Our royalties were averaging around $800 per month from both Cimarex and Chevron for about 4 years, but the past few months have declined to around $350 per month from both operators. However, the offers to buy the mineral rights continue to skyrocket despite these lower royalties.
I do realize that the first 5 years are the most productive for a well (the wells have been in production for about 4 years). For those in the know, is declining production from previously quite stable producing gas wells a general indication of impending drilling/wells to be conducted nearby? I mean, do producers “cap” production a bit on existing wells in order to ready for drilling into another layer, or nearby?
Property specifics detailed below:
43 acres - T1S BLK 59 SEC 40 A-2297 T and P RR/Shelton AE Well: Street Sense 40 Unit No. 1H 10 acres - T1S BLK 59 SEC 39 A-2705 T and P RR Well: Stone Street 46 Unit No. 3H