I have a high school buddy living in Greers Ferry AR. He and his sister inherited a house with a gas lease that over the past 60 months pays averaged out about $400 per month. He would like to buy his sisters share if she is willing but doesn't know where to start. He does not have internet access at the moment so I volunteered. I know that there are tons of variables here but is there' a formula' or even 'a ball park estimate' on what something like this is worth if he is able to buy it and is planning on holding it for the long run? I told him I'd try 'but nothing ventured, nothing gained' right? Thanks. Noel
In what county/state are the minerals located? Feel free to accept my friend request and shoot me a message.
Hi, Noel -
In the world of Unconventional (Horizontal) drilling, things have been turned topsy-turvey, but for producing properties with Conventional (Vertical) wells that have "settled" after their initial "flush" production period, I was taught to take the average of the most recent 3 months worth of production and, if the well(s) are the type that will last for 10 to 15 years longer, multiply that average by 36 month; if the well(s) are the type that will last 20 or more years, multiply that by 60 months.
Any potential for additional wells to be drilled should be taken into consideration to some degree, but you can't sell oil that is still in the ground. Only what is producing at the time of the sale.
Hope this helps -
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
Cleburne County Arkansas. Aprx. 6 wells on 10 acres. Sorry, how do I accept a friend request. Thank you.