We have a total of 320.54 NMA in McKenzie & Williams counties. We have an offer for parts of what we own and were wondering how to best evaluate if we are getting a decent offer?
That’s the million dollar question. IMO your choices are:
- Take your tract listing to as many mineral buyers as possible and let the market tell you what a decent offer is
- Hire some technical person or “'advisor” to tell you what it’s worth or what the market should pay
- Wing it
Winging it. Per tract.
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PDP value per NRA: Take your monthly cash flow on those tracts, multiply by 48. Divide by the NMA. Multiply by the royalty rate as a decimal. Multiply by 8.
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PUD value per NRA: Count how many wells are in your 1280 unit. Subtract that number from 7. Take the remaining # of wells and multiply by $1200. That is your undeveloped value pNRA.
If the answer to (1) is zero, then the answer to (2) is pretty much zero in the Bakken. Alternatively, if your acreage is north of 158N or south of 146N or West of 100W or east of 91E then take the (2) answer and multiply by 0.33. Then add (1) and (2) together.
And there is an answer for value per NRA. You can convert back to $ per NMA by dividing by royalty rate and then dividing by 8. Assuming I did the math right.
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