Hi guys, I own a small percentage of several natural gas wells in and around the Permian. These are of course, legacy wells from a few generations back. I hate to sell, but need the cash right now. Two questions; is it better to bundle the wells or sell separately? Also, I have been doing a deep dive on the subject and came across and “insiders” rule on purchasing which said a fair offer is 60 to 70 x’s the average of the last three royalty statements, but that most people don’t know this so they sell for far less than their asset is worth. Need feedback on this. With my thanks.
1 Like
I understand that producing wells will be valued at a higher rate, and location, as with all real estate, matters. I have another question as well. Can you please explain the Type 5 and Type 11 severance tax that can have an upward or downward rate depending on production? I have learned that an operator can file for an exemption if the draw is less than a certain percentage and then passes that reduced tax rate along to owners. But on one of my recent statements, the taxes were VERY high and no exemption had been filed and owners had to absorb that cost. This went on for several months before rates went back to “normal.” Yikes. Gaining an education, for sure. With my thanks.