Looking for any info out there on value of mineral rights per acre in Section 9, Township 22 south,Range 27 east. I have received an offer and just need a idea of its reasonable. Thanks
For a mineral acre leased at 1/8th (i.e. a net royalty acre) I’d say a reasonable offer would be $6-9k per acre. That represents a bit less than $1k/acre for existing vertical production from COG/Mewbourne (bird in hand) and then something around $5-8k/acre for possible horizontal production in the future (birds in the bush).
Again that is for a mineral acre with a 1/8th lease. If your lease is 3/16ths, then each mineral acre is worth 150% of that. (you are getting 50% more revenue). If lease is 1/5 then 160%. If 1/4, then 200%.
The value of future horizontal development can vary wildly, just depends on what might get drilled there and when. You are on the NW fringe of the horizontal development. It’s not the best stuff in the Delaware basin, so the timing of development could be very slow. There is nothing permitted in Sec 9 currently. Mewbourne has permitted wells a mile south of you. If permits end up on your acreage the valuation would increase as that increases the likelihood of increased revenue.
This is one answer from one stranger on the internet. So grain of salt etc.
Simplest thing to do is start calling mineral buyers asking for offers to get some distribution of answers. You can tell them all to get bent, you can try playing them against each other to see if the lower offers will top the highest offer (rinse/repeat), etc. Just Google “mineral buyers permian” and no telling what you will find, might be more hits than Ty Cobb.
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Well actually it is under current lease to Mewbourne so I’m assuming it’s permitted. I am just considering selling the mineral rights only. I have been told that since its on the edge of the primary zone that it would be less per acre than being further south. Since I’m not well educated on these matters I’m just trying to get some idea of a per acre value. What do you think? Thanks for your previous reply
By permitted I meant approved permits to drill horizontal wells. There are none of those as far as I could see. Those would indicate that your revenue might increase substantially in the future.
It should be less per acre than going South, agreed.
If it wasn’t clear above, I think its worth $6-9k per royalty acre for the mineral rights.
Royalty acre = your mineral acres * (Royalty Rate %)/(12.5)
So if your lease with Mewbourne is at 25% royalty, you have 2 royalty acres per mineral acre.
Thank you so much for the good info!
Your interest is just north of the core area of the Delaware Basin In the past few months, we have seen a drop in buying activity for non-core interests, but close enough that there will be mineral buyers looking to purchase it. As far as selling options, there are a few good websites to list your property for sale for a fee, there are companies who will broker your interest for a commission, or you can always seek to sell the interest yourself.
Dave
NMoilboy,is there a way to contact you and ask a question through this forum or otherwise thank you, You seem to have a great knowledge of the area