US explorer Panhandle Oil & Gas said it has leased out the shallow rights to 2846 acres in the liquids-rich Tonkawa play in Oklahoma to a large independent producer for about $5 million.
Panhandle will keep
an 18.75% royalty interest from all future production; the deal does not
include any existing production or any of Panhandle’s booked reserves.
The Oklahoma City-based
company also retains the deep rights to deeper
zones, including the Hogshooter, Cleveland, Marmaton and Granite Wash
The leased rights
extend from the surface to 100 feet below the base of the Tonkawa, also known
as the Virgilian.
The acreage, which
was leased to an unnamed “large independent”, is in Roger Mills County, Oklahoma.
The lessee paid about $4.98 million for
the rights for three years, with an option to extend to a fourth.
The lessee also has the right of first refusal to the deep
rights, “should Panhandle elect to market any of these rights during the
primary term of the lease”.
"We have retained our rights to all formations below
these shallow leases, which in our opinion, contain the potential for multiple
producing horizons, and should yield better and more predictable well results,”
Panhandle chief operating officer Paul Blanchard said.