I have been lurking here for a while now and learning a lot. I have interests in Lea Co. operated by COG and received an offer from them to purchase all of it. I have not seen an offer before, so naturally I have no idea how it supposed to be phrased. It just says they offer to “acquire all your right, title and interest in the lands described in the Exhibit A”
Township 23 South, Range 33 East, NMPM, Section 20: E/2, Section 21: W/2, containing 640 acres, more or less Lea County, New Mexico.
My interest consists of some ORRI some WI (with unpaid bills, which, per COG lawyer’s email, are going to be eliminated if I sell).
I have earnings kept in suspension for the past five years (due to the lawsuit pending with my ex) which are basically a wash with the WI bills. The offer does not mention NRA of which there is much talk here on this Forum.
I have a funny feeling about this as I feel they are expecting me to fall over the offer of 140K. I work with an o&g attorney on contingency basis; he seems to be pushing for acceptance of this offer. Perhaps I should I have this properties evaluated by an independent professional? Any suggestions?
Thanks a lot!
Go with your gut and get a professional appraisal for that amount of money at stake. Find out if there is future drilling coming. Most of the offers are usually low to actual value.
The offer phrasing you list sounds typical. This (Exhibit A lands) is the COG operated Brinningstool Exp Unit. Formed out of Fed leases NMLC-0068848 and NM-002386A. WI and ORRI is atypical. Both of those leases cover more area than their respective 1/2s of this 640 acres. So one would guess you might have similar interests in the remainder of those 2 leases, outside of this Exhibit A area.
Do you know exactly what you own? Or are you getting offered $140k for an ambiguous amount of stuff? If you don’t know, that would be my first priority. I’d push COG to tell you what you own, at least in their wells. What is your WI decimal and NRI decimal. That should at least clarify what you have in this particular 640. If you know what you own, a lot easier to have an independent professional assess the value. Otherwise you are going to need a landman and an engineer etc.
Your acreage has, currently, minimal development. Two older BoneSpring2 horizontals. So two horizontal wells in a mile-wide unit. In a 20 year timeline, you might end up getting another 10-20 wells (Avalon, BS1, remaining BS2, BS3, upper WCamp) here. You might not. At this point there is no evidence that COG is planning to do any of that soon. They ARE making you an offer, and they control the drill bit, so one would guess that they might do something there soon. But who knows. COG has been shedding rigs since 3Q2018. 19 down to 11 in the Delaware. Perhaps drunken sailor purchase of RSP was a bad move.
Good luck.
Map below shows wells in area, then zoomed in on your 640. Note the areas where it’s almost solid green, that’s where there are a lot more wells.
Thank you Martha. 
First, thank you for your reply.
I do know what I own, Concho came up with the breakdown and although reluctantly, they specified the amount held in suspension.
So now here is a question, do you know of any professional I could contact who could provide the appraisal of my part in Brinninstool wells?
Typically, operators are sometimes willing to provide copies of title opinions to other working interest owners in the drilling unit and may be required to do so if the interests are subject to a joint operating agreement. If you can’t get the information you need from the operator, you will have to hire a landman to figure out what you own.
Would you be able to zoom in on T25 34E, sections 3 & 10
Hey we are almost neighbors, I am in 25S, 36E, sections 7 and 18