My mother-in-law owns some mineral rights in Duchesne, Utah, and is currently receiving ~$500 a month or so in royalties (this is down from $900+ a few years ago). She also received a $50,000 or so signing bonus when she signed years ago.
Earlier this year she was offered $150,000 for her interest, which seems like a dramatically high price to pay for something earning so little. Any thoughts or recommended experts? She doesn’t have a real need for the money now, but obviously $150,000 invested in the market is going to return a heck of a lot more than $500 a month.
If you care to share the section, township and range, we can help with current activity. Buyers usually know what is coming up next, so want to purchase low paying acreage in the path of new horizontals. First offers are usually low and open to negotiation.
There are quite a few permits for infill drillin in tnhe sections near you. Fourpoint has multiple two section wells planned. A rig is onsite in section three to the north of you drilling into that two section set to the north. A 3/10 set of wells would be logical. if the geology of reservoir from your first well continues east. Probably why you are getting offers.
This area is in the horizontal development area in the Uinta basin. Fourpoint just bought their position from Ovintiv, and I think your minerals will likely see additional drilling. If you have a decimal of the well in your section and the name, that would help qualify the prior offer. People most often consider pricing on a $/acre metric, and on a cash flow multiple basis (total consideration divided by yearly cash flow). Your offer might seem rich on a cash flow multiple basis, but is justified on the $/acre metric.
My advice is always to hold onto your mineral unless you need the money right away. I’ve found that sophisticated mineral buyers usually make offers similar to what they project the mineral rights will return to them within one to two years. They are taking a gamble but it is a well informed gamble based on activity in the area and surrounding production. Your well Knoll 13-10 well in sections 3 and 10 has been producing since 2019 and has produced close to 200k barrels. There are no current permits in this drilling unit but it is a good area and new wells in this area are producing double that amount in that amount of time because of better completions. Offers in this area are usually around 5-10k per acre and a single new well will produce 3-5k in royalties. When they drill now they drill multiple wells. Here is a link to the state website where you can find out more about your well. State of Utah - Data Explorer