Curious if anyone else may have some insight as to the current level of activity as well as value in this area (sections 18 - 22).
- M
Hey,
Here are some quick maps of that general area. Percussion Petroleum has had some good recent success drilling Yeso (Paddock, Glorieta) wells just north of you. Bigger fracs, much better wells. So good that they are trying to sell their whole position to a bigger fish and cash out. Perhaps that gets more capital into this area in general, which could help you. Percussion has touted multiple landing zones (you can sort of see that there is much higher well density north of you) so maybe that means 10 or so wells per section, which so you might get more wells even where you already have some older ones. Maybe. Or maybe Percussion just got lucky on a small patch and it doesn’t translate. I don’t know.
As of Nov 2018 BLM lease sale nobody was paying much for a 1/8 royalty lease in this area. A bit over $1000/acre. That doesn’t scream new hot area.
In short, you are on the South end of where the Yeso has been played. Your existing wells are not very good. Percussion has surprisingly great results 3-4 miles north of you. There is no evidence that has spilled over to your acreage, no permits etc, but it should give you more hope than you should have had a year ago. Time will tell. Good luck.
Value? whatever your current cash flow is in a month x 40 + $2-3k/NMA. That’s a total guess.
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Thank you for your response, I appreciate the info.
I have indeed noticed a trend amongst Percussion’s newer rigs just north of me putting out a very nice amount, particularly their Goodman 22 lease.
Percussion recently reached out to me to sign a lease on the north end of 22; it seems they intend to drill. Nothing set in stone yet, of course. I was offered close to the $1k you mentioned. I was previously leasing with Mewbourne, however they chose not to renew. Percussion immediately picked it up for nearly triple the original lease with Mewbourne.
I was also approached by a couple other companies in the last month to flatout buy my mineral interest with offers of $350k+ each. Mewbourne being one of them, they came back immediately. All this interest in my small plot in sec. 22 has suddenly come up out of nowhere.
Do you believe there has been some discovery I’m not aware of? Or are they just covering their bases and hoping their success up North will be found here, if and when they drill?
(pardon the quick edit, read my notes incorrectly.)
I don’t think there is any discovery that you are not aware of. There hasn’t been a well spud in 20S 25E since 2017. Mammoth had a Wolfcamp recomplete in Sec 22 in early 2018 (3001533230) that flowed some oil, but not much over the year, and they have plugged it off to move to a Yeso recomplete.
Like you said, that mostly leaves Percussion covering their bases. They (St Devote/Percussion) filed some leases in Sec 22 in 2019. Maybe they will drill a well. Since they are trying to sell everything they have, it seems possible to me that they are trying to fill in blanks on acreage in their wider Area of Interest as they can sneak that into the overall package at a similar per-acre price, let somebody else worry about drilling it before expiration. Right now they are running one rig and have something like 36 undrilled permits. The nice thing about them selling it may be that it is to somebody who might drill things faster. Assuming anybody is able to pony up for this.
I have some acres in 19S 25E so this interests me. If you don’t mind me asking, you were offered $350k to outright sell how many mineral acres?
Hi NMoilboy, Where could I get a map like that and information for T22S, R27E? My aunt has mineral rights tied to 120 acres in Section 20. Any help you could give me would be greatly appreciated.
Here is something. I pulled it out of DrillingInfo, which is a reasonably expensive subscription service.
In simple terms, that is on the NW edge of the Delaware development. People drilling some wells heading that direction, well performance is not as good as wells as you head Southeast. If prices stay right you’d imagine there will be wells drilled here in most sections eventually. The two green lines right around there are older decent Bone Spring horizontals. Also getting into Carlsbad city limits in this area which shouldn’t be a huge issue but that is a frame of reference.
Thank you for the information, I greatly appreciate it.