Continuing the discussion from Location of well clarification:
Don Bray do you have any information on the last two inquiries of this post. Thank you for your help and input.
@Vickey1956 Got some irons in the fire right now, but I will get back with you on this.
PS - Mineral buyers are really smart people, so I always run the other way.
@Vickey1956 I really don’t have anything to add to what @M_Barnes said in the other thread. Her response was spot on with my experiences. Minerals deeded to me from my mother have a basis near $0 per my CPA. One of the reasons I have never sold any of my minerals. Over the years I have received offers ranging from $750/acre (unleased) to $26,500/acre with a 3/16 royalty.
Edit: I have an old Excel spreadsheet that M_Barnes developed several years ago that I use to play what-if analysis. Based on $80/bbl oil and $5.50 natural gas prices, 13 acres @ a 1/8 royalty would return $150,000 in 4 years based on a well with initial production of 200/bbl oil a day and 13,000 mcf gas per day. So, 4 wells would theoretically return $600,000 in that timeframe. Assumes 100% production 1st year, 50% production 2nd year, about 30% production 3rd year and about 20% production 4th year. Not sure if Martha has tweaked any of her formulas in the spreadsheet. Also assumes the same prices, which in reality always change.
Take my spreadsheet at a high level “ballpark”. Really varies by reservoir, completion techniques, price changes over time, etc. There are much more sophisticated decline curve analysis packages “out there” to really narrow down those types of answers. The engineers are using them.
M Barnes are the projections that you discussed of the Wells in paragraph 7 a projection of one well or all 4. Although $150.00 for 13 nma. is a great offer I think I am going to ride this out. It sure looks promising. Thank you and Don for all your insight.
Four new horizontal wells are pending. The increased density exhibits will have an Estimated Ultimate Recoverable total (take it with a grain of salt).
M Barnes I was wondering why does this read as Garvin County instead of Grady? For the Section 13 6N 5W is it a misprint?
Woodford common source ofsupply underlying Section 13, Township 6 North, Range 5 West, Garvin County, Oklahoma, same to be wells for the unit consisting of said Section 13, a 640-acre unit, and that Applicant or-some other party be authorized the right to drill said wells.
M. Barnes it appears when I read and I know nothing about what I’m reading but it looks like Grady, Garvin and McClain but when referring to the Section 13 6N5W it refers to Grady. Are these all the different sections they are drilling? Sorry for bothering you again.
M Barnes after ready further I believe I have answered my own question Thank you.
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