I’m evaluating an offer for mineral rights in Section 32, Township 7 North, Range 2 West of McClain County. The offer is based on a 3/16th royalty for 20 net mineral acres. A horizontal well was recently completed with monthly royalties leveling off around $1,600 in recent months. what would be a fair per acre offer for the mineral interest? Does it make sense to sell such a productive royalty?
I think your second question is the most pertinent one. You have to think about the time value of money, the potential of future wells on the property, your motivations to sell or keep and what the offering price is. In my experience, the offers I have had on my producing acreage have been less than I will make on the current well or maybe another one and far less than full field development of all the wells that could be drilled there. (I have had the reservoir engineering done on my wells and know the fair market value of the current wells as of a certain date and the potential for future wells at a certain discount.) There are quite a few buying companies out there that are trying to pick up acreage for low amounts and flip it to larger buyers. Nothing wrong with that, you just know about it. So always ask for more if you feel the need to sell. The forum has quite a bit of discussion on this topic.