I'm posting this just as a reminder as I have had interests in 40 producing vertical wells in Reagan County TX for over 10 years. I receive as low as 20 cents per well. Yes, 20 cents and up. A recent check was 60 bucks for 40 wells? Oxy has drilled 4 Wolfcamp horizontal wells and their take is about 2 million per month and mine is about $1000. The first well came in at 1,585 bbls a day. Last month Oxy postponed drilling any more until price comes back. Just a reminder not to get all bent out of shape thinking you're gonna get rich cause you inherited some mineral rights. I have mineral rights on 18 sections (18 miles) on the Merchant Estate one of the choice drilling spots in the world.
Hi, Sid -
The first question that popped into my head was "How much interest do you own?".
What is/are the decimal intererest(s) on your royalty checks?
I wonder how many people would feel grateful to receive that "paltry" $1,000/month?
I would. I haven't heard anything about mine. The only bad is at income tax time with the 1099. If the money was regular, as I first thought it was, I'd have it made.
I don't have any facts on this one or even know if it was true, but a couple of years ago someone contacted me about a woman down in the Eagle Ford that had her entire ranches' minerals for sale because she was about to lose it.
Seems she had gotten taken in by all that flush production money and ran up something like $70 million in credit card debt. When the wells started their rapid first years declines, she was toast.
Although you'd think her Banker would have been too.
Sid, I pulled up your interests in the Reagan County Appraisal District records. It appears you definitely do own an interest in a lot of wells, many of which are just barely chugging along. I would counter your position that they may not have much value associated with them by stating you could sell them for a large sum of money. You can literally drill hundreds of horizontal wells over 18 sections. This is one of those situations where a lot of dimes can equal a few dollars...
Oxy's aging top dog Ray Irani (78) picked up pocket change of $150,000,000 between 2006-2009. Pressure from agitated investors including the Calf Teachers Retirement Assoc. recently forced his retirement. Irani took $38,000,000 more plus a $2000,000 a month package and stepped down. Greed is good.
Reading your post brought this movie scene to mind ...
Wall Street (1987) Quotes
Gordon Gekko: The point is ladies and gentlemen that greed, for lack of a better word, is good.
Carl Fox: Stop going for the easy buck and start producing something with your life. Create, instead of living off the buying and selling of others.
Gordon Gekko: You're walking around blind without a cane, pal. A fool and his money are lucky enough to get together in the first place.
Bud Fox: How much is enough?
Gordon Gekko: It's not a question of enough, pal. It's a zero sum game, somebody wins, somebody loses. Money itself isn't lost or made, it's simply transferred from one perception to another.