Good Evening,
I’m hoping to receive input from the valuable resources on this forum.
A number of years ago my adult son and I inherited Oil, Gas and Mineral Lease E/2 of Section 17, Block 54, Township 7S, T & P Ry. Co. 22.75 acres, from my late husband. My son holds 2/3 interest to my 1/3 interest. Current production is Sarge 17, #1H, Tall City Operations. The revenue is minimal although I suppose adequate.
My son, as Remainder Man under Texas Law, will automatically inherit my share upon my death, which I should add I’m not planning on any time soon at a vibrant 64 years of age. He has expressed interest in exploring sale options and I will support his decision. We have received repeated offers which we believe to be far below fare market value.
I know many of you will say “don’t sell” but to those of you who would consider selling we appreciate any guidance or resources you can recommend. As laymen we’re concerned about being taken advantage of and respect the input and guidance of the members of this forum.
You are kind of on the SW edge of geologic certainty. Wolfcamp wells are not great but make sense to drill at high prices. There is more oil under your acreage but does it make sense for anyone to drill it? …maybe…eventually…
Tall City doesn’t have a ton of acreage so if they keep running rigs you think they might drill here, but oil is $70 and not $95 and this stuff is pretty gassy and right now natural gas prices are terrible. So you sort of have to look at this as a high risk of development. If nothing else gets drilled the combined acreage is not worth very much, probably $25-30k. If EVERYTHING else gets drilled (say 4-6 wells) its worth a pretty decent amount. Nobody is going to pay you for everything that might get drilled, but you don’t want to sell to somebody who will pay you nothing for things that might get drilled. In the middle its kind of a subjective balancing act.
My guess is that your share is worth about $60-75k and your sons twice that (obviously). Around $200k-ish total. 33.7 total NRA . That’s 500 times your current monthly revenue. You may have a tough time getting anyone to pay that, I don’t necessarily know. Just don’t sell for $25k total. In my opinion.
There ya go, #s from random internet stranger. If you are going to sell, you want to talk to as many folks as possible. My first suggestion is to call Tall City and ask them to make you an offer. They are the ones who really control the value of this acreage. Otherwise start calling folks that sent you offers and negotiating.
Echoing that you are not in an enviable place in Reeves County, but the above is fair advice and will help you avoid a bad situation, if you’d go off another stranger. Here’s how it looks (5 more Wolfcamp drawn wells included), this map was taken from here, public info: https://gis.rrc.texas.gov/GISViewer/
The production from Tall City’s well in the section to the west is not being reported and not getting good numbers from your well, but the lease to the north is showing ~$5MM/well in revenue, that’s 1250/acre per well. May be best to at least wait for an increase in gas prices…
