I am doing some research on the valuation on some mineral rights I inherited. I have already leased and am getting about $300.00 a month on an active well with 9 net acres of ownership. Full acreage I believe is 144. Both oil and natural gas royalties are being collected, but the oil is the majority of the check.
Dunn County, ND Section 13 144N 95W
I have been doing some research on the net and trying to establish what it should be valued at, was wondering if there are other owners out there or locals that would be able to assist with trying to assess a value per net acre.
Also, if anyone has sold or entertained quotes for selling, which companies offered the best prices?
I am aware that selling is probably not the best thing, I am in a lot of debt and want a fresh start and this might be a viable option for me so it is something I am interested in finding out more information.
Tim, you are in a good area. In the spacing just south of your spacing they have drilled 3 wells. The royalty you signed for will matter in determining how much your acres are worth. If you signed for 1/6 [16.67] royalty they would be worth considerably less than if you signed for 20%. I can't argue with your reason for selling, I never have liked being in debt myself.
I am sure you have tried but I'm going to mention it just in case, you might keep the acres if you can get a consolidation loan at a decent interest rate and apply all of the royalty to the loan.
I would compare acres in your spacing to blue chip stock. If you had 20% royalty, I think you could get $6,000 [which is in line with offers I have received] per acre in a reasonably quick sale, less if your royalty is lower. I would put the asking price at $6500 @20% [ proportionately less for lower royalty ] so they could bargain me down and feel good about the hard bargain they drove. When Hess returns to drill more wells, the buyer will recover his money fairly fast and have an excellent return for years to come. Need I say offer to sell the acres to family member if at all possible? Also, if you need not sell all, I wouldn't. I hope things look up for you in the future.
I think you will probably be getting a lot of friend requests from potential buyers. You can also list your minerals on the home page of this site, scroll down to the bottom on the home page. Good luck.
In setting a price, much depends on knowing the market and what a buyer may think of the potential of your specifc property and the obligations you have placed on it such as lease, well-bore interests, title obligations, the lease operator and its proficiencies. An asking price should also include what your desires and expectations may be. If you have the time to research the market, you will get a better price and smoother transaction. RW not only has some terrific property, he has the right idea of the seller setting the price based on the best information at hand and being an educated seller. Good Luck.