if they drill. I am wondering where exactly we stand as I know almost nothing about mineral rights. Is that a lowball offer for a survey? Is 20% royalty good or bad? It is my understanding that the BIA (Bureau of Indian Affairs) will not accept anything less than 20% royalty on tribal land. They also won’t accept any post production costs or recovery cost clauses in the lease.

I am also wondering if anyone knows what nearby wells might be producing? Is Minco a good area? Section 35 Township 10 North, Range 8 West Indian Principal Meridian. It’s my understanding that Minco is in the SCOOP, but I don’t know exactly what that means.

Any help would be greatly appreciated.

2

As to your specific questions;

  1. Is that a lowball offer for a survey? We should determine what exactly you signed first as I am not familiar with signing a survey when typically you would sign an oil & gas lease. However, if the lands are Tribal Trust lands, like you have mentioned, the BIA would be signing on behalf of the mineral owners, if the mineral owners are currently restricted. Specifics should be determined on this part especially since you say you have signed a document/survey.
  2. Is 20% royalty good or bad? I would say a 20% royalty is not bad and probably on the better side as the base is usually 12.5%, average today is probably 18.75%, and the high end is 25%
  3. Nearby wells producing? We would need a legal description for this to be more focused on the correct area.
  4. Is Minco a good area? - I believe the area west of Minco has experienced pretty good development but its a pretty broad question.

You say you know almost nothing about mineral rights so it sounds like you are in the right place with this forum. If you have a legal description on the paperwork like Section, Township, and Range, it would help.

1 Like
3

Thanks a ton for responding! My aunt did not sign an oil lease. (unless she is mistaken, was the $200k a bonus for a drilling lease, possibly?) It was a flat amount for them to survey the land, was my understanding.

I just found the legal description. It’s Section 35 Township 10 North, Range 8 West Indian Principal Meridian

4

It’s standard practice for the drilling operator to offer a lease bonus to the mineral owners in exchange for the right to extract your minerals. This sounds like what your Aunt received. The 20% royalty is her cut of the oil they extract, if any. They keep the other 80%.

1 Like
5

Ok, thank you. I am starting to wonder at this point what exactly she signed. I am going to contact her and see if i can get a copy of the agreement.

6

35-10N-8W- they are probably leasing for a horizontal well or wells. I moved your post over to the Grady County, OK area as it is more relevant.

If you are new to oil and gas, the Mineral Help tab above will be a good starting place. Good idea to get a copy of the agreement. Hopefully, she saved one. If not, contact the BIA to get a copy for her files.

1 Like
7

Thank you! The Mineral Help tab unfortunately is giving me error 404 on every choice in the dropdown box. Not sure what is going on.

8

I tried it and the same thing happened. I reported it to the administrator.

1 Like
9

Confirmed with the BIA that this was a mineral lease. $1,250 per acre bonus. 20% royalty. no recovery cost or production cost.

10

Keep that lease copy! Good to have the correct information.

The Mineral Help tab is fixed now.