What does sending orders mean?

Someone who represents the company holding my lease on section 27, 9N, 7 W called today and left a message that he wanted to verify my address because they wanted to send me "orders" and that it looked like they were going to drill on my lease. I have not called him yet. What does this mean? What are these orders called? Do they send something before they drill or is a division order something you get after the drilling? He did not say "drilling order" but just orders. My current lease expires in August. We had received a couple of calls with offers to top lease recently but had not acted. If we receive these orders do we have any time left to accept other offers or are we bound only to our current lease? Thanks. I am so new to this and it is hard to figure it all out. Paula Denson

No worries. A normal procedure of documents needed to get your monies. This is more accurately called a Division Order. No Notary needed. Just signature and maybe witnesses to your signature.

Don’t know about Top Leasing. Some say not a good idea. The Lease you have which expires in August may not officially expire as it may be “held in production”. Meaning your original Lease may state that the extension on your Lease may continue as long as there is production. However, there is sometimes a Bonus given for further extension of Lease. Any experts out there, please clear this up regarding Top Leasing and further bonuses.

Thank you. I still haven't talked to the person who called and he may have said "notice" instead of orders. Does that mean intent to drill rather than Division Order?

PAULA,

There is a small gas well owned by WESTERN OIL & GAS DEVELOPMENT CORP. 416 WEST MAIN OKLAHOMA CITY, OK 73102 Contact: RONALD J. CAREL 405-■■■■■■■■ that started production in 2014 and last produced in 11/2016. It is in the Hoxbar formation and appears to be falling apart.

Depending on the terms of your lease, you may get a Division Order from Western. The offers to top leases are likely in anticipation of your minerals being held by the Western Well becoming the property of the top lease to sell to Continental who is drilling Horizontal wells to the Woodford nearby. there go your profits if you top lease.

If you wait until your lease expires and then get a thorough understanding of what rights you have then you can make decisions for you not top lessees.

Gary L Hutchinson

Minerals Managment

Paula,

It sounds like the company was compiling its respondents list for filings at the Oklahoma Corporation Commission, and they wanted to make sure they had your correct mailing address. The company will send you notices for various (spacing, multi-unit, location exception, etc.) application hearings at the OCC. You will also receive copies of the orders resulting from the hearings

Thank you. What if we took an offer for an extension lease from another company and accept a 10% payment and then our current lease does begin drilling before August? What are the pros and cons? I believe our current lease says we do not have to notify the current lease holder if we take an offer to extend by another company. The company offering a current extension said they know they are taking a risk but if our lease holder does drill, we would still have that money plus whatever we would gain from the eventual royalties if the drilling is successful. If they drill and it is not successful, then we would still be in a lease with the extension company. Correct? I know my question is erratic but I am not sure what I should tell my siblings. They are tempted to take some money now but I am just not sure it is wise. If we receive the well notice and the company does not get started drilling until after August, won't the lease company probably offer us a new lease at a good price or is it more likely to backfire? Hope this makes sense. Do I need to get a legal opinion before they (or we) act?

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Paula,

It appears that you are now HBP by a well with API no. 35-051-23169 Don't give up your royalty rights by something called a top lease. You may be giving up you rights to future income from something much bigger. There is at least one good Woodford well east of you section. Don't compromise a big payday for a couple of pennies now. Your family will be very upset with you.

Gary L Hutchinson

Minerals Managment