Recently received an offer to purchase mineral interests in section 14-7N-5W for $5000 / ac at 1/8 royalty interest and another (from the same group) in section 14-5N-5W for $3500 / ac also at 1/8 RI. Kaiser Francis operates in both. The only thing I can think of that would account for the difference is expectations for current or future drilling and production activity.
The two areas are 12 miles apart, so that accounts for the difference in prices offered.
When new wells are pending on the OCC dockets list, there are quite frequently a rash of offers to buy. Many areas have shallow production and are now getting deeper horizontal wells in the shale.
14-7N-5W has the Lillian 1-23-14XH well which was just completed in 2018. Many of the surrounding sections have multiple horizontal wells, so that is why you are getting offers. They want the future possible production. Did you get your division order for the Lillian?
14-5N-5W-This section is 12 miles south of the other one. Red Rocks has one active horizontal well in the section. Several sections nearby have multiple wells, so probably the same reasoning.
Martha - thanks for your helpful explanation.
This topic was automatically closed after 60 days. New replies are no longer allowed.