I have been sorting out some fairly complicated inherited mineral rights for my daughter. Something keeps hitting me about the small portion of the rights, maybe it is not worth even keeping track of it all. Her great grandfather was responsible for the original wells back in the 20s and 30s. His interest (I do not know his percentage of interest) was split three ways when he died, the third of his interests then went to her grandfather, he died and his interests were split among 5 heirs, one of which was my daughters mother, and those interests now to her. It seems to me that even if some rich pools were hit, her percentage would still be so small as to be almost worthless. At what stage is the percentage so small it is simply better to sell out? Guidance anybody?
It all depends upon the reservoir and how many wells are drilled in it. I have made a good bit of royalty money on 2-3 acres in stacked pays with multiple horizontal wells.
Don, I don’t think any interest is too small or too big to own. The wealth created by ‘rich pools being hit’ can still be meaningful. The administration of small interests can be tricky though.
Thanks for the reassuring words, it just seems so far off sometimes. Of the 9 locations of mineral rights owned, only one is currently producing about 1000 bbls a month (an old well) and the income is practically nothing. Several more are leased, but am not seeing any attempts to make them produce. A question: I have no idea what percent of these leases we actually own. Is it wise to assume that the original amounts would be the same in most all of them?