I currently have a 3/16 royalty agreement on an acreage and was recently contacted by a company offering a $6,500/acre to purchase the mineral rights. I have little idea on whether this is a fair price or what concerns I should have. I am considering building a house on the land and will need to drill a water well.
This is my first post on this site, so forgive my ignorance.
Lee: Welcome to the group. Prices range wildly especially in your area. Without knowing more it sounds a little on the low side. You did not mention whether you were receiving royalties yet. It also sounds like you may have substantial acreage, if so and if you are determined to sell, you might want to consider holding on to some of the minerals.
Get ready for lots of comments, there is a reasonable bias to hold onto the mineral rights.
Thank you for the greeting! There is so much to this topic that it makes my head swim. I’ve been receiving royalties for 5 years. They were pretty good at first and have tapered off to not much the last couple of years.
Thee are increased density applications or orders all around you. Consider hangin on. There is already one well in the section. They positioned it with room for more.
If they have a pad, it is usually at the very north edge or very south edge of the section and at least 200 feet away from a house. Water well would be very shallow compared to the deep horizontals. No interference as they are totally different zones.
Thank you for the insight.
We received 3 or 4 increased density forms in the mail. We didn’t know what to do with them. I take it that is a good thing?
That is an excellent thing as they indicate future drilling. You do not have to do anything with them, but do set up a file for each one. Read them carefully and get a feel for what they are saying. You will see a case number at the top. You will probably get several mailings of different stages of activity for the same case. An application, a notice of hearing, an order, etc. They will have some good exhibits that show where the wells go. I usually go to the OCC OAP site and download the cases into my digital files and also grab the exhibits as they may be in color there. Here is the site. Type in the case # in the top box.
http://imaging.occeweb.com/imaging/OAP.aspx
From the exhibits, you will get an idea of where they plan the wells to be. The surface location may not be in your section, so keep an eye open for that. Then you will know where to look for the wells on the OCC Well record site when they get approved. They will be filed by surface location there. Test
Thank you for all the information. We’re strongly thinking about selling. This is a small lot (6 acres), and we hope to put the money towards putting a drinking water well on the site to start an orchard and start building out there in 5 years. Any way to check out the company making the offer and what to watch out for? Do we specifically have to stipulate surface rights? Do we need to stipulate water rights?
You had better contact an attorney to make sure you keep your surface rights and get a very good surface lease which is different than a mineral lease.
Arrrg! I’m a fool. I can’t find the increased density forms that were mailed to me. Is there any way I can track them down online? I really didn’t realize that they had value.
It appears that Roan acquired the well on our section recently (4-5 months ago). Based on my very rudimentary understanding, it appears that it’s a horizontal well that extends across the section to a location very close to my land, and that we are in something called the “merge”.
I just don’t know what to do with all of this.
What section, township and range? I can give you the case numbers.
I looked up 23-11N-06W, but it does not have a density case. Did you have something nearby?
No, just the one property. I wish I had kept the documents. I’ll see whether something else shows up in the mail eventually.
Thank you
Ms. Barnes, again I’d like to thank you for your comments. I have been reading many of the posts on this site, particularly your posts, they are very insightful. My wife and I have decided that there is so much speculation going on in our area that we are going to hold on to our mineral rights. It sounds like a good time to see how everything pans out.
I found the paperwork (it was mixed in tax papers).
So…
Why am I getting paperwork about horizontal wells that will be at closest 2-3 miles away from the section that I own property in? Why does this affect me? The profit distribution does not include my section.
Also, they’ve permitted an SWD well in my section. Is this good/bad news?
Feel free to send me elsewhere if these question have been answered before.
Thank you!
The SWD on your acreage is encouraging because they usually have to have a disposal well before they can drill long horizontals that need to get rid of frack water.
Check the respondents list on those cases. There may be a name on there that is related to you. You might find acreage you don’t know about. Sometimes, they are courtesy sends and sometimes, they just mess up.