My wife has received two offers in the last week to purchase her royalty interest in Ector County. Specifically Cowden East Grayburg unit. The second offer seems extremely generous based on our current monthly royalty income. We are wondering if there is some new activity that would be driving these offers. Very tempted to sell but don't want to make an error due to limited information.
I would never sell, usually they know something, they are never doing for your best interest
Craig,
Trust your instincts. Recently developed drilling and permeability enhancement techniques are expected to double or triple the oil and gas production that can ultimately be developed from established units. I see it happening in Yoakum, Gaines, Anderson and other areas on the shallower Central Basin Platform. In eastern Ector, you can expect to see deeper horizons to be tested that are under rapid development in Midland County today.
Let your personal preferences and lifestyle dictate whether to hold or sell but in doing so, find out what the fair market value of your future income may be. I can tell you that after looking at your county for others, the FMV can not be found looking backwards at what has been paid but forward at what the industry can do in the future.
Gary L Hutchinson