I’ve been approached about selling mineral rights in this area and wondering about the sudden interest. Is there anticipated activity? And, of course, I’m concerned about a reasonable offer.
Continental Resources is beginning to space and file for horizontal wells in the area. You need to get very informed about what is going on before considering a sale. The folks who offer are pretty sure they are going to make a profit off of you. You need to consider the needs of your family and whether you need to sell now or are willing to wait for royalty income that may possibly come from new horizontal well(s) in your section. First sales offers are likely very low to actual potential value and are just fishing to see if folks will bite.
Thanks for your comment. Do you know how this horizontal drilling of new wells might affect established wells operated by other companies?
The royalties on inherited mineral rights continue to diminish when passed on down the line, and seemingly the lease continues as long as a minimum amount is being produced. Eventually, one must wonder (as am I) if keeping the rights and passing them on are worth it.
If the older wells are in shallower horizons, they may not be affected at all. There are some rare vertical holes that may have been damaged by fracs of the deeper horizontals. That is in the courts, so won’t comment on it.
So far, in my acreage, the horizontals have vastly out performed the vertical wells. The vertical wells may only have 50-100’ of perforated interval (just an example). The horizontals have anywhere from 5000-10,000 feet of perforated interval. Porosity and permeability are different, but you get the drift. Also, when they come into a good shale interval in a section, they often hold the section by the first well and then come back and drill multiple wells lined up like cigars to drain the whole section. The horizontal wells can last decades. Most of the production is in the first four years, but having several wells producing at low rates can be nice. Invest the income from the early years and you can pass that along to the next generations as well. Pros and cons to both. If you consider selling, you need to get an appraisal and get legitimate offers. Most of the letters are not really offers, just fishing…
Thanks, so much, for your information!