How much per royalty acre

New Mexico Mineral Rights Eddy County, NM
1

Good morning, I’m back asking a similar question but not sure I received a helpful answer. I have offers for my 61.6 acres in Lea County. I am asking if anyone knows what is being paid per acre for ORRI? Also, I know this area is pooling in preparation for horizontal drilling. There is an older well on the land that is still producing. My other question is…if they eventually cap that well then I’m told you lose the lease and land as well. So, what happens if there is horizontal drilling taking place on the land before the old well is capped? Do you then keep that leased land or not?
Thanks, LY

2

Hi LuAnn,

If they plug all of the existing producers on a lease and that is all, then yes, the lease will expire. And the ORRI will go away. That seems like a very unlikely scenario in an area with clear untapped potential as it’s a terrible situation for the operator (they lose way more than you), who is the one who controls the situation. If they go and drill more wells and then plug the old wells, the new horizontal wells hold the lease. In short, the operator will do everything they can to make sure that the lease remains held either by the old well or by drilling new wells.

I probably have a reasonable idea what is being paid per royalty acre, but would need some details on where this is located. You may have said that prior, but my finding old posts skills are very weak.

Nevermind : Its this? Township 24 South Range 36 East Sections: 17,20,21,28,30.

Cheers

3

This is Central Basin platform. The geology here is not great… If the offer is great and they have the capital to actually close then I would probably do the deal. If not, I’d just hold onto it.

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Parts of Eddy County and Lea County are exceptional. Location matters.

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5

ehhhh…at first glance, its right on the edge. Enough that Sec 19 and 20 are almost assuredly “good” and Secs 16, 21, and 28 seem much less likely to be good. For Hz WC drilling.

But the top of the WC in the Davidson well in NE4 of Sec 20 and the Cooper well in the NW of Sec 21 are both below 10,000’ so…I would say this is probably not the Central Basin Platform.

Everyone welcome to their own geologic interpretation.

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