I wouldn’t sell my minerals until I had some production information. If your share brought in 1500 a month you would realize the same amount of money you received in selling in 3 years. To me that says keep the minerals. Just my opinion only.
Trust me. I am in Dallas at the NARO Convention. None of the old heads have seen the prices offered. Up to $30,000 an acre. That is insane and not justified by anything but the number of wells about to drill from a single pad. Otherwise, i’m like Jim Cramer…“sell sell sell” buy something else. Economically this gravy train will end and do so rapidly and go back to well under $5000 an acre. IT WON’T LAST FOREVER. The Koreans and Chinese are backing the drilling and it is insane what is happening. @geoappraiser
That’s great news Jim ! Surely Newfield will loosen up and release the production on the Brown Farms well ! Thanks.
Thank you, Ms. Barnes, for your response. The offer was the second offer, but may not be the final one. How do I access the investor presentations? Thanks.
For the investor presentations, just search for the Company name in your browser and then look for the investor tab, then “presentations” or something similar to that. They all use different words. You want the Q2 presentations or the recent Barclays or other financial presentations. You can download them. I find the maps quite useful. Here is a Blaine Map which you can use to find your acreage and then compare to their maps.
Lanny, that means they are allowed to deduct everything up to and including the kitchen sink.
Every post-production clause benefits the oil company. The leases are misleading. “Enhancements” is ill-defined, undefined in most states. “Marketing” is another catch all. And if all fails you fall back on the Chesapeake way. No deductions, we just pay you based on a price we pull from the air that is net to the end buyer…say $0.54 when the “market price” is $2.90/MCF.
Make them sign something identical to the Texas Land Office lease and see if they want to try and circumvent that.
I am wondering about the following sentence in a lease agreement regarding an oil company NOT being able to deduct certain costs, except as described;
" However any such costs which result in enhancing the value of the marketable oil, gas or other products to receive a better price may be deducted from the Lessor’s share of production so long as they are based on Lessee’s actual cost of such enhancement as directed under the provisions and findings of Mittelstaedt vs Sante Fe Minerals, Inc., 1998 OK7, 954 P.2d 1203.
Thank you gentlemen ! The clause I’m referring to is for a lease in Southern Washita County, where there has been no activity for years. I don’t have much bargaining power, and I’m not sure which way to turn.
Dear Mr Sells, you do have some leverage. If these are gas wells then you need to avoid as many deductions as possible. The operator will want to charge for gas marketing and gas processing. Once the flow declines, the gas processing charges take up increasing amounts of your royalty payments. If you cannot get the deductions removed, then offer to take a slightly smaller royalty without deductions. You should always be able to get 3/16 with no deductions. Every State of Oklahoma lease is 3/16 with no deductions and every operator in the state is happy to get those leases.
Thank you Stephen Weeks, I’m going to work on it.
I would sit on it rather than sign any old lease. CHK and others are moving away from the water rich Mississippian rocks and hunting in less watery wells. State lease is superior to negotiated lease.
Does anyone know if there is any intent on new drilling in or near section 24 of Blaine County soon? East of Watonga.
Ryan, please give the complete section-township-range. There are quite a few section 24s.
J W…Thanks for the information
NW/4 28-16N-12W…
Orren:
You didn’t specify the S-T-R, so these will be general comments for Blaine County.
You’re going to be paying capital gains on most of this sale. Mineral values have gone up significantly since 1998. The basis in general would be 3 to 4 times the going lease rate at the time. We had some Blaine leases with bonus rates of $250 about 15 years ago. So, I think in round numbers you could value many Blaine County minerals at $1000/acre during the 1998 timeframe.
This should give you a ball-park way of valuing these minerals, which you can refine as needed.
Mr Veatch, you need to speak to an tax professional about the cost basis of your minerals. Mr Anderson’s reasoning is sound for placing a value on minerals. However, if you got title to them in the past as a gift (being added as a joint owner) then the basis is a share of the owner’s basis at the time of the gift. Ideally, the grantor would let you know their cost basis for any gift. If you inherited them, then the basis is “stepped up” to the current value at the time of death. The stepped-up basis rule exists to avoid fights with the IRS on the cost basis of assets from long ago where no one has any good records (but has the effect of avoiding permanently any capital gains taxes on appreciated assets). Without good records, it just becomes a pissing contest with the IRS.
Question regarding basis in inherited mineral rights. There was no probate, my grandparents put me on as a Joint Tennant, so was passed to me on their passing,in 1998. I am selling 20a…sale price of $13,500/acre. I am keeping the majority, but in need of some money at this time.
I’m pretty sure the IRS allows you to inherit $5.34 million before they want a cut. If it’s a gift, or if you need to figure state taxes, then, yes, check with a tax attorney.
There are a couple of wells staked in 35 & 36 of 17-12. They are drilling a well about 2 miles south, and just finished a well about 4 miles north of this area.