Received an unsolicited offer to buy my non-producing mineral rights on my 34 acres in Section 24. Has there been recent activity and at what price?
What was the offer and the name of the company?
OK Mineral Co. - $1200 /acre.
Will do some research and get back to you.
OK Minerals is apparently affiliated with Buffalo Creek Minerals - both of Oklahoma City. Thanks for your response.
robert brown said:
Will do some research and get back to you.
What township & range is this section 24 in ?
Full Description: Section 24-24N-2W
There have been or are now being drilled several well in 24n-2w this year . Not many completion reports filed yet but the one I found tested at 165 BOD & 559 MCF At $8o a B for oil & $3 an MCF at 1/5 th that would pay about $1690 a year per acre I think. That is with one well. Sandridge has or is pooling 10 sections in 24n-2w the last time I checked. I can see why they would give 1200 an acre. In the pooling they were ordered to pay 350 to 400 for the 1/5 th.
We receive letters on a weekly basis to purchase our mineral rights in 9-20N-1E. The last 3 or 4 months the standing offer in the letters is $1250/acre. We have never replied to any of them...
Ron, thanks for your response. where can I go to get the formula for revenue per acre and please explain the 1/5 th term. Thanks,
Ron McKenzie said:
There have been or are now being drilled several well in 24n-2w this year . Not many completion reports filed yet but the one I found tested at 165 BOD & 559 MCF At $8o a B for oil & $3 an MCF at 1/5 th that would pay about $1690 a year per acre I think. That is with one well. Sandridge has or is pooling 10 sections in 24n-2w the last time I checked. I can see why they would give 1200 an acre. In the pooling they were ordered to pay 350 to 400 for the 1/5 th.
Take the BOD 164 x 80 with the MCFPD 559 x 3 take the total of the two divide by 640, the number of acres in the spacing. That will give you revenue per acre. Divide that by 5 and that will give you a 1/5th royalty interest per acre per day x 365 will be for a year.
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Ron thanks so much. Now is there a rule of thumb that equates anticipated payback of mineral rights to purchase price? Like in your formula the $1200 / acre offer for mineral rights would be paid back in 9 months.
Ron McKenzie said:
Take the BOD 164 x 80 with the MCFPD 559 x 3 take the total of the two divide by 640, the number of acres in the spacing. That will give you revenue per acre. Divide that by 5 and that will give you a 1/5th royalty interest per acre per day x 365 will be for a year.
Del Every well would be different.
Thanks Ron. I really appreciate your and everyone's response.
Ron McKenzie said:
Del Every well would be different.