I've met Ms Barnes on a number of occasions and she definitely knows her stuff! We usually only differ in opinion when it comes to 'selling' or “not selling”, and even there I think we tend to agree more than not...
The only thing I would say is that you need to do what is best for you - your brothers may be in a different spot (financially or otherwise) than you...You may have a different agenda than they do, or others do. The greatest thing about owning the minerals...is the choice is yours…
If you don't have to sell, then usually the answer is simply “don't sell”.
Over the long term your minerals should generate cash flows that exceeds any purchase price that you are offered. Us “mineral buyers” buy minerals to make a return on our investment commensurate with the risk we are taking on.
Each mineral investment has certain risks, including:
“Concentration risk” – minerals are similar to real estate and are generally not moveable, location, location, location…obviously, it’s probably one of the top requirements.
“Liquidity” – unlike investments in stocks, etc minerals are not as liquid of an investment.
“Development” risk – timing is important - mineral prices today assume ‘down spacing’ (increased density) - in most circumstances, the economics from one or two wells will not provide a buyer the recovery of the purchase price with a return.
These are just a few of the risks a mineral owner shifts to the mineral buyer if they sell a portion or all of their minerals.
Many mineral owners aren't blessed with a diversified portfolio of minerals spread across multiple sections, counties, or states. Those that are, can sit back and enjoy the diversified nature of their holdings. Other that have concentrated positions, may want to consider selling a little to diversify...but then again, that depends upon location. If you own the best real estate in the county, usually you wouldn't seek to sell it unless you need cash for other purpose (let’s be honest, life likes to throw you curve balls, I know mine has and does)...
Your acreage in 16N-11W S16 is located in a really a great area. I think you should easily be able to get a very hansom amount (even for just 1 acre)…
The Strack well came online in March with a pretty strong level of oil production (23,152 bbls, 24,705 bbls, and 20,954 bbls of oil in April, May, and June respectively. There was also gas production, but the reporting hasn’t caught up yet.
You should be receiving checks soon enough. And if you want to sell you could choose an effective date that permits you to keep the first few months of production.
As I said early on…you are in an envious position, the choice is yours and you don’t have to do anything…
A link to marathon's most recent presentation is below, the discussion on the STACK starts in earnest on page 8, on page 10 the Strack well is mentioned as IP'ing at 1,270 BOEPD (68% oil)- this would imply about 864 barrels of oil, and about 2400 mcf of gas.
The link to Continental Resources' investor center is:
Devon's most recent presentation is available at the following link:
Cimarex's investor center can be reached via the following link: