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About Frederick M. Scott CMM RPL
Expertise
I can answer questions about oil and gas leasing, and give suggestions on negotiating a good oil and gas lease and how to best deal with oil companies or their representatives. I can answer questions about buying and selling oil and gas royalty or mineral rights. I can help with questions concerning forced-pooling, correlative rights, deeds and conveyances, and "post-production" costs. I am most experienced with Oklahoma properties and laws, but am able to answer questions concerning other oil and gas producing states in many cases.

Experience
I am a Certified Professional Mineral Manager (CMM) (certified by the National Association of Royalty Owners in Tulsa, OK) and have managed my own oil and gas properties in Oklahoma for over 10 years. I have dealt with many landmen, attorneys, and other oil and gas professionals in the course of doing so. I am also a member of several professional associations and have written articles of interest to royalty owners which have appeared in several industry publications. I have prepared deeds, title work, and done curative work for my own minerals; and have acquired a good deal of knowledge on the subject of oil and gas law and landwork in general in the process. I am the owner of Timbercreek Mineral Company, LLC; which was formed as a vehicle to better manage family minerals, and as a way to facilitate the buying and selling of oil and gas rights for other people.

Publications
National Association of Royalty Owners "Action Report" (ROAR); NADOA Magazine, Landman Magazine, and several royalty owner association group's newsletters.

Education/Credentials
NARO, NADOA, AAPL

You are here: Experts > Industry > Energy & Environmental Resources > Energy Industry (Oil & Gas) > Oil & Gas Lease in Washita County

Energy Industry (Oil & Gas) - Oil & Gas Lease in Washita County

Expert: Frederick M. Scott CMM RPL - 11/2/2009

Question
My family and I have been approached by a company that wants to lease the mineral rights for N/2 NW/4, Section 35-10N-18W in Washita County. It is .3704 net mineral acres. They are offering a 3 year paid up oil & gas lease and a 2 year option to extend. Bonus consideration is computed at $300.00 per net mineral acre and provides a 3/16th royalty.

When I questioned the man that sent the offer about it being a fair offer, he came back and said he could offer $400.00 per net mineral acre with no extension.

Since my family and I are totally unfamiliar with oil & gas leases (we did not know my grandfather had left this to his daughters until we received the call from the gentleman inquiring about my mother). I would appreciate your opinion on this offer.

Thanks & regards,
Marti

Answer
Marti, I'm really not too familiar with leases in this area these days, though I can tell you that both Samson and Chesapeake have leases in this section, though they were from 2008. Whitepool LLC and RD Davis and Associates (probably both land companies working for oil companies) bought a couple of leases in contiguous sections to yours in September. I'd contact all of these with your current offer and see if they'd be interested in leasing your minerals.

Frankly, with such a small amount (.3704 NMA) I'd just forget any bonus and instead try to get a 1/4 royalty. Even if the bonus were $600 per acre, you'd only get $222. If a producing well is eventually drilled, you'd get more money in the long run with no bonus and a 1/4 royalty I think.

Ask for no bonus and a 1/4 royalty. If they won't do that, I wouldn't lease to them at all, but that's just me. (I'd take my chances and wait for a pooling order to perhaps be issued, at which point I'd elect the 1/4 and no bonus option if available.)

If you want to learn more about land and leasing contact the National Association of Royalty Owners in Tulsa, OK. Their web site is www.naro-us.org and they have a booklet for sale called "Look Before You Lease" that I'd highly recommended to anyone wishing to learn the basics of oil and gas leasing from a mineral owner perspective.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
Timbercreek Mineral Company, LLC

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