Drilling creates opportunities for mineral owners
EL RENO — A renewed drilling boom in parts of central Oklahoma promises hefty profits for struggling farmers and ranchers, but also could create challenges for land and mineral owners who sign contracts without fully understanding them, speakers said at a town hall meeting in El Reno.
A larger-than-expected crowd filled a conference room at the Canadian Valley Technology Center on Feb. 23 for the town hall presented by the Oklahoma chapter of the National Association of Royalty Owners.
El Reno is in the STACK play, an area that stretches over several counties northwest of the Oklahoma City metro area. Along with the SCOOP play just south of the metro area, the STACK is part of the Cana Woodford basin, which is the third most active oil field in the country, following the south Texas Eagle Ford and the Permian Basin in west Texas and southeast New Mexico.
The number of active drilling rigs in the SCOOP and STACK area has surged to more than 50, up 35 percent from one year ago, and some of the largest oil companies have announced plans to spend billions of dollars in the area over the next year.
“This type of royalty income can change lives of a lot of folks,” said Jared Boehs, owner of Edmond-based Cutter Energy LLC. “It’s also pumped money into communities, with crews eating at local buffets and moving to town and putting kids in schools.
“You have farmers and ranchers receiving royalties or surface damage compensation. That’s a shot in the arm now with commodity pries in the ag sector being down.”
Boehs’ company helps land and mineral owners negotiate oil and natural gas leases. While mineral owners can benefit from oil and natural gas production, they also could be hurt by the production deals, Boehs said.
“There are a lot of folks out there who don’t understand the ramifications of the documents they’re signing,” he said. “They need to be cautious and seek advice.”
Attendees at the town hall meeting asked questions about the going rate for oil and natural gas leases in certain areas and about what they should know before signing a lease. Many were enthusiastic about leasing opportunities in the area, but some expressed concerns about existing leases.
Boehs outlined what mineral owners should do before signing a lease. They should learn who is wanting to lease the minerals, do their research, request multiple royalty options and always ask for more money, he said.