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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 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 manage family mineral interests, and as a way to facilitate the buying and selling of oil and gas interests for other people.

Organizations
NARO, NADOA, AAPL

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

Education/Credentials
NARO, NADOA, AAPL

You are here: Experts > Industry > Oil/Gas > Oil/Gas > Oil lease offer

Oil/Gas - Oil lease offer

Expert: Frederick M. Scott CMM RPL - 10/29/2009

Question
I received a lease offer for an mineral interest in Lincoln County, Oklahoma underlying the NW/4 of Section 20-12N-02E. The offer is for 3/16 royalty on a 3 year lease with a $100 per acre bonus. Is this a fair bonus offer? Is the current production in this area?

Answer
Joan, if the lease is for shallow depths only (get a depth clause in your lease) then the bonus is probably about the going rate for the area. Most of the recent permits in this area are about a mile deep (not that deep) and the pooling bonus amounts for similar leases have been for $100 or less recently. BNW, Inc. and United Land Co, LLC are the only two lessees I see in your immediate area. It's quite possible that United was hired by BNW to get leases for them so there may in effect be only ONE company leasing in your immediate area currently. No competition for leases is not good.

There is some current production to the west of your minerals by a mile or two, and one decent gas well in Section 19, directly west of you. The "JB 1-19" is producing about 15,000 MCF of gas per month currently and a few truckloads or so of oil as well. It started producing in April of 2008 and has not declined much at all since then. Kind of unusual, but nice for the royalty owner and seems to be typical of other wells in this area that were drilled last year.

You can check these production figures yourself by going to the Oklahoma Corporation Commission oil and gas database page http://www.occ.state.ok.us/Orawebapps/OCCOraWebApps.html

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

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