Parents received an unsolicited offer for 3/16 mineral rights 32 12N 8W. Is there any new activity? They also have mineral rights in 29 12N 8W, but have not received any offers related to that.
Mach Resources has two new permits for infill drilling in 29&32. The wells have already spud. If it were me, I would not sell when there is active drilling.
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Thank you. When will we know the production of the new drilling, and how should we value their interests if they do want to sell?
They will receive a Division order that states their decimal percentage for the royalties. It will be based upon the equation net acres/actual spacing acres x royalty x % perforations in their section(s). Based upon nearby wells and their decline curves and after about six months of production, as estimated future production by volume of products can be determined. Various future pricing scenarios can be applied to get an estimated royalty value. Offers will usually be lower than this value due to the time value of money.