I have 160 acres of mineral rights in Blaine County located in S34, T16N, R10W. There is a producing well from Newfield currently active. I have received several offers to sell, including the most recent offer of $2.1 million. It seems like a decent offer, even taking into account the recent permits filed nearby. Any advice or comments are appreciated.
Your good offer reflects a high confidence in your location. There have been some really good wells in the area.
If it were mine, I would still not sell. Keep in mind that for these hot areas, they will eventually drill multiple wells.
If you feel like you must sell, consider only selling part.
It's not that I need to sell exactly, I just wonder if it makes sense at this time. The single Newfield well has been the only active well here for quite some time now. I haven't seen any permits filed for the section in a while either. I do see the permits that have been filed nearby. Does that mean they are moving my direction? I'm in my 50's now. Don't really have 30 years to wait on a gusher.
The single well in your section was a Woodford well, drilled in 2011. It was not a very good well by Woodford standards. In your area, what they are going after is the Meramec (Mississippi) these days. There have been some really big wells, with dozens of wells drilled, being drilled or planned in the 17N-10W and 16N-10W and 15N-10W Townships, among others. Not only are they moving your direction, but they are surrounding you as you move out a few miles. Timing wise, your section is held by production (HBP); in other words, there is no urgency to drill yet. A lot of what Newfield is doing is drilling newly leased acreage, and this could go on for a couple of years. But eventually, I strongly suspect your section will get drilled for the Meramac, and potentially several wells could be drilled. You are not talking a 30 year timeframe, but you could be talking a few years. On the other hand, there are no guarantees in this business. In your location, I would not sell if it were mine. If you still are skeptical, and if the money would dramatically alter your life and waiting is not your strength, then you should do what you have to do. But keep in mind that if you sell, this is never an "all or nothing" proposition.