We have several offers on the table to purchase our oil royalities in Section 3 in Canadian County. It seems to still be a hot area, but offers are down considerably since this time last year. Trying to decide if it is better to hold off and hope the offers increase, or take the buy-outs and invest them elsewhere. Also are the tax implications on the sale. Thoughts?
You would need to give a complete section, township and range. There are many section 3s in Canadian county.
You need to have a feel for the intended drilling in your area as one must consider more than one well in a section. Yes, there are capital gains taxes on a sale for many people. You might want to read the investor presentation for your operator and the others in the area to get a feel for what is going on. Take them with a grain of salt, but they usually have nice maps.
I have found that when I get offers to buy, something is up and my propensity to hang onto my minerals has paid off nicely. I take that revenue and invest it. Early offers on my minerals have been generally much lower than their actual value realized over time and increased drilling past that first well. Oil and gas prices are lower this year than last year, so the offers are down a bit. Makes sense.
The complete description is Section 3-13N-8W. How do I find out the wells in each section? I know of one, but am sure there are others. All we have is a division order for our mineral right lease, no presentation. The mineral rights were inherited so might be tricky in finding out the cost basis.
You can find the wells by using the OCC well records site. Test
The old vertical wells will be found by using the surface location in 3. 0313N08W goes in the legal location box. The new well has its surface location in sec 10 going north into 3, so use 1013N08W in the legal location box.
Thank you for the link to locate the wells. Can you tell from this site what the production has been for the last year? One bidder has said that production has been down or stopped, but our checks are still coming regularly.
Do you have vertical production or just the horizontal? I can look it up for you.
We have vertical and horizontal production. The well with the horziontal production is producing the greater income. The other vertical wells have pretty much dwindled down to nothing. We are assuming that the horizontal well will still produce but as a lesser amount going forward.