How To Market Oil & Gas Leases & Mineral Rights With No Production History

Oil and Gas Leasing Help
#1

I am new to the business and would like some advice on how to market newly released state oil & gas leases. I own the leases to 8 - 40 acre sections in SE Wyoming in two counties. The setup is 4 sets of 2 side by side 40 acre leases in different locations They are on the outskirts of two large oil & gas producing areas and could be ripe for exploration. The leases have no oil & gas history. I believe my selling point is location.

My question is how and where do I market these and perhaps most importantly what would be the going price on leases such as mine? Being new and an investor, not a developer, would flipping these be a better option to raise working capital to purchase better located leases. I understand that if I flip them I need to sell them below market. Question is...what is market?

Another option I have considered is to trade these for mineral rights claims outside of oil & gas.

Thanks

#2

George,

In my long career in Minerals Management, I have, on several occasions, turned federal leases i owned to operators for cash and an override. There are many ways to "market" your positions. Since there is no production, the value of the minerals you control depends on knowledge of the geometry and production potential of each formation in the area. These things can be determined from dry hole data, area production information, and geophysical data (seismic) . In other words, the same information that the operators use in determining the potential of an area.

Once you have an idea as to the relative potential to others through physical information you can set a price then "market" the parcels to operators that are looking for that geologic potential. Another way to market them is to go through an auction process that reaches a lot of prospective buyers. (Not recommended for a good ROI)

Another way is to hold them, monitor drilling success in the area, then offer up trades to the successful operators if you can get their attention. Being State leases, you have less than 6 years to get them drilled. With the activity in the area. realistically, you have less than 3 years to make a deal that will allow an operator to get your lease into its drilling plans.

As a mineral owner in Platte and Goshen counties, I expect you will do well if your land is in those counties.

#3

Gary,

Thanks for this great advice. Everyone here has been great.

After the research I did and out of the leases available for an over-the-counter leasing I found six nicely located leases in Fremont county and two leases in Carbon county. The first question I asked is why didn't they get picked up at auction. The Fremont leases are on the outskirts of a large producing area so maybe I'll have some luck reaching the operators in the area.

Thanks again for the great tips!

#4