Our family has several pieces of land with royalties. The offer we received was $19,000 a mineral acre for Block C2 Section 30, Section 28, and Section 29. We have an interest of roughly 30 acres. If anyone could help with this offer and let us know if it is a good deal, we would appreciate it. We have been looking to see if any new permits are being applied for to see if this is royalty we should keep.
Thanks in advance.
I consider that pretty low for that part of Pecos County and especially considering that you already have income from producing horizontal wells. Chances are you can do much better if you intend to sell.
Hugh, it is hard to give you an informed opinion without knowing what your royalty rate is, as that will dictate the revenue, and thus what someone might pay. Section 30 looks like it has been held since the 60s, so assume it is 1/8th. The others are newer, so likely 1/5th or 1/4th.
In general, for that part of Pecos:
If you are getting offered $19k per mineral acre leased at 1/8th, that is a great deal. If you are getting offered $19k per mineral acre leased at 1/4th, that is not a great deal.
So the devil is, IMO, in the details.
There were a few wells permitted in Section 30 in January, but nothing besides that. Good luck.
Thank you for the replies. We are now receiving multiple phone calls.
What company was the first offer from and who did you end up going with? We have received our lease and bonus offer… it seems extremely low… almost a mockery. And many inconsistencies from the first phone call to the actual paperwork received in the mail.