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Oil/Gas/Ellis County Oklahoma

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Question
Hello Mick,

The mineral lease on our interest in Sec 24 19N 22W in Ellis County OK expired late last year.  When it was executed, the bonus was $550 for a 1/8 interest.  I just received an offer of $300 and 3/16.  The land man claims the company he is representing is planning to drill in the section this year.  Considering the state of the oil and gas market, what is your opinion of this offer and claim regarding plans to drill?

Thanks!
Ted

Answer
I wouldn't lease for more than three years, and if they are "planning to drill" later this year, then you may decide to agree to just 12 months, though of course you'd receive less per acre for the bonus for the shorter term most likely.

Lease prices have come down since you last leased, so I wouldn't expect to get what you received last time unless activity has picked up in the area.

You might check out our Twitter page to see if any lease amounts have been posted recently in your area. Go to www.twitter.com/mineralhub and scroll down the page a ways. If there are any recent lease offers posted for your area of Ellis County you can compare those offers to your own.

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

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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