Well proposal letter

Doubtless you have been asked this many times. I have scanned similar topics but don’t see quite the answer. When you receive a ‘Proposal - Well Name’, in this case, The Cowman 1-12H1x36, it’s a form letter with 4 options.

  1. Sell your mineral interests
  2. Participate in the drilling project
  3. Lease at 1/10 royalty for $450 3 year term
  4. Lease at 1/8 royalty for $400 3 year term

If you don’t want to sell or participate, you’re left with 3 or 4 or, don’t respond and be force pooled as a 5th option I am guessing?

Are the bonus offers, $400-450, in this case ‘locked’ or are you able to negotiate a higher offer? If you do not respond and are force pooled is the bonus more likely to be higher or lower than the offer?

I am sure this is a common question. Any way things like this can be ‘pinned’ to the top or is there an area on this site that answers these common questions? Thanks!

You are not required to answer this letter. I never do. It is an information letter only and is a waste of a stamp. The option #3 is a bit unusual. The minimum royalty in OK is 1/8th, so I find that odd. The letters usually indicate that a pooling may be soon. Most of my poolings after letters like these are very close to these amounts since they are from the operator. You may be able to lease with a third party who may or may not give better terms. I always ask for the options for 3/16ths, 1/5 and 1/4 to see what they say.

What section, township and range? We can look up other activity nearby and give you more information if there is any.

This is from Trailhead Exp., and is for the Cowman 1-12H1X36, 12 8S2E - 36 7S2E. Also, I previously leased this, signed the lease Dec. 2018, to RD Williams for 3 years at $500 nma. Apparently that lease agreement expired as no development took place. I would expect at least the same amount for a bonus as there is active drilling and, as I understand it, the ALMA 1, drilled in the same location, is a producer. Best option? Thanks for your help, as always.

The Cowman 1-12H1X36 has a surface location in 12, but very near the northern border and will probably not have any perforations in section 12. It was permitted 1/1/21 with a time to extend to 4/1/23. It will be perforated in 1 and 36. Are you in 12, 1 or 36?

Sect 1 and 36 were pooled on Sept 1 at $1200 and 1/8th, $1000@ 3/16. The 20 days to reply as passed, so if you did not lease then you were assigned the 1/8th option. Was your name on the list for the Mississippian? Looks like a second cleanup pooling is set for 10/17/22 for sec 36.

Very interesting. We have minerals in both 1 and 12 8S2E. I just received the proposal certified mail on Monday 9/19, and have not had the chance to reply. Are you saying that they have already force pooled those owners in 1 and 12 that have not replied? And that the pooling order terms were that those owners be paid a bonus of $1200 per nma and 1/8? Our lease of 12/18, was for 3/16. This proposal letter is our first and only correspondence with Trailhead re: The Cowman. We have received nothing about ‘the Mississippian’. Is this a new formation they are leasing? Our original lease was for only the Marietta - Woodford.

Did you get the pooling notice for section 1? Alma was spud 9/15/21. It would have been within the terms of a lease in 12. Did you have two separate leases or one for both sections? If you had both on the same lease, then section 1 was held by section 12. If you had a separate lease for 1, then it is open. The case for section 1’s next pooling is 2022-003855 Electronic Case Filing Use the blue option. The earlier pooling was first opened in 2019, so your name was probably not on that list. Its number was 2019-005338. Another one was in 2021 Case 2021-001843.

Section 1 and 12 were separate lease agreements, same company, 2 separate landmen, 2 separate leases, same terms for each lease. Both leases were signed in Dec. 2018. When I heard about the first pooling I reached out and spoke with the same person who signed this recent proposal letter. He told me as I was leased, we would be on the respondents list for spacing, not the pooling list. That was January of this year and I had not heard from anyone since until this proposal letter. So minerals in Section 1 are no longer under lease but our lease agreement for S12 is still held? And, as a part of my earlier question, it appears waiting to be pooled is the better option as they are paying $1000 bonus and 3/16 vs $400 and 1/8? Or do I need to call them? Thank you so much for your time and expertise.

Look up the new pooling for sec 1 and see if your name is on the respondents list. Check the one before it as well. Then you might have to call Trailhead to find out what your options are.