I just recieved as a gift from my dad his mineral acres. SW4 of T158N R 101W sect 15. I have 6.666 net mineral acres in the 1280 spaced well at 0.00097656 royalty, which isn’t much. CPEUSC Goldsmith 15-22-158-101.
I don’t know a whole lot but I was recently offered about 2100$ an acre to sell.
My question is does anyone have advice? Is my minimal acreage worth keeping? Is 2100$ a good price? My dad has this since 2017 and no one made any offers to buy when he had it.
Thank you for any feedback
Travis,
Its sort of just a matter of personal preference and how badly you need $14k. In my opinion.
By my math, you were offered about 40 years of current cash flow for your minerals. (The existing single Goldsmith wells makes about 550 bo per month, which should net you something like $25-30 per month). On that basis, then sure, that seems like a pretty good deal. If nobody else drills anymore wells out here. Clearly whoever offered you is expecting there to be more wells drilled here at some point (or more likely is going to sell your minerals to somebody who eventually believes that).
The older existing wells here have not been real great (your well included). This far out on the margins of the basin the wells make a lot of water (and less oil). For a long time nobody wanted to drill anything even close to here. More recently Kraken and CPE have been drilling up units closer to this area. See map below. There are a bunch of units to the SE of you that now have 8-10 wells in them. Kraken has been especially good in wet areas. They are killing it in Williams County. In the past year they brought online two more units just 5 miles East of you (Knox/Dragseth). Those wells are good.
So maybe this is info that would lead folks to believe that eventually there will be more wells here. Still, there are no permits or anything by you. It may take 5 years, 10 years…may need $75 oil. Who knows. Right now CPE and Kraken are running 2 rigs a piece. That’s not a lot.
I’d say your offer is basically paying for one additional well on your unit, beyond the current one. If you get 7 wells drilled on your unit, each making 75,000 bo in the first year you would get something like $25k that year alone at $55 oil. That’s a success case for sure, but that could happen. Again, it may happen in 10 years. Personally I’d be shocked if you don’t eventually get more wells here in the next 10-15 years or so. But lord knows. In the end your offer is just a bird in hand vs bird in bush sort of thing. Depends on how you feel about things.
I do think if you are going to sell I’d always ask for 20% more and hope you can settle for 10%. Or try to shop it around. This is all conjecture or math for the most part, I don’t know much of any specifics about the market for minerals in Williams County. Hope that helps.
Wow, thank you for your response. There is so much information you gave in detail I can’t thank you enough.
I am curious to see what that area would look like in 10 years.
As NMoilboy pointed out, your interest will continue to be held for a very long time by the one well, but it is possible it could see new drilling in the next 10 years. There are a few new permits about 10 miles to the southeast. From a speculative value, I think you should end up with about $3,000/acre if you decide to sell. Be sure to shop it around to the end buyers to ensure you get the highest price.
I leased haven’t gotten any royalties but now some come made offer of 1900.00 an acre. I feel that is low it’s Williams county ND township 159 North range 100 west section 32 Sw/4 any ideas?
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