I have been receiving some higher than normal offers in the mail the past few weeks over $30K per NMA. I have been keeping up on what is happening in the area for some years now and I see nothing on RRC or otherwise that would indicate any new activity in this holding or close to it. Last spudded was in late 2022 (2), production in April 2023. I netted about $40k for 2023 on these ORRI’s, 4 NMA owned in this area. My area has 6 wells so far and I see no more infills at present, 4 of these are on major decline as they became operational in 2017 (2) and 2019 (2). This is all ORRI not WI for this abstract only. It makes no sense to me?
Anyone else getting what you consider higher than normal offers? I’m not willing to sell, but I am wondering what is going on that I am missing?
There is a lot of private equity money being put into the Permian. They have different ROI metrics than traditional mineral buyers. They have been pushing up the price per NMA in the area. Could be those guys or could be someone who is trying to position themselves for a trade with Pioneer. You can also see that your area is not fully developed yet, so long term, you interest is a great place to buy.
@KyndallLeone ,Thank you, that is something I did not consider? I know that more infills for my abstract area are possible even though they are short in relation to what others are doing. The offers, now that you mention it are from equity investors, so that as well can be something to look at. I think it is strange that most offers have been for me are in the $15k total or less for it all and now it is over $120K for my part. Will see what others say as well as it has me wondering as I also must keep up with my siblings additional % on top of mine, as well and they are still in the mindset of this is 188 acres and not 10 NMA’s. LOL!! Thanks again, MK
Hey MK- this comment is only for conversation with no judgement, but if you aren’t willing to sell, why do you care? I’m bored tonight, ready for football on Sunday, the day the earth stands still until Spring training starts.
@TODD_M_Baker , It is puzzling me, and my siblings are chomping at the bit as to why I feel they should not sell. They can do what they want, but I would like more info so they are informed even if they don’t really understand. MK
Not knowing what any plans are in the area… But from a pattern point of view, since there are surface locations just adjacent to your acreage going north, it would make sense to use the same surface pads again and go infill south into your acreage and into the next section to the south. The wells distances would be roughly the same as the wells to the north. Think bigger than your acreage.
@M_Barnes, Martha, That makes more sense when you think of this in longer run. Something I did not really look at was using the Pads just North and making the Horizontals run South from them at longer values as well since most now are 2 to 3 sections in length min. Thank you for that, I will pass that along as well. Also all of the empty Glasscock surface area just East is still waiting to be drilled at some point. Not sure how much more time this old man has. LOL!!!
MK
When you get offers like that, someone knows something. Also think more than one reservoir. Think generationally for your grandkids and their kids. What could happen in the next year, next five years, ten years, newer technology on current drilling, Enhanced Recovery. Re-fracs. This business is a technology engine!
@M_Barnes , That is what I am thinking not only for my children and grandchildren, but my siblings families as well. I was not seeing the larger picture though. Like you, I am thinking that someone knows more than I, but I cannot find it so far. I have looked on the RRC, and used other sources as well. Nothing makes since as far as someone knowing something unless they have insider info? My other concern for this particular lease is that it is ORRI. I know that when a lease expires that the ORRI goes away. What about if the person/family leasing sells to Pioneer? Does this negate that particular lease since they are the owners at that point and are no longer leasing that %? MK
Keep an eye on the Commission permits list for your section and the section two to the south where the surface location is for your current wells. They could also use that current pad and come north. Cheaper to use current pads. See if your operator owns the one to the north. If they only own the southern one, then more likely to use it. You have the potential to infill like the wells to the north. That is probably why you are getting offers.
Thank you Martha and yes I have been watching that closely as well. Yes they own a lot of leases around the area I will not name them though as they are a large family with very deep pockets. LOL!!
MK
@Mikro1TX, what you are saying about ORRI is true, but I suspect it may be easier and more advantageous for the operator to just hold the area as HBP, and not have to re-negotiate all of the leases in a
high demand area. Just a guess, because I don’t have a crystal ball either.
@PeteR, Thanks Pete, I was wondering about that? I know the family that holds the lease and they may sell some of the smaller leases to Pioneer depending on timing.
MK
MK