Any thoughts? Getting offers for around 5k per acre to buy.
Thanks
I am north of you in section 30, 13/63, and have had purchase offers up to $3500, but never pursued them. Lease offers to $1700. Have you had any recent lease offers? Mike
Haven’t had any lease offers. But I’ve only known about the rights for a few months now.
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Hey guys,
Love helping out fellow mineral owners. Owning these rights can be very complicated and overwhelming, especially if you haven’t worked in the oil and gas industry in the past. For starters, DenverBob are you receiving royalties from the Fox Creek 504-2524H that is operated by Highpoint Resources? This well began producing in March of 2017, it was drilled 2 miles horizontally in the eastern side of sections 24 & 25 - 12N - 63W and is actively producing from the Codell formation. If not, then they have either missed you and you have money sitting somewhere in suspense, or your mineral interests are in the western portion of section 24 and you weren’t included in that well’s spacing unit. I would start by looking into that. And then I would recommend waiting to sell until you have a rig on your section drilling additional increased density or infill wells. Highpoint currently has 1 active rig in your area and is drilling a series of infill wells about 4 miles to the southeast of sc.24-12N-63W. In my experience, oftentimes the best time to sell is either when additional permits are filed - in your case there are additional permits but they were filed in 2015 and are yet to be drilled. When that happens it actually negatively impacts the value of your minerals, however, when they move their rig over to actually drill those wells the value of your minerals will increase. Given how many permits in the area Highpoint currently has it could be anywhere from 3 months to 10 years before they get around to drilling those additional wells in your section. As such, $5k/acre - depending on your royalty - seems fairly reasonable today but if you don’t need to sell I’d recommend waiting for Highpoint to move that rig over to your section and then sell for ~1.5X the current offer. Also, if you aren’t in pay for that Fox Creek well your minerals should be open to lease and I would recommend pursuing that option prior to selling.
Mike_Oberwise, your interests are close by but you are in a totally different situation. For starters, sc. 30-13N-63W is in Wyoming whereas sc. 24-12N-63W is in Colorado. The current political/regulatory environment in Colorado has negatively impacted mineral values across the state, less so this far north in Colorado, but still being in Wyoming makes your minerals more valuable than the minerals just a few miles south despite having similar oil reserves and geology. It looks like Anadarko has active permits for horizontal wells in this section, but they were filed in 2016 and 2017. Anadarko doesn’t have an active rig anywhere near this section, and it doesn’t appear this inventory is at the top of their list to drill. That being said, at some point in the future I would assume this section gets developed but it could be many years out. In the meantime, looks like there are no producing wells in this section should you be able to keep leasing away! Would need more info on the terms of the lease offer at $1,700/acre to say whether that is fair or not, that info being: royalty interest, primary lease term, option to extend, secondary extension term if applicable.
Hope something in all of that is helpful!!
You rock, great information. Really appreciate it. Two of my lots are on the eastern side, I think, 34.3 and 32.5. I haven’t been receiving royalties. Would I contact Highpoint?
Thanks for your time on this
Theodore, the lease is 4 years, no option, 19% royalty. What do you think? Thanks for all the information.
Yes sir, I think contacting Highpoint is where you should start. And if you are interested in selling it doesn’t hurt to ask them if they are buying minerals - if they are and you are wanting to sell they would probably be able to give you the best offer I’d think.
Not too bad - albeit I am not super familiar with current lease market in this area I would personally ask them for 22% and the same bonus/acre on a 3 year term with a 1 year option to extend and see what they say. And if you are getting hit up by multiple groups I would try to get multiple offers before deciding. If that’s not an option, I don’t think your current offer is unreasonable at all. Just my two cents, so take it for what it’s worth!