Hi, Lisa: Thanks for your post. I also have mineral interest in Sec. 25,26,35,36, Blk. 76 PSL that we leased to EOG recently. Altogether, my family owns about 90 net mineral acres (nma). I did not know they had actually started drilling on our acreage. Could you be anymore specific as to what location(s) they are drilling and when they started?
By the way, my grandfather, father, mother and uncles always said "when you sell land, always keep at least half the minerals and if you buy land, always negotiate for at least half the minerals, if still attached". So I am considering selling up to half my Loving Co. minerals if the price is hefty enough, as I am getting up there in age and have no descendants. However, I will definitely keep at least half of them to pass on to the beneficiaries I do have designated in my will.
$65,000.00+/nma is $25,000.00+ higher than the best offer I have received. If you wouldn't mind passing on the contact info for the buyer, I would be VERY grateful (I am not a buyer). I am new to this site and don't know if you can do that. However I know we can if we are "friends" on this site. I will try to send you a "friend request" but am unsure how to do that, so if you don't receive one from me, I would be extremely appreciative if you would be so kind as to send me one so we can exchange information.
I ran some rough numbers and, assuming $45.00/bbl oil and 25% royalty, our 4 sections would have to sell approximately 15 million barrels of oil equivalent (BOE) to pay us $65,000.00/nma in gross royalty checks. That is a LOT of oil and it will in all likelihood be quite a number of years before that mark is reached, if ever. I think our acreage has the POTENTIAL to make that much and more, but there are absolutely no guarantees that it will.
However, there are two horizontal Wolfcamp wells offsetting our acreage (EOG's locations on our acreage are permitted for the Wolfcamp formation) operated by EOG that start in Sec. 47 with the terminus of each lateral in Sec. 38 only a very few hundred feet south of the south line of the SW/4 of our Sec. 35. Production figures are as follow.
The #1H (API #42-301-32738) Brunson 38 Unit (TRC lse. #48158) on 6/11/2016 tested 24 hr. Initial Potential flowing 2477 BOPD and 3483 MCFGPD plus water on a 68/128" choke. During the period from 6/2016 to 2/2017 it has sold 261,287 BO and 354,559 MCFG. For the month of 2/2017 it made 16,287 BO and 24,866 MCFG. (This is the well referenced by Clint Liles in an earlier post)
The #1H (API #42-301-32493) Whitney Brunson Unit (TRC lse. #48164) on 6/11/2016 tested 24 hr. Initial Potential flowing 1882 BOPD and 2958 MCFGPD plus water on a 68/128" choke. During the period from 6/2016 to 02/2017 it has sold 203,287 BO and 337,998 MCFG. For the month of 2/2017 it made 13,488 BO and 23,887 MCFG.
As you can see, while these wells are definitely "big ones", they do have a very rapid decline, as one would expect given the nature of the reservoir and the huge multistage frack completions. Still, Estimated Ultimate Recoveries (EUR's) I've seen reported per horizontal Wolfcamp well in this general area range from a low of ~1 million BOE to 2+ million BOE.
Further, our acreage is highly prospective for at least one sand in the shallower Bone Spring formation, although the very few horizontal Bone Spring wells I've checked out are northeast of us and have been gas prone w/some condensate.
There is, however, an old vertical Bone Spring oil well (the Madera 26-76 "A" #1; API #42-301-31087, lse #35847) drilled in the 1990's actually still producing in the SW/4 of our Sec. 26. Currently operated by Energen, it has only made a little under 13,000 BO to date and very little, if any, saleable gas. It is clearly only being produced to try to keep some acreage held by production (HBP). I was told by an EOG representative that they have reached an agreement with Energen and it will not hold up development of our acreage. What is significant to me is that it does prove that there is producable oil in one or more Bone Spring sands on our acreage.
There are numerous other formations/zones that may be prospective for our acreage that will probably be drilled on, or at least relatively near us in Blk. 76 PSL, at some point well into the future. Stable higher prices for oil and/or gas--in combination with results of first tests of these reservoirs in our general area--will probably be the determining factors. This is, of course, only my opinion. Although "mostly retired", the bulk of my career (almost five decades) was spent as a petroleum geologist and I still hold the title of Exploration Director Emeritus with the small E&P company I founded almost 40 years ago!
I'll be wishing you the best of luck!!!