Hi Sandra! Has anyone offered to lease your property lately? I was offered $650 and 3/16th royalty for a 3 year paid up lease. Is that a fair offer?
Harry, could you tell me who you leased from? I have property in Section 7, 5n/4w and have been offered $650 to lease. Thanks.
Don't sell. This area is hot now. Keep it for your family.
Don't sell. But if you do, you better be going for $8000 an acre. Once they are gone, they are gone. You might be able to lease them for $500 an acre! And in 3 more years lease them again.
Hi, Joe… thank you for your input. We’ve continued to receive offers to buy our mineral rights since I first posted the original question. We havent sold anything. But, I am amazed. Since we live in So California it’s hard to grasp what is going on back in McClain County. Would you be willing to explain what your take is on all of this interest? I’d appreciate your input or anyone else for that matter. I inherited everything from my parents and I am trying to learn everything that I can. Your help would be appreciated. Thank you.
IF you are getting all kinds of offers to buy, then all the people offering know there is a big probability of hitting significant oil and/or natural gas. If you have that many acres, your piece of the pie could be very large if they drill and hit a well. The buyout offers could be very small in relation to the payout if you lease your minerals and receive royalties after the well is hit. McClain county is arguably the hottest developing oilfield in the US. Let's say they space at 640 acres( 1 square mile). 240/640=.375. If you lease at 3/16 royalty 3/16 x .375= .07. You would get 7% of the well. At 1/4 royalty you would get over 9% of the well. SO just say they hit a good well at 500 bbls a day. 500 x 30 days x $40 a barrel. The well puts out $600,000 a day of oil. $600,000 x .07 or .09. Your cut before taxes would be $42,000 -$54,000 a day depending on 3/16 or 1/4 royalty. So in this example, one month of royalty payout would get you close to an $8000 an acres payout , if you sold the acres. So if it pumped at that rate for 6 months , you make 5 to 6 times what they offered to buy your minerals for already.OF course, the well could put out more or less, or maybe . There is a reason they want to buy your rights. And its not because they are nice people! $$$$$$$$$$
Thanks, Joe. Last question - why is McClain County so hot right now? What is it about the area? Since my first post, I’ve received four formal offers.
Thank you. My husband and I really appreciate the time you’ve taken to respond.
Sorry for the delayed response. We leased with Mike Donley, Oil and Gas. $1,000 per net mineral acre and 3/16 royalty. We've had 4 or 5 offers to buy at $5K - $8K per.
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Here’s another question for everyone: remember we are learning so much. Please advise us. Given how hot you’ve stated McClain County is for oil discovery, do you folks expect oil prices to rise in the near future and if so why? It seems like sufficently high oil prices are a key ingredient for making mineral rights valuable like they seem to be right now.
It's hot because they have drilled and hit some huge horizontal wells. There is lots of oil there. It takes time to figure out how the oil is situated. Like playing a game of battleship. It is happening. You might lease your acres for 2000-4000 an acre in the near future.
What area is your lease in?
Are these minerals currently under lease?
To Sandra Griswold. BP is pooling in 7-5N-1W and I am confident they will drill a well. Charter Oak already has a producer next door in 8-5N-1W that has been producing for about three years now. It is a horizontal going south.