I own 50% mineral rights on 150 acres (26-02N-10W) in Comanche County, Oklahoma. There has been some drilling very near my property, but by the looks of the tanks and pumpjacks, it was a very long time ago. I see some heavy drilling a few miles to the east between Walters and Lawton, and it appears to be slowly heading my way. I don't really want to sell the mineral rights, but i have no idea what the value of the rights to the property is. Could anyone shed some light on activity in that part of Oklahoma?
Why sell them when you can lease them?
There you go, lease them to Tom.
We are definately looking at that. I haven't researched what leases and exploration is doing in that area. Any idea?
Tom Nystel said:
Why sell them when you can lease them?
For years there was the remains of an old wooden pump jack on the property. Land immediately adjacent to us had a small pump jack on it with a couple of tanks. I looked like it was from the 40s or 50s. Very old.
There was a dry hole drilled in 1977 and a well drilled in 1981 that only IP'd at 0.5 BOPD. I'd get Tom to lease them for you since no one else has wanted to in the past 31 years, he seems to know more than anyone else about leasing.
Thanks for the info. We have had that property since the early 70's and never had drilling activity on it, just near us.
I have some that have never been drilled on in 100 years that I'd like to sell but everyone here says never sell, perhaps he can lease them for me or all the ones that say never sell will buy them from me since they know more than I do. Everyone also says lease don't sell but not one of them will come and lease mine.
The well in 1981 was a Granite Wash called the Finley S Norton #1 and it was on your section.
Kelly,
There is some production on the 8 sections that surround you. They look to all be shallow and mostly in the 1000' to 2000' range. They are not much better than the 1981 well on your section.
I agree with Mineral Joe, people are quick to say “never sell” without knowing the owner’s situation or future potential of the property. The “never sell” statement is about as uninformed as the owner selling to the first offer that comes in the mail. I have never bought or sold any rights but plan on doing both someday.
In my amateur opinion; With all of the focus on the Woodford east of you, there may not be much for future activity on your section in the next several years (or few decades) unless there is a new discovery in the area. It is possible that one of the surrounding area operators might be interested in drilling some shallow wells on your area. I am working to arrange that on an area my family has. It is in about the same situation with stripper wells 100 yards away producing a marginal volume. The key to getting interest may be in the ease of getting control of the other ½ interest in the rights.
I don’t see any recent activity in your township (6x6 miles). I have to go all the way to Stephens Co in the 2N-9W and 1N-9W (or 3N-9W in Comanche Co) to find leases in the last 2 years but I don’t see permits or completions in the last year or so.
Maybe someone with some more knowledge of the fromations will speak up about the potential in that area, but it does not look like anything is close to being in the works for now.
Rick is right that there just isn't any activity in the area and he probably knows the area better than me, I had just looked at the area several times over the past few years when I had opportunity to purchase minerals there. There has only been a handful of wells drilled in the County in the past four years. Even Chesapeake tried their luck with wells into various formations and all the way down to the Woodford. There was activity looking for gas beyond that but nothing did very good. Only 2 permits in the whole county this year. There was a lot of excitement in the area a few years ago about the Woodford but it didn't pan out and everyone moved out.
I sold some minerals in various counties this year that were not in my core holdings just to get in on the last of 5% long term capitol gains tax before it goes way up.
Were the wells in the area really poor producers? Or were they mostly gas and too expensive to drill more given the current price of natural gas? Eventually the price of natural gas will go up. That will change the landscape of abandoned plays and there will be more money in lease bonuses and production royalties. Unfortunately, there are so many factors in getting that price back up to what it was in 2008 and before the glut in the market. I just mention that because I think to base a desire to sell on previous activity or disappointment is missing the balanced look which considers what may happen in the future. I've seen companies abandon good fields because with gas prices under $3.00/mcf the rate of return was nothing compared to gas priced at $11.00/mcf. Just something to consider.
All great comments from all and truly appreciated. I am familiar with that Finley Norton well site. Sounds like i shouldn't go out and buy that new Lexus!
Based on the production I'm seeing on the Findley Norton, I would not go out and buy a bicycle! ;)
Well, if you had production equipment from that long ago, it is likely that they got what there was a long time ago. If you decide to sell it, don't expect much. I have a piece in Hale County that is right on the edge of a production unit in the last throes of CO2 recovery . Nobody's gonna lease it or buy it, cause that producer got all the minerals down there already. I had another parcel in Yoakum County that I sold 30 years ago for $500 in a take-it-or-leave-it deal, cause I needed the money. It would be worth a lot more nowadays, but it isn't mine anymore.
Kelly David Cook said:
For years there was the remains of an old wooden pump jack on the property. Land immediately adjacent to us had a small pump jack on it with a couple of tanks. I looked like it was from the 40s or 50s. Very old.
The reason I say that is because producers back in the first half of the 20th century tended to pump as much as they could for as long as they could and often flared the gas production rather than try to sell it to a pipeline. What happened then is that formations lost gas pressure and got depleted quickly, after which the wells were abandoned. Re-opening those formations is possible, but it takes a serious effort - i.e. water flooding, CO2 injection, etc. Those methods usually require several injection wells for each production well, and those all cost the same to drill. If the formation got seriously depleted in the past, they may not feel that the potential for profitable production is there.
Tom Nystel said:
Well, if you had production equipment from that long ago, it is likely that they got what there was a long time ago. If you decide to sell it, don't expect much. I have a piece in Hale County that is right on the edge of a production unit in the last throes of CO2 recovery . Nobody's gonna lease it or buy it, cause that producer got all the minerals down there already. I had another parcel in Yoakum County that I sold 30 years ago for $500 in a take-it-or-leave-it deal, cause I needed the money. It would be worth a lot more nowadays, but it isn't mine anymore.
Kelly David Cook said:For years there was the remains of an old wooden pump jack on the property. Land immediately adjacent to us had a small pump jack on it with a couple of tanks. I looked like it was from the 40s or 50s. Very old.
Penny,
I like your optimism, please contact me as I have a lot of mineral tracts to sell you and I am a buyer of mineral rights nationwide, just not as optimistic.
Joe, I hope every acre you own is produced at every possible formation before you sell anything :) Don't get me wrong - I'm not advocating the "Never sell your minerals" philosophy. BUT the energy industry changes every day. More natural gas cars manufactured and fueling stations going up all over the place. Plus the big companies spend millions to change policy that benefits production. I may not buy minerals now, but if the price of natural gas triples there are counties where I'd make a stab at it because I've seen the actual production. Glad to lend the sunnier side of the discussion here :)
Prices are looking much better on nat gas, they even placed a fueling station in my small town. If they don't slow down drilling for oil they'll need to place fueling stations that pumps straight oil as we are starting to be burdened now by an overabundance of oil. Penny doesn't happen to be single does she, more optimism is something everyone needs more of and even with the clouds today this web page looks a little brighter with your comments.
Making high grade diesel and jet fuel from Natural Gas created some hope for me with natural gas prices.