Considering selling MR in Blaine County - Questions

Our family currently has two wells in pay in the STACK, Blaine County Section 32 14N 13W and Section 28 14N 13W. These wells are producing tremendous natural gas volume. My questions are: 1) When is the best time to sell? 0 to 6 months after first production or 6 to 12 months after first production? Or later? 2) What is the fair market value per acre for this part of the STACK? 3) Should we sell it all if the price is high enough and what would that price be for these two huge gas producers (currently 8.5 million cubic feet per day in 32 and 13.5 million cubic feet per day in 28)? 4) Are we crazy for selling at top price per acre (Maybe $17-20 thousand per acre) in these sections of the STACK with the potential for more wells down the road and a long term play? Thank you fellow owners and consultants for your input.

Greg Turner and family

Not 0-6 months because your first check is for those six months and you would not want someone else to get it.

Probably not 6-12 months because you are still in the highest potential for the well. later.... BUT..... what if these were only the first well from the deepest zone which produces gas and the shallower four other zones were oil prone and just waiting to be drilled. What if this deep zone had room for eight more wells and the shallow zones had room for 18 plus wells? The whole economic picture changes then.

Read the Q3 and Q4 and latest banking investor presentations for Continental Resources, Marathon, Newfield, Cimarex and Devon and get more informed about what is going on and the future plans for the area. Your price per acre suggested is way too low.

Friend me with the blue icon and we can chat off line. The question is- do you sell what you know or do you consider the whole future value of the assets?

Thank you M Barnes for your thoughtful reply. Like all the folks here on this forum we are gathering as much info as possible to decide whether we gamble on the future or take potentially a million dollars or more right now. If we were talking about $25,000 dollars total revenue we could surely hold the mineral rights and wait but 1-2 million dollars is hard to come by and hard to pass up. I've heard of selling prices in the neighborhood of $15,000 to $17,000 even $20,000 per acre in this region of the STACK. We are taking your advice and waiting while in pay for now. Thank you.

I believe that we are still close to the bottom of the O&G cycle, the recovery has been slower than usual this time. I believe that prices could/ very likely be 50% higher in the next 5 years, not to mention the royalty you collect in those 5 years. As an investment, I would consider it a hold.

Thank you r w kennedy. I have been watching the global O&G recovery intently in the national and world news and market reports. I believe we will see higher O&G prices. I appreciate your thoughts and reply.

I own some minerals in the 21-14N-13W, our first well, the Eichelberger came in with a lot of gas as well. We averaged $112.00 per acre per month for the first production check.

We are held @ an 1/8th by the way.

We own minerals in same section held under an old 1/8th lease with a minimally producing well. Do you have any information re why CLR withheld on the recent 4-month Eichelberger production check deductions for compression, gathering, processing and transportation? My understanding is that in OK the producer is responsible for these costs to bring the gas to marketable form and that if portions such as hydrocarbon liquids can be enhanced on top of a marketable product, then royalty owners can be charged some deductions. I have a query out to CLR to get more information about these deductions and, if NGLs, more information re the processing and marketing of them.

Go to your original lease and see if it has Gross proceeds. CLR is in some lawsuits over this. You are correct. OK is an "implied covenant to market state". If you have a gross lease, they should not charge you anything. If you have "net", then they can.