I am trying to assess the value of some inherited mineral related assets in NM and TX. Regarding this particular asset, I believe I own .08984375 ORRI in the NE/4 of Section 28, T18S, R29E in Eddy County. I am a non-expert who lives in the midwest. Any help/suggestions would be appreciated. Thanks.
First things first. Since it is ORRI, it gets its life from an underlying oil, gas and mineral lease. First determine if the lease is still in full force and effect. One indicator is “are you currently receiving revenues”. Beyond that you would be best served by hiring an O&G attorney to check it out ($$$$). Or you can just wait, if your ORRI is solid they will find you. Since ORRI’s die with the lease, they don’t typically bring as much as do mineral interests. Good luck to you.
Not an attorney. Quite sure the lease (FED LC-0067348) is still in effect.
I don’t know what to make of a .089 ORRI. That’s either unusually large if that is a decimal fraction (8.9%) or very small if it is a percentage (.089%). In line with what Bully said about “receiving revenues”, you should have been getting checks from Yates/EOG for the Dixon Yates wells. If you weren’t getting checks then either your revenue is in suspense, EOG doesn’t know that you inherited this from somebody, or else you don’t own anything. I only glanced at a fraction of the courthouse docs but there are all sorts of people named Miller with interests in this section.
Mewbourne just drilled a BoneSpring horizontal into Sec 28 (see below). 240 acres dedicated to that well, 160 in the NE/4 so you should have 1/3 of whatever your interest is in the NE/4 in that well. That is a good thing if you own something there. Assuming you haven’t heard from them prior, call Mewbourne division order dept and ask if they show you (or whomever you inherited from) owning anything in the Pavo Frio 29-28 B2G 001H. If they say no, then maybe its time to hire a landman/attorney. I’m no expert but I think that is what I would do first.
This is not the greatest area of the Delaware. Very far north. Little chance of any Wolfcamp. But still worth something. If, as you reported, you have an almost 9% ORRI in 160 acres…then you have 115 NRA and that is worth at least mid 6 figures. But it could be far far less depending on what oil companies think you own.
Thank you. This is exactly the type of info I need to get a handle on what I own.
Thanks much. These two responses helped.
Hi NMoilboy,
I’ve learned more since your post. Though I am still researching, it appears I own between 4.5 and 5.77 NRA in the N/2 of the section as well an yet to be determined amount in the S/2. For the latter, Mewbourne recently told me I own an overriding decimal interest of .00128910 in their new Pavo Frio 29/28 B2GH Fed Com 1H well there. Since I don’t know the gross acreage of that lease/well (not sure best term to use), I don’t know how to calculate my NRA there. I also believe I own a very tiny fraction in the Triggs Jenning Well. Anyway, what would be your estimate or opinion on price/per NRA in the section?
I think the Pave Frio 29-28 B2G Fed Com 1H is in the N/2 of Sec 28. So that would be for the former, not the latter. It has 240 acres dedicated to that. (yellowish rectangle on map below)
If your decimal in that well is .00128910 it would imply that you own 2.48 NRA in the S/2 of the NE/4 of Sec 28. Assuming you owned the same % in the N/2 of the NE/4, you would have 4.96NRA in the N/2 of Sec 28. Consistent with what you said.
The Triggs Jennings gas well is dedicated to the entire S/2 of Sec 28 (320 acres). So you can figure out how many NRA you own in the S/2 by looking at its decimal on your check.
NRA = decimal x Gross acres assigned to wells (320 here) x 8
Mewbourne has permitted the 2nd Bone Springs at 4 wells per mile spacing across Sec 28. With the B2G being the 2nd from the top, its producing. The other 3 undrilled, but permitted, wells are on the map below as Green lines.
Per NRA pricing? Hmm. The only for sure formation is the 2nd Bone Spring. Oxy is developing 3rd and 1st Bone Spring a few miles away in the Turkey Track wells. If they just drill the 2nd BS, I would say that it’s worth about $6k/NRA, if they drill all 3 zones (with some delay in development), its worth about $11k/NRA. That assumes these wells make initial monthly rates around 700 bopd and WTI is $55/bo. Different strokes for different folks, but that that’s an estimate/opinion backed up with some math.
Hey NMoilboy,
Informative as usual. Thanks. I assumed this Pavo Frio was in the south half because that is where the blue pin is on the NM OCD website. On the Triggs Jenning, I actually have not received any checks but recently found an old Division Order that my father signed in 1979. I contacted Mewbourne and they said they could not find record of it but that they took over operation of the well from someone else. So I am digging deeper there.