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New to this. I need to learn how to determine the value of our 320 acre parcel. Complete bundle of rights. Located in Reeves County TX. We have one gas lease and one oil lease. 2 more oil wells going in. Both producing. We have been receiving offers for our mineral rights by mail and phone. Should we get an appraisal? Our oil lease is currently with Diamondback. Any help would be appreciated. With the recent run up of prices paid for land and mineral rights it starting to look like a bubble.
Do you know the Block and Section of your interest? That will give a good jumping off point.
Yes, it is Block 7, Section 1 H&GN
As a buyer/adviser, there are a couple key decision points we look at first when evaluating an interest; Location (geology), offset production, operator, and permits.
- Location: You are sitting on good rock, no doubt
- Offset Production: The wells around you (Diamondback and others) have been decent, nothing super.
- Operator: Diamondback is a good operator
- Permit: The Diamondback permit is recent and designated horizontal. Good signs.
You are in a strong position and can command a good payout. Being an educated seller is very important, and it seems you have at least a good idea to where you wouldn't get fooled.
As James said below, throw away any offer under $10k per net mineral acre, that is great advise.
I have property in Reeves also, but I am confused by your statement that you have a gas lease and an oil lease. Usually, the lease is for oil & gas, not one or the other. Can't produce oil without getting gas, I don't think. There has been a large run up in prices, but if you do not need the money, I would hold the interests. Depending on the location of your acreage, you could be looking at amounts of $5k to $10k per acre. Anything less than that, I would simply trash.