Hello,
I was gifted a mineral deed in Eddy County and have no idea what it is. I believe it is pretty small. The property description is T22S R27E sec7. I was told I have 8.9 met. acres on a 320 acres total.
I received a purchase offer. I have no idea what to do with it. I have no idea what it is worth.
Also, the current lessee company is asking if I would like to sign a pooling amendment on the oil, gas and mineral lease.
Could someone help and let me know what I have here and how this all works.
Signing the pooling order is no big deal. With SPC I assume. Just sign it.
Someone else here said they were offered $6.6k/NRA for their acreage in this same section. Post from last week. Ericblair I believe was the poster. I’m sure I could link to that thread if I knew what I was doing, but alas, I do not. But maybe you can look up his post.
If we assume that something around $7k/NRA is a reasonably fair purchase price…
Take however many net mineral acres you have, multiply by your royalty rate, divide by .125…that is your net royalty acres
So if you have 8.9 net acres leased at 20% you will have 8.9 X .2/.125 = 14.24 NRA so that would be right around $100k (14.24 x $7k). If you have 8.9 NRA then its just 8.9 x 7 = $62k.
That will not be exactly what it is worth, but that’s at least an idea of what its worth. From random stranger.
Thank you NMoilboy for your explanations and calculations. How do I know if I have net mineral acres or just NRA? Not sure were to look.
I appreciate all the help I can get .
Who told you that you have 8.9 acres? Relatives, operator, deed, purchase offer?
If it is in the deed, then its net mineral acres. Ideally you should know that you own X% of Y acres in Z location. Mineral acres. Sounds like you are leased (to SPC I presume), do you have a copy of the lease and/or bonus check information? Bonus is paid on net mineral acres.
The only people that would mention net royalty acres would be the people trying to buy your minerals.
If you sign a pooling order, or if you sign a lease before the property was pooled, you’ll continue to get monthly payments. If you sell the property, then you’ll get a lump sum from whoever the buyer is, but then your income is gone forever.
Hello again. Yes, you are right, the offers come from potential buyers, mentioning net royalty acres, 13.35 The deed says I have 8.9 acres, leased to SPC, correct again. If this other person (EricBlair) got 6.6 NRA, then yes, the buyer is not offering enough I guess.Do you know if anything is going on in that area?
Thank you NMoilboy.
Thank you Kit. I understand. Difficult decision since I do not know if anything is going on in this area. I just wonder why I would be offered something if nothing is the potential outcome.
SPC is currently running a rig just one unit north of you, Barney wells. Have drilled 2 wells. They have permits across your acreage (Caveman wells, API 3001547629 and 3001547689) they could drill. See map below
Those permits expire in a week from now, but they can get new ones pretty easily as this is not Fed land. Considering that SPC sat on their butts and did nothing for a long time, its somewhat encouraging that they are actually drilling wells. Somebody offering $6.6k/NRA is in line with people having more positive thoughts about this acreage, IMO.
Thank you for your input NMoilboy. I was offered $, but not close to what you mention per NRA.
I am wondering if I should auction vs just the people contacting me.
