I am totaly new to this and do not understand all I need to know. I have mineral rights to
26-7N-5W
E2/SW/NE;E2/NW/SE;NW/NE/SE (Not sure what this discription is)
Recently received a bid from Bridgepoint Mineral Acquisition Fund for $4000.00 per Acre
Then within a few days received a notice from the Corporation Commision for the State of Oklahoma to Vacate Existing Spacing and Establish New Drilling and Spacing Units
Not sure what this all means, if anyone could be of some help, thank you in advance
Arlen Cranford
Keywords:
The first is an ouright offer to buy your mineral acres.
The second is part of the process that the OCC and the State of Oklahoma go through to prepare the porperty for a drilling permit. This process can take many months as well as the drilling of a well can take several months. In the long run you will begin receiving royalty checks at least 6 months after the well is completed and maybe longer. It is anybody's guess when that would happen at this early stage of the process. My guess would be at least 18 months from now. Maybe longer.
The $4000 an acre is for now and you are out of it. Your choice, take the money now or wait for the royalty payments. They will eventually exceed what the $4000 an acre will bring you now but take 2-4 years to do it depending on the well production and oil and gas prices.
Unless you own big time acreage this is not instant riches when it comes. It will start fast but fall off about 50% a year for the first 3-4 years and then level out and produce for 10-15 years at a lower rate. There is all sorts of "up" time and "down" time in well production. No one can answer those questions. They will just happen in the production history.
If your unit that the well is drilling in is a very good well you may see as many as six wells drilled in the unit your acreage is in. If it is not that good a well, you will only see one well drilled.
The multiple wells per unit is just now being started in Grady County. Some operators will stand on the sidelines and watch that result before they jump in an do the same for their drilling units.
I know it sounds confusing and it is. Your basic choice is to take the money now or wait until later for more money possibly. Many bridges to cross before the "possibily" becomes reality.
Don
Thank you for the prompt reply - I will think this over. Have you heard of Bridgepoint before?
Don Underwood said:
The first is an ouright offer to buy your mineral acres.
The second is part of the process that the OCC and the State of Oklahoma go through to prepare the porperty for a drilling permit. This process can take many months as well as the drilling of a well can take several months. In the long run you will begin receiving royalty checks at least 6 months after the well is completed and maybe longer. It is anybody's guess when that would happen at this early stage of the process. My guess would be at least 18 months from now. Maybe longer.
The $4000 an acre is for now and you are out of it. Your choice, take the money now or wait for the royalty payments. They will eventually exceed what the $4000 an acre will bring you now but take 2-4 years to do it depending on the well production and oil and gas prices.
Unless you own big time acreage this is not instant riches when it comes. It will start fast but fall off about 50% a year for the first 3-4 years and then level out and produce for 10-15 years at a lower rate. There is all sorts of "up" time and "down" time in well production. No one can answer those questions. They will just happen in the production history.
If your unit that the well is drilling in is a very good well you may see as many as six wells drilled in the unit your acreage is in. If it is not that good a well, you will only see one well drilled.
The multiple wells per unit is just now being started in Grady County. Some operators will stand on the sidelines and watch that result before they jump in an do the same for their drilling units.
I know it sounds confusing and it is. Your basic choice is to take the money now or wait until later for more money possibly. Many bridges to cross before the "possibily" becomes reality.
No, but there are many outfits trying to buy minerals outright in the Oklahoma Woodford play. Sometimes they keep them but many times they just "flip" them to another investment group. Sometimes the buyer is buying for a specific company. Sometimes they keep them and wait for the royalties and hope they have guessed right on the reserves the acreage produces and the prices for the products in the fuiture. There are winners and losers, nobody ever guesses exactly right.
On this site there are references and links to areas that companies are looking to buy mineral interests in. You will have to search around on the site and can probably come up with other companies that are buying minerals in the Woodford. The play is reaching a point where it is slowing down some because of the varing pices in the products. The number of wells is increasing in the play and the histories on the older wells is able to be viewed and decisions to buy a specific mineral interest is based on these results.
Bottom line is that you interest can be in the play, just in the play or out of the play. You will receive a full offer, which yours is, if your minerals are in the play. A lesser offer if your minerals are just in the play and no offer if yiur minerals are out of the play. It sounds harsh and it is. The oil and gas business is a harsh business for companies of any size to survive in. We all see the success stories but what we don't see is all the companies that have failed over a very long period of time.
Don Norton-No I was responding to Arlen's question. I am unaware of the extent of your acreage and the price per acre offered. If you could contact me with that info I might be bale to give you some better advice. Use the private contact link.
Or if you have posted the info, where can I find it?