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  1. #1
    Join Date
    Sep 2008
    Posts
    13

    Question Options for Oil Well and Energy Royalties

    My question involves real estate located in the State of: Oklahoma

    My husband's family owns property rights for the stuff underneath the ground since his great-grandfather days. Occasionally he gets small oil & gas checks (nothing huge), his mother has received quite a bit more, some certified checks. He and his family have received letters occasionally to sell their interest - which they never have.

    I need help trying to determine if we should do something in regards to a certified letter (the families have all received). I have "X"'d the real i.d.'s and replaced names with " "

    " " Energy LLC, is herein proposing to drill a well in Section "XX-XX-XX" to be known as the " " well to test the " " formation. The anticipated surface location is 1,580' FNL & 330' FWL with an anticipated bottom hole location 330' FWL with an anticipated bottom hole location 330' FNL & 2,040' FEL. The estimated costs to drill the well are $560,523 for a dry hole with a completed well costing approximately $675,000 as shown on the enclosed AFE.

    " " Energy LLC's record indicate that you own or may own an interest underlying the captioned land, if you do own an interest, " " Energy LLC respectfully request that you select one of the following alternatives:

    1) Lease/Assign your interest in the captioned land to Penn " " for a bonus consideration of $125.00 per acre and a 1/8th royalty; or

    2) Lease/Assign your interest in the captioned land to Penn " " for a bonus consideration of $75.00 per acre and a 3/16th royalty; or

    3) Participate with your mineral interest in the drilling of the proposed test well by paying in advance your proportionate share of the completed for production costs. In the even that you wish to participate in the drilling this well an AFE will be forwarded to you upon receipt of your election.

    In order to commence operation on the subject well as soon as possible, Penn " " will be filing a pooling application with the Oklahoma " " listing as respondents all parties who have not reached an agreement with Penn " " concerning the exploration and development of the captioned land. The Pooling Order will provide a method for proposing and participating in subsequent wells by those parties who participate in the initial well.

    Please make your election. Should your election be to lease/assign your interest, Penn " " , upon receipt of these documents fully executed, will dismiss you as a respondent to its pooling application. Please be advised that your election herein does not excuse or allow you to delay your required election under the pooling application to be filed by Penn " " with the Oklahoma " ".
    AGREED TO AND ACCEPTED this ___ day of ____, 2008.

    end of letter


    <<< also there is an area to checkmark like this : ____ We are interested in selling our interest, please contact us to discuss.>>>

    What happens if we do nothing??? Should we checkmark something???

    we are not interested in participating in the well costs, or selling the interest. but we like getting oil and gas checks as before.

    Can you help clarify this so we don't make a mistake? anyone come across this before? he regularly gets quarterly statements and stuff - thank you

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Options for Oil Well and Energy Royalties

    Call them and ask them what will happen if you do nothing. If you want to exercise one of the options offered, choose it and respond.

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