Can anyone share any recent offers for the following areas in Martin County?
Northwest-Quarter (NW4) of Section 26, Block 35, T2N, T&P RR Co. Survey, Martin County, Texas. Northeast-Quarter (NE4) of Section 37, Block 36, T1N, T&P RR. Co. Survey, Martin County, Texas. Southeast-Quarter (SE4) of Section 50, Block A, T&P RR Co. Survey, Martin County, Texas.
Is there any wells permitted.
And, can anyone help me understand the differences between NMA and NRA?
Hi Brandi,
I don’t see any horizontal permits in any of those sections right now. They are all in good areas surrounded by multiple horizontal wells, though.
As to the difference between NMA and NRA, a net royalty acre (NRA) is equivalent to a 1/8th royalty on an acre of land. So, for example, if you owned 1 net mineral acre leased at 1/4 royalty you would have 1 NMA and 2 NRA. If that same 1 NMA was leased at 3/16th royalty you’d have 1 NMA and 1.5 NRA. This assumes no nonparticipating royalty burdens on the NMA but is about as simple as I can make it. Hope it helps!
Marcus
I think we would all like to hear your suggestions and explanation
Brandi and Caroline,
To calculate NRA’s all you need to do is use this formula: (NMA x Lease Royalty) x 8 = NRA. For example:
1/4 royalty - (1 x 0.25) x 8 = 2 1/5 royalty - (1 x 0.20) x 8 = 1.6 3/16 royalty - (1 x .1875) x 8 = 1.5 1/8 royalty - (1 x .125) x 8 = 1
Mineral Companies use NRA’s instead of NMA’s because it factors in what the lease royalty is. Two mineral owners who have the same NMA’s in the exact same section but are leased at different royalties rates are not valued the same because one will have more cash flow than the other once oil is produced.
I hope this helps.