I was recently offered $7k per NMA on an ORRI I have on over 300NMA NMA in Canadian County, OK. I am trying to determine if it’s worth it to sell or wait. This is specific to 1, 12, and 13-11N-8W and the two new infill wells (Camino) just spud. The first sales were reported in April. Any advice out there?
Not that I doubt you have 300 NMA, only I see many people confuse how many acres that they have as NMA when in fact the NMA is confined within the surface acres as the way it is shown. Are you sure that is not 300 Acres of surface shown in those sections and your NMA is lower? You do not have to own the surface area, only the minerals as most likely the two were severed years ago. That’s over 2 million for the NMA’s. Unless you think your monthly is lower over the next 5 years or more, I personally would not take it. That’s just me though. The one ORRI and percentage I do have, not including any WI’s which is different, and if I had 300 NMA ORRI’s at the small percentage I have would generate around 6 million over the past 5 years at current rates and before, maybe more? Just my 0.02cents worth. MK
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Welcome to the forum.
Camino has four permits in those sections. HMB 1108-1-212-132WXH, 3MXH, 4MXH, 5MXH. #4 & 5 just went online. The other two were spud, so should be showing up soon. Note that the W stands for Woodford and the M stands for Mississippian. The original well was in the Miss. There is room for more Woodford wells.
Offers to purchase are often right before drilling and usually only for the wells that were already online at that time. Most of the offers that I have received have been for a discounted cash rate for 3-5 years of production for known wells and did not include the new wells because they want all the royalties for the new wells. We prefer to hang onto our royalties for the decades of production that are to come from the new horizontals. The current well in 1&12 has an estimated ultimate recoverable of about 8.7 BCF of gas with about 4.5 BCF left. The well in 13 has about 4.5 BCF of gas with about 2.2 BCF left. Add in four or more wells and your ORRI may be more valuable than what they offered. If you need to sell, then ask for a lot more. Or just sit back and collect the royalties for years to come.
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If youre up in the air about it, sell 1/2 or a 1/4 and take the $1.1 million or $500k and invest it wisely and hang on to the other 1/2, 3/4 and see how the wells perform and what natural prices do. Nobody on here can give you the definitive right answer, myself included. Good luck, tough decision to make when you have $2 million sitting on the table
To Bob77 & Mikro1TX- If I am correctly reading what was written by Mtnman, he has “an ORRI on 300 net acres”. There is no mention of how much of an ORRI he has. So, as an example, if Mtnman owns a 1% ORRI on 300 acres that is the equivalent of owning 3.00 acres of mineral. Maybe I missed something. I just wanted to get clarity to Mtnman because of the mention of millions of dollars can make most peoples heads spin.
I agree Todd, that is why I made the reference to surface acres being 300acres and the ORRI minerals some lower number percentage. Otherwise I agree, My mention of Millions of dollars for an ORRI sounds out of line to me, but I am not one to argue with someone that appears to say they have 300 NMAs? I have an ORRI in 228 Surface area which brings me to about 10 NRIs or half of that is 5 NMAs of which some I purchased from my siblings. Maybe I did not convey my message well or misread his? MK
The total comes to 1% on 345NMA of an overriding royalty interest. It is significant, thus the conundrum.
@Mtnman, I think our definition of NMA’s is totally different? Mine is based on net royality interest (NRI’s) that are based on what I learned from a geologist using a formula based on Net acres of the lease and the interest that is defined in that OGL. My apologies if I was misleading or misunderstood.
These acronyms can be so confusing at times. As old age really sets in it is even more confusing 
MK
Thank you! This was extremely helpful, we did not know they had spud the other two already. That’s good cause to wait.