i inherited some land a few years back, and according to the paperwork from a previous lease i own part of this land, i looked up on the arcgis website and it shows a well drilled there but i havent received any royalties or paperwork about drilling there, how would i go about finding out if i am supposed to be receiving royalties or if i am reading where the inherited land is wrong?
First place to look is the NM OCD OIL AND GAS MAP. Google it . Find your section range and township . find your well in the section, click on the dot. It will bring up a route to all the paper work on the well and the production.
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I did use that map, but I guess a dot on my map is incorrect, that’s why I wasn’t sure if I had a well or not
The dot is usually the surface location. The direction of the well if not vertical is critical to whether you are owed any royalties. Some wells are spud in one tract, but all the perforations are in another tract. You have to have perforations in your tract to get royalties. Call the operator and find out if you are unsure.
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The documents that are listed for the well may tell you where it goes. Often there is a map showing spud site and location of the bottom. also info on which formations were aimed at. Also production from inception. Explore that pop up window.
There don’t appear to be any producers that you should have any interest in. All the HZ wells in sections 4/9 are Concho Fez Federal wells. But the ones in the Western half of Sec 4/9 pay folks that own in the Western half of those sections, and the ones in the Eastern half (would) pay folks who own in the Eastern half of those sections.
On map the light blue wells have been drilled. The dark Blue ones are just permits, have not been drilled. You are under the dark blue ones (pink blob is Lot 2). The existing Fez wells are pretty good, you’d think Concho will eventually drill the remaining permits.
Hope that helps.
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Can you tell me what you are using to see that or at least say if I should hold on to my mineral rights or wait? I’ve been getting a lot of offers, I own the east side, but the drilling is going on the west side of section 4
“I own the East side, but drilling is going on the west side of Section 4” Yep, you got it. Drilling occurred there and those wells are on production.
That map was pulled out of DrillingInfo, which is a subscription service that I have access to. Its nice because it shows where the horizontal wells are going, they aren’t just dots. Its expensive.
The decision to sell or wait is a personal one, dependent on your needs. Usually someone is offering to pay you a portion/fraction of what you would eventually get from the acreage assuming that there will be drilling at some point. But that fraction is paid today, and not over 40 years or whatever. If that fraction is big enough, it may make sense to sell to someone who is more patient or more willing to take on the risk that nothing happens and there is no royalty revenue.
If you have offers that mention a price per NRA (net royalty acre), I would think that the only ones to consider would be ones where that number is > $14k per NRA. This is just my opinion, not gospel or anything.
Some basic math in the West half, which is pretty well developed:
The 9 wells that came online in 2019 have made 1.6 million barrels of oil. They are good wells. The west half is 641.72 acres. A single NRA is one gross acre of land that you get 12.5% of the revenue for. So a single NRA in the West half would own:
1/641.72 * .125 = .0000195 of the revenue.
1600000 barrels x $40/bo * .91 (after prod taxes) x .0000195 = $11,300 per revenue already from a single NRA in the West half. And increasing at $1000/NRA each month, though that is declining.
So if somebody drills the hell out the East half of this area, an owner would probably be looking at > $30k/NRA of revenue over the first 3-4 years. The rub is that it might not happen. At one point in 2019 Concho had 19 rigs in the Delaware Basin, now they have 3. Concho has a lot of places they could drill wells. You push that drilling out until 2030 or something and that cash flow is worth a lot less today.
If you have a tiny amount of NRA then it might just be easiest to sell now after a bit of haggling. The more you have, the more I’d haggle or consider waiting.
Maybe that helps and doesn’t confuse the situation.
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