What offers have been received to purchase minerals in section 24? I have a little over 2 acres that I am thinking about selling. Thanks for all assistance!
Unless you are being offered big money for this I'd hold onto your minerals. Continental has pooled this section under CD 201600523 & it was approved by the OCC on 8/15/16. Continental's success rate is high and most wells are making 800-2000 bopd. Assuming your 2 acres are leased at a 3/16ths. they could potentially be worth a lot of money to you. Example calculation - 3/16(Royalty rate) x 2/640 (unit size) = .00058594 Royalty. 1200 bopd (example oil/gas equivalency) X $48 (dollars a barrel) x 300 (days producing - working in down time) = $17,280,000 a year x .00058594 (your interest) = $10,125 (gross less 7% production tax). I wouldn't sell for any less than $15,000/ac. if you absolutely want to sell. That's about a 3 year payout using this example.
There are several section 24s in each county. Please identify your holding with a section number, a township number and a range. Also, townships and ranges have directional indicators as well.
Blaine county - section 24 - 16n - 12w
Your original post's heading included 24-16-12. My response was based on this section.
Thank you for your detailed response R Taylor. I appreciate you breaking down the math for me! We werent included in the pool for some reason. I believe it is because it is currently leased and producing. Would that affect the calculation any that you did before? I am new to this!
1200 bopd (example oil/gas equivalency)
can you explain how you got this number? how does it account for the oil and gas mix and at what percentage?
I just used it as an example. To be technical 1 barrel of oil is equivalent to 5,612 cubic feet of natural gas. As you probably know, most all the wells are producing 1,000mcf-6,200mcf. You could take actual barrels of oil produced times current price and actual gas produced times mcf/mmbtu price X 300 to reach approximate gross dollar amount produced per year.
You're welcome RDennis. Yes, I believe you are correct that you aren't on the pooling due to being held as to all rights by your lease. I believe the pooling is only addressing those owners with depth clause on their lease and those pooled under the Manke well.
R Taylor, I have 15.625 acres in Blaine Section 24-15N-13W. I am currently unleased. I have a lease offer of $3800 per NMA bonus and 25% royalty. I am also considering participating with some of the acres. Participation cost is roughly $11,000 an acre in the McKinley Well which is being pooled. Would you recommend participating with some of the acres or leasing all? Does your response also apply to this area?
Lance, these are probably going to be Cimarex or Continental wells, and mostly gas. But, they have been pretty good producers. A lease bonus that high with 25% royalty is pretty dang good. They must think it will produce a good well. Beware added costs of participating.
Lance- ive seen lease bonuses in your area bringing 4k-4500 with a 1/5th royalty