Offers to purchase coming in weekly. Latest offer is 8450 an acre. Seems to be quite an interest in the area but not sure if it’s really close to me to pan out. Anyone aware of activity in this area? Thanks
Quite a bit of horizontal activity in 16N-11W. No wonder you are getting offers. Just keep in mind, this is not a one well deal. Read the last six months of discussion on this forum. Read the latest quarterly reports from Continental Resources, Newfield, Marathon, Cimarex, Devon, etc. to get a feel for the area. Hang on until you get up to speed on what is happening. There is no way I would sell any of mine right now. Each person has to do the best for their family, but get informed first. Lots of companies out there offering low offers just to see if someone will take them.
Dear Mr Bridgford, 16N-11W is quite active. Sections 2, 4, 9, 11 and 25 have pending pooling applications. Continental Resources is the operator for eight pooled sections. Marathon is the operator for three sections. Section 1 pooled on these terms: $1,600@1/8, $1,550@3/16, $1,500@1/5 and $0@1/4. Section 7 pooled on these terms: $950@1/8, $875@3/16 and $750@1/5. Section 10 pooled at $1750@1/8, $1625@3/16, $1550@1/5 and $0@1/4. Section 13 pooled at $1650@1/8, $1575@3/16 and $1500@1/5. Section 18 pooled at $1850@1/8, $1750@3/16 and $1500@1/5. Sections 30 and 31 pooled at $925@1/8, $875@3/16, $750@1/5 and $0@1/4. The well on sections 7 and 18 was drilled by Continental Resources and is the Foree 1-18-7XH and the completion report shows 1411 bopd and 3900 mcf/d. Continental has requested approval for four increased density wells on section 13. Continental Resources and Marathon are the most active operators in this township. Echo is also leasing and buying minerals in this township.
Dear Mr Bridgford, I forgot to mention that Cimarex took a lease at 3/16 from the Commissioners of the Land Office (public school land) and paid $2103 bonus per acre in section 16. Marathon took a similar lease in section 32 and paid $5335 per acre. Public school land leases typically have a higher bonus than the pooling bonus at the same royalty rate (3/16).
Thank you Ms. Barnes for the information. I am trying to get up to speed on the interest in this area. As I have read here it is a matter of sure money now (sale) vs the potential, over time, for more money over a longer time frame by staying in a lease. Unless the purchase offers come up significantly it looks like I’m not going anywhere. Thanks again.
Mr. Weeks, thank you for the detailed information. This is very helpful. I am wondering now if my area, ne/4, is one of the areas you referenced as pending pooling applications. I leased with Cimarex about a year and a half ago for 3/16 royalty. Thanks again for your time.
I would expect Cimarex to pool section 16 and then to drill one well to hold the entire section. I cannot say when they might drill but you know the expiration date on your lease. Cimarex has down-spacing pilots underway which should lead to increased density drilling in the future once they determine the best way to maximize production. This activity is SE of your acreage in 14N-10W and 15N-10W. These pilots involve both the Meramec and Woodford formations.
Ok, it looks like it may be a while still since the primary lease is good for another 18 months. However, it looks like it is promising enough not to sale at this point.
Latest offer is $12,500 per acre.
If you have a large number of acres, then you may need to get some professional advice on whether to sell part of your interest. I would be tempted to hold on to minerals in this area. Good luck.
$12,500 is a good offer for that area. There is something to be said for taking that lump sum and investing elsewhere hoping to generate at least a 7% return would generate you more than it would via royalties. Like the saying goes a bird in the hand is worth two in the bush.
This is more than a one well deal, but once they drill one well on your property don't think the companies are going to be in any rush to put another lateral down. They want to HBP all of their property first, when Continental, for example, has 180,00 acres of leasehold to hopefully HBP it will take decades and decades to fully develop . There are certainly pros and cons each way depending on if you decide to sell or keep.
Good luck with whatever you decide to do!
Thanks for the response. I still believe there is a lot of potential money here and am willing to hold out for a much more significant purchase offer. We will see if anyone really wants to make a more significant offer to purchase.
Agreed. I am curious if the $12.5k offer was verbal or written.
Section 7 had a $25,000/ac offer. Makes $12,500 seem pretty low. Sections 10/15 have increased density for six more wells-so far. Just one of many sections with increased density hearings (4, 6, 7, 10, 13, 15, 18, 27, 35) Berhardt density experiment is in 13. Many more wells to be drilled there.
Waiting is probably wise. I think $12,500 is way too low. Just my opinion.
Is that 25k per acre an offer that you received or just heard through the grape vine type of thing? That is an incredible offer, I have not seen anything that high in the STACK. Would like to know if that is a legitimate offer or not as I try to stay on top of current market purchase prices for minerals.
Legitimate. More offered in another section in that township.
I can certainly understand you wanting to hold out then. You might consider testing the waters and just see if you can get that 25k per acre offer M. Barnes mentioned.
Best of luck, Cameron
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