Well Proposal - How to proceed

I just received a well proposal from Trailhead. I don’t know this stuff at all and would appreciate any help in choosing the correct way to proceed. Location is 12E-8S-2E and All of Section 7-8S-3E

Any one else receive this with the 3 participation options? Is there already a thread on this? Thanks!

That is a typical form letter sent out before pooling and drilling. You do not have to answer it. I don’t answer them, but I do keep them for reference. They usually indicated that pooling will be soon and the offers will be close to those numbers. You can choose to lease with that company or you can lease with someone else if there are others in the area.

You should have gotten quite a few mailings from the OCC about the pending cases for coming wells. If not, contact the following: For Section 7 and Section 12.

XTO ENERGY, INC. 22777 SPRINGWOODS VILLAGE PKWY., LOC. 115 SPRING, TX 77389 Contact Name: ERIC HUDDLESTON Contact Phone: 405-232-3722

The initial hearings are in the next few weeks (unless they reschedule) and they will then do the pooling afterwards. If you have already leased, then you will not have to worry about the pooling. If you have not leased, then you have time to lease now or wait for pooling. Pros and cons to each, but I do not mind the pooling.

Thank you very much!

I received the same letter from Trailhead, as my family owns mineral rights in 12-8S-3E.

A family member who owns the other half of our 24 acres just signed a contract to sell his half of the rights. I haven’t decided yet if I want to sell our half of the rights outright, or just lease with bonus and royalties for the time being. Forced pooling also seems like a good simple option, with possibly less risk.

Yet, with yesterday’s oil market crash, everything seems up in the air now.

Thoughts?

Oops, I meant 12-8S-2E…

Our family has been in the oil and gas business for 100 years. These cycles come and go. We usually hang tight and wait them out. We will have to see what the Saudi/Russis kerfuffle brings to the world market. There will be some readjustments-to put it mildly…

Thanks for your insight!

We’re definitely not going to rush into any decisions made. We’re weighing all our options, which I have learned are…

Sell outright - quick cash. Lease with bonus and royalties - less cash, potential for royalties, but locked into a multi year contract. Caution must be exercised in the details of the contract. Wait for forced pooling - no cash, potential for royalties, not locked into long term contract. Seems the least risky option, and a good one if we plan to hold on to the rights for the foreseeable future.

I think I have that right…

Forced pooling also offers bonus and royalty with cash payments generally close to the going market rate at the time of the pooling.

Ah ok, good to know. Thanks for the clarification!

I’ve finally learned a little more about my family’s rights on the land. My father-in-law signed a 5 year, 3/16th lease back in 2016, due to expire in March of 2021. His brother will be selling his 1/2 of the rights.

My father-in-law and I have decided to just sit on it for the duration of the lease. With any luck, we’ll see some benefit if a well is ever drilled…