My sister and I own 13.333 mineral acres In Canadian County. It’s leased to Chesapeake at a 3/16th royalty. Recently, there’s been a spate of interest in buying the lease. We’ve had three offers but have no idea what the lease is worth. It seems our minerals are on a sweet spot on the Woodford. And a Chesapeake rep tells me the company has filed paperwork indicating future plans for our little bit of Okalahoma. Thoughts?
It depends upon where you are. Give a more complete description with the section, township and range and we can help you better.
Section 14, Township 13N, Range 5W
14-13N-5W is pretty thin in the Woodford, about 50'. I checked my subscription spots and don't see any pending activity by Chesapeake, but that doesn't mean there isn't any. The last pooling in the area was in sec 23 just south of you and it was at $350 3/16, so hope you got something close to that with your lease.
Newfield has a new play called the STACK which is extending into your area. It is for the horizons above the Woodford, so this might be why you are getting interest. In general, offers to buy are low and for less money than the minerals are worth. I come from a long line of "never sell your interests", so I am biased. If there is interest, it means that someone knows something that you don't know and they hope you don't get informed. The risk to selling is that you don't get what you should get. The risk to not selling is that you don't get anything if nothing important is underneath you. In the middle is the risk of losing your royalties if there is indeed something there. The winner is waiting and getting royalties from drilling.
If you are new to the forum, read the last six months of comments. Read the Newfield investor presentations on the web for the last two years so you get a feel for what is going on.
I don't know who you might have gotten offers from, but do some research. If there is one with a check attached to it, friend me and we need to chat about being extremely cautious about a particular company that makes offers in that area. Do not cash that check!
Thanks, M. Barnes, for this advice. I'll do what you say. Best offer is 2,500 and the guy who made it advised us to hold.
Norman Turner said:
Thanks, M. Barnes, for this advice. I'll do what you say. Best offer is 2,500 and the guy who made it advised us to hold.
extra zero by mistake. 250 bucks per mineral acre is what I meant
FYI
I have looked at recent mineral SALES (not leases) and there are sales from about $2,000 PER ACRE to around $4000 PER ACRE. These are recorded in the Courthouse. Be careful that you are not offered a deed instead of a lease. Some shysters will make a deed look like a lease.
Sales in the courthouse can be looked up. The girls there will help you. The latest mineral DEEDs I have seen ranged from $2,000 to over $3,500 per acre.
Lease brokers are buying in the lower range and flipping to larger outfits. Some are flipping, and keeping 10% of the mineral. The closer to recent wells the higher the price should be.
Don't sell unless your desperate