Lea County NM-been offered large amount to sell producing mineral rights

My family has fractional mineral rights on 300+ acres in southern Lea County T26S 35E Sec 19/30. Latest production company has gone bankrupt but new owners have several nearby producing wells (Madera). A brokerage company made an offer equivalent to $6000/acre (if we had full rights).

Is there a general rule of thumb here about calculating how much it's worth? Seems like a lot of money, but I know the recent BLM sale brought $13000+ for parcels within 2-3 miles.

Our lease pays 1.5% but production has dwindled greatly, but this offer is worth more than the last 10 years of royalties. I wonder if the new company plans to start horizontal drilling, since it has leases in 4 sectors nearby.

Any insight into the local situation would be greatly appreciated ! Should we accept it, keep the rights or counter the offer?


Hi Jean!

If you will look at the attached maps you will see that there are 6 Horizontal Wells already Permitted in Sections 19 & 30, with plenty of room for more.

It would take a little time to determine whether any of them have been drilled yet and how much they are producing, but I would advise that you hold off on selling your minerals, no matter how much money somebody offers you.

I have a family that I am representing who received an offer for some royalty interests that they didn't even know they owned. I looked their properties up for them and it turned out that the company was trying to buy their interests using their own money - royalties they had is suspense.

The company had offered them a total of $6,400 for their interests when they have something like $85,000 in suspense.

Your small percentage might start to bring in a whole lot more money than you are receiving now. If they have drilled and completed any of the wells already, the company may just be finishing the legal research necessary to send out Royalty Division Orders. If so, you have royalties in suspense until you sign and return the Division Order(s).

Hope this helps -

Charles Emery Tooke III

Certified Professional Landman

Fort Worth, Texas

706-MAP01.pdf (49.6 KB) 707-MAP02.pdf (46.6 KB)