My sister is interested in selling her mineral rights in the area of HWY 83 between Asherton and Carrizo Springs, Tx. It is a small tract, but she is trying to find the approximate value per acre of mineral rights to try to negotiate a sale. Any input will be greatly appreciated.
I don't know the value per acre but there is a lot of activity in that area, I would not sell unless you really really need the money. (See Attachment).
89-Asherton.docx (1.01 MB)
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Thanks Paul! I will convey this very useful info to my Sis—she will most likely hold on to her MR after seeing this chart. Appreciate your response!!
Zen,
I’m familiar with this area. It would help to know what Section/Abstract your sister’s minerals are in and what the gross/net acreage is to estimate their value.
Thanks for the response South Tex. My sis owns only 20 acres MR and it is in section 18, abstract A-1048 area. It would greatly help to know an approximate value for her to make up her mind whether to hold or sell. Feedback will greatly be appreciated.
Who is she leased to?
Sanchez Oil & Gas
Zen,
After looking into this more in depth, here are my thoughts for what it’s worth; A good rule of thumb is if you draw a line from the NE corner of Dimmit all the way to SW corner into Webb County, anything South of that line is considered a good position for Eagle Ford (in my opinion). Your sister’s minerals are about 4 miles NW of said line in what I’d say is fringe acreage, at best. Four miles may not seem like a long distance, but in geology terms, that can make a big difference.
Reviewing the closest production within last year, Freedom Production drilled 3 wells last September only one-mile SE of your sister’s tract. Their 24hr. IP rates ranged from 450 - 600 barrels and each well has produced around 50 to 60K barrels in first 6 months. Not phenomenal, in my opinion, but not terrible either. Protege Energy III, LLC, who acquired Newfield Exploration’s leasehold, has drilled a few wells around 4-5 miles South within last 6 months. Those numbers are fair/good, with 24hr. IP rates of 6 - 700 barrels although their decline rates look pretty steep with limited data available. If you look at well performance moving South/Southeast of this location toward Catarina, production numbers are much better. Chesapeake within last year drilled several wells on the Gibson Ranch roughly 5-6 miles SE and those wells have produced much better numbers. A couple have done over 100K barrels and one produced almost 200K barrels of oil within first 10 months or so, but I credit that to better geology and operator. Please keep in mind I did not account for any gas production on these wells due to limited time.
Could there be potential for Austin Chalk or Buda under your sister’s land? Possibly, but nearby numbers for those reservoirs aren’t encouraging. US Enercorp. drilled a Buda well 4 miles West in 2014 and it’s only produced 16K barrels and currently does around 5 barrels per day. Regarding the Austin Chalk, the closest Chalk well was drilled by CML Exploration 5 miles NE in 2015 and has only produced around 20K barrels. Who your sister is leased to is also important when putting a value on her minerals and I am not crazy about Sanchez. They’ve taken on a ton of debt; their stock appears to be tanking lately and I’d imagine it’ll take them some time to develop top tier acreage before getting to tracts such as your sisters. That being said, their closest drilling rig is currently 14 miles SW on Bandera Ranch and they filed several permits 7 miles S/SE of here in March.
As far as putting a value on your sister’s minerals when taking everything into consideration and what I think a buyer would probably pay for 20 nma in this fringe area, I’d put it somewhere in the ballpark of $2,500 to $3,000 per net mineral acre. By no means top dollar, but still a pretty good pay day if your sister is looking for some immediate income as you suggested in your original post. Hope I could shed some light on it for y’all.