New Chevron Wells :
CB NE 15 22 002 #001H
CB NE 15 22 002 #002H
CB NE 15 22 002 #003H
There have been multiple offers to various owners in the range of about $25,000.00 / Mineral Acre. The question of whether this is fair has been posed. We were offered this amount in the summer and I passed.
My reasoning was that while the selling price is very good, it will be approximately what I would make from 1 zone, and I know that there is at least one other zone that can produce as much again.
This is more a choice of whether to get the money paid up front now or get paid more over time.
At $55 / Barrel which is where Chevron was paying in 2019 it would be less than the buyout price acre for these mineral rights.
It would take a price/barrel of approx 82/barrel and the same production of wells across the street ( Donaldson ) to equal the buyout price. This is just a rough estimate.
The wells I am referring to are:
EL TORO GIGANTE 23 #431H
EL TORO INVICTA 14 #301H
These have produced approx 384,992 barrels for 320 acres. This is half the size of the new Chevron Pool. I doubled the production to get a guess on the section 15 22 wells.
Also, there is decent production in the Bonespring Zone of 342,610 barrels for that same 320 acres. This has not been drilled in the east half of Sections 15 and 22 but has been drilled in the west half of section 15. This just means that if drilled, there is good potential for more royalty money in the future.
Selling now at 25,000 is a pretty good deal, but depending on the future price of oil and production, may be selling out too soon.
Those new Chevron wells have been put into pay status and based on the initial 5 months of production and payments being made for gas, oil and condensate for multiple zones, I would think that $25K ia a low offer. Unless owners need to sell for some reason, it would be smart to wait and see what else happens in the area which has so many new sites and permits.
Thank you for your comments and input. We will wait and see what happens rather than step out and sell to highest bidder. There is so much we do not know or understand, but endeavor with many questions to learn and hopefully will not wear anyone out with answering what may seem like redundancy. We are still trying to learn how to navigate on this informative Mineral Rights Forum.
We are presently receiving a small royal check from Chevron for an old gas well on this location, and are wondering if our being “pooled” into these new Chevron wells be a royalty interest that is based on the overall pooling interest, or will it be based on what my mother originally agreed with on the old Siebert well?
Since we live in Georgia now and my mother is deceased, we never get to Loving, New Mexico anymore to see what is going on. We have appreciated all who taken time to inform us of our questions and give insight as to our interest we have inherited since my mother’s passing.
The only thing changing for you should be your portion of the total pool.
Where the oil well Siebert 1 - was a 40 acre pool and you owned 2 acres.
The new wells are a 640 acre pool and you still own 2 acres. You will get a much smaller percentage of the total, however the production is for a section ( 640 acres ) so it will be much higher than for a 40 acre pool. This includes total production from all 3 wells which make up the pool.
Your portion of the production at the wellhead from the lease will stay the same for your two acres. Could be 1/4, 3/16 or 1/8 depending on what was negotiated. Leases from that time frame were usually 1/4.
Thanks CMC15 for your input once again. We really appreciate your help in understanding this new language for us. Like anyone who inherits minerals, we are all rather thrust into something new that we had no idea of the complexity of terminology involved and also things that we might have to do to get in the flow of being a recipient of the mineral rights. Thanks again, Lee and Patricia