I inherited a few small leasehold mineral interests in New Mexico years ago. I recently received a letter from Matador proposing to drill two horizontal well that intersect with one of my leases. I checked at https://wwwapps.emnrd.nm.gov/OCD/OCDPermitting/Data/Wells.aspx and the wells are permitted:
Travis State #120H SE4NE4 of Sec 24, 18S-28E API: 30-015-56980
Travis State #130H SE4NE4 of Sec 24, 18S-28E API: 30-015-56979
Even though they estimate that my Working Interest is only 0.291661%, my estimated cost for the two wells is $57,192, which is more than I can afford. And they want me to pay the full cost upfront. If I go non-consent, there is a “100/300/300 Non-Consenting Party risk penalty.”
(1) My main question is: has anyone ever had a well that paid out after producing enough to pay off the penalty?
Of course, it would be great if someone knew about a horizontal wells in S.E. New Mexico, but I’m really curious in general about the issue.
(2) Do I have any better alternatives than going non-consent at this late point? Maybe doing an assignment with a third party that reserves a 25% royalty? But then who pays the royalty? Will I ever see it?
Thanks.