Hey all, new to the Forum. We have received offers on this area of Eddy County, New Mexico: Section 7: NE/4. Township: 18 South. Range: 31 East.
Trying to be as informed as possible before a decision is made. Does anyone happen to have information they could share on new activity in the Section/Area that may have spurred the offers, and/or any possible consideration of a value per net mineral acre?
We have Working Interest in producing Devon wells that were drilled in the 80s, but those are in different areas of Section 7 and are lightly producing now days. So, we are unsure if they apply to the offers or how it factors in if it does apply. We are just starting to try and learn this side of things so forgive the ignorance!
I appreciate your guys time and input. Thanks for reading.
I suspect you are getting offers. because you have multiple horizontal wells in many sections near to you.
Matador has two rigs on site in 17S 31E just to the north in sections 31/32,
Mewbourne has permits in the SW corner of Sec 7-18S-31E, but they go west into sections 12/11/10. Having a surface location in your section is quite convenient if they decide to go east and drill into sections 7/8/9. I would not be too quick to sell, if it were me.
Thank you for the reply and information, it was very helpful; and sorry for the delayed response as things were moving along.
At least one of the offers we received (probably both) were due to a company(s), unsure which, desire to drill a new horizontal well.
As such, a potential counter offer (by us) is a higher amount per net acre, landing at $8,500 per (was $7k+), whereas we also keep our two currently producing Devon wells in the Section (the wells will be receiving a workover and are expected to produce decent numbers after the workover). We were also told that there would be no new drilling unless a deal was made to remove us, and maybe that’s true, who knows.
So, with that potential deal in mind do you guys think $8,500 per net acre is too low, too high, or just right for the area? I beleive we shouldn’t sell, but it’s a bit out of my hands. There is still time to adjust the offer and I’m still trying to gather as much info/opinions as I can.
I appreciate yours and anyone else thoughts on the matter. Thank you for your time.
I’m assuming this is someone offering to buy your minerals (with wellbores reserved) for $8500 pnma. How good/bad of an offer that is depends on your royalty rate (i.e. an NMA at 25% roy is twice as much as one at 12.5% roy).
The value of the two existing wells is pretty negligible relative to the risked value of 4 hypothetical Hz wells drilled across the N/2 of Sec 7/8.