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Question
I own 180 net acres in Roger Mills County Ok. In 2010 I leased 40 acres Section 8-15N-23W with Summit for $900/acre 3/16 after costs. Lease up, still producing oil, natural gas produced for first 2 years of lease. I would like to sell all my acreage and have ongoing dialogue with Summit about this. Their latest reply:
"The acreage in Section 9-15N-23W, is the Section on which the Aderholt #1 well is located, which is being operated by RTC Resources, LLP.  This Section is next to Section 8-15N-23W, which we leased from you.  Section 9-15N-23W, is currently held by production by the Aderholt #1, which you are more than likely receiving production payments for.  The mineral acres in this Section was leased by your father on a 1/8 royalty, which is a low royalty rate on a well that is not producing very much.  We may have better luck if we remove this Section, and submit only the remaining Sections and leave Section 9-15N-23W out." My question: Can we get out of the agreement with RTC Resources? If so, what would be a good price for these mineral rights? Or should we be trying to sell them section by section?  Please note my father has been dead for 20 years and these mineral rights are part of my inheritance. Thank You.

Answer
The Aderholt #1 in 9-15-23 is indeed a pretty poor well currently, producing only a tad of gas each month and no oil from what I can see. The small 1/8 royalty is not helping you on this section so they are correct about that as well.

The well in 8-15-23 is not spectacular either, but is newer and thus producing more. I would classify the Wallice 1-8H as a small oil well (produces only about 800 BO per month looks like.

The Oklahoma Corporation Commission (the regulatory body for oil and gas in Oklahoma) has a wealth of information available online relating to oil and gas activity and production in Oklahoma. You can look up such things as drilling permits, recent production information, well completion reports, forced-pooling orders, and anything else that falls under their jurisdiction.


I am curious why Summit is wanting you to "leave out" section 9? If you want to sell both, then sell both.

As you may know, I manage the Mineral Hub website and among other things, we help find reputable buyers for people wanting to sell their minerals rights, without a lot of hassle. It's a free listing service used by buyers all over the country and I personally think that's the best way to get these sold if you want to sell them because you'll gain a lot more exposure to potential buyers that way, and we're based in western Oklahoma as well, which is where your mineral rights are.

What "agreement" with RTC Resources are you trying to get out of? I'm not understanding that part of your question. They are the operator of the well in section 9, but that certainly doesn't mean you can't sell the mineral rights you own there to someone. Who told you that?

As to what your minerals are worth, without having your listing on the Mineral Hub I can only give you a rough estimate, but frankly neither of those wells are very good and I don't see any permits for new wells so I'm pretty sure you're looking at less than $2000/acre for either section, and perhaps closer to $1200/acre or so for the one with the 1/8 lease. We can obviously do a more in-depth analysis once someone lists with us.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
www.mineralhub.com
The Mineral Hub  

Oil/Gas

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Frederick M. Scott

Expertise

Oil and gas leasing, lease negotiations, how to best deal with the oil and gas companies or their representatives, buying/selling mineral rights, 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 (NARO) in Tulsa, OK. I am also a Registered Professional Landman (RPL) with the American Association of Professional Landmen (AAPL). I have managed my family's oil and gas properties in Oklahoma for over 10 years and have dealt with many landmen, title analysts, attorneys and other oil and gas professionals in the process. I have written several articles which have appeared in various oil and gas industry magazines and newsletters. I have negotiated and drafted leases, prepared deeds, affidavits, and other legal instruments relating to my own minerals, as well as performed title, legal research, and curative work for same. I have acquired a good deal of knowledge on the subjects of oil and gas law, mineral appraisal, and landwork over the past ten years, and also worked as a professional landman and lease buyer for a time. I've seen the business from "both sides" and therefore feel confident I can help out most of the folks who ask questions in this forum.

Organizations
National Association of Royalty Owners (NARO); American Association of Professional Landmen (AAPL)

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

Education/Credentials
Certified Mineral Manager (CMM), Registered Professional Landman (RPL)

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