$4,500,025.00 cost
Lease for 3 years. For $450 per mineral acre. Reserving a 1/8 royalty. Delivering an 87.5% net revenue to company.
Lease for 3 years. For $300 per net acre. Reserving a 3/16 royalty. Delivering an 81.25% net revenue to company
Participate with my interest by paying my proportionate share of the estimated completed well costs.
No bonuses mentioned.
Morrey
Just from what you have written here I think you would do better on 3/16 in the pooling and I would certainly be inclined to wait. There may even be a 1/5 offering in the pooling.
Location would help as this could be very state specific.
Regardless, take your time and investigate your options carefully. Don't let them pressure into making an uniformed decision.
I went with what was on Morrey's profile.
we are new to the O/G game and have been offered a bonus on our mineral rights but we don't understand the terms used, for instance pooling. Like what is 1/5 offering in the pooling as stated above. We really need help.
I agree with r w kennedy, royalties are most always better than bonus. Location of the minerals would be helpful. However, if you have the money to participate in the well, and the oil and gas knowledge, and the investing sophistication, then participating in a well could work for you. You would need all those things, though. And if you're asking for advice here on this forum about which to do, you're probably much better off going with a lease.
Morrey's profile says he owns in Oklahoma and that is what i based my advice to him on. 1/5th would be a 20% royalty interest. Oklahoma has pooling of unleased mineral interests so drilling can move forward. Those pooled will be given a multiple choice of various bonus and royalty combinations from which to choose and a limited time period to make a choice or they will be assigned the highest bonus and lowest royalty 1/8th.
J.G. the best advice I can give you is to seek out the state and county groups for West Virginia. I believe that your best advice will come from those. It is always helpful to say what state your minerals are in and the best description you can give of theit location. Someone here knowledgeable may have the minerals right next to yours, but you will never know if nobody knows where your minerals are.
J. G. Morrison said:
we are new to the O/G game and have been offered a bonus on our mineral rights but we don't understand the terms used, for instance pooling. Like what is 1/5 offering in the pooling as stated above. We really need help.