Recently received 8 tracks of land in Blaine county and received initial offer of $15,000 an acre for the 45 acres we have. How would we determine what the expected monthly Royalty’s would be to see if it’s best to keep it. We have 7 other tracks in Blaine county and 5 in other counties. New to this market
Welcome to the forum. The answer depends upon where you are in Blaine and if the initial drilling is completed, just started or still pending or if there are infill wells drilling or pending. Most offers that I have received have been low to the pending production about to happen for my acres due to infill drilling. You can get a petroleum engineer to run decline curves on the current wells and then apply a predicted price deck and get a ball park projection. As we have seen over the last few years, prices are wildly changing. If you list the section, township and range, we can tell you what the activity around you is. Are you familiar with the Oklahoma Corporation websites? Have you filed your name and description of acres in each of the county clerks’ offices where you have minerals?
If you are new to minerals in OK, here are some useful websites.
Pending OCC cases at the following link: http://www.occeweb.com/caseprocessingonline/default.aspx Actual cases if you have the case numbers: http://imaging.occeweb.com/imaging/OAP.aspx
Docket proceedings: http://www.occeweb.com/ap/docket_results.html
Well activity: http://imaging.occeweb.com/imaging/OGWellRecords.aspx
Production: Gross Production
Deeds, probates, etc. -www.okcountyrecords.com
It is incredibly hard to bank on expected royalties. The best thing to do is to learn as much as possible, follow discussions and seek out other resources like NARO.
Can you share who made the offer? I’m looking to sell some rights
This is in section 25-15N-10W 40 acre track thanks for your info. There is so much to learn and I know nothing so far. Just want to make the best decision on these we have a decent size list that we just received. Is there a service that helps determining the options on keeping versus selling? So far the offer I got on this one track came unsolicited.
If you just received everything, slow down and get oriented. Get all documents from the sale or estate attorney, notify each county in which you received minerals of your contact information and a description of the minerals. Notify each operator of your address. They will require proof of title, so that will take a while. Learn how to file your documents and get organized. Learn how to use the Oklahoma Corporation website and the Tax Site. Read the Mineral Help tab above. Read the Blaine and other county threads over the last few months. Talk to your attorney and CPA about the pros and cons of selling. There are tax consequences. Until you are more informed, you may be taken advantage of by any quick sale.
There are many buying companies that send out mass mailings for any section with an increased density hearing. That means that they are going to drill more wells. In your case, Devon has four infill wells that were spud in August of 2021. They are the Edward 25_36-15N-10W 2HX, 3HX, 4HX and 5HX. They are just about to come online and the buyer hopes you don’t know about them. At the current oil price, I would venture that the offer is low. You need to get into pay status on the original Edward 2-25H well. Cimarex is the operator. That well has 2.1 BCF to date, so that gives you a clue about the other four wells. Do you need addresses for each of the two companies?
The amounts that are offered are tied to your royalty, so you need to find out if you are at 1/8th, 3/16ths, 1/5th, 1/4th, etc. Many of us are tied to old 1/8th leases from our grandparents. That was standard “back in the day”. But someone who has a 1/4 royalty will get offered twice as much as someone who has 1/8th.
Many offers these days are tied to the revenue expected from the currently producing wells. They intend to make a profit on any future wells. Those wells have risk of not being drilled (or being drilled), performing less well (or better), price risk, etc. Companies also factor in the time value of money, so have a discount factor built into their offers. Lots of components and they have sophisticated models.
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