Good Morning All,
With oil hitting over $100 a barrel, have Mineral Rights increased in value and is $20,000 per NMA a fair offering as of March 3rd, 2022?
I have read that $8,000 to $10,000 was a going rate in 2020. Any help is appreciated.
In March of 2020 oil hit $0.00 per barrel. Where will it be 2 years from now is the question. Most savvy oil investors don’t use short term forecasts when spending money.
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Thanks for the reply. Reasoning for the inquiry is I am getting an unsolicited offer from a company to purchase the interest. In a previous post, other stakeholders were receiving lower bids at half the $20,000 offer.
Based on current political climate on electrification of everything, high carbon fuels will potentially be subject to new taxes. Perhaps not at the extraction level but at the downstream user level. I wouldn’t worry about the short term but by 2050, there will be a very different energy world…
Hey, Schmitty!
Welcome to The Forum. I’ve been a “Responder” on it for years and really enjoy it. Good information for Good People who need it, when they need it.
Todd is right. The Market for Mineral and Royalty Rights can be quite volatile due to international events, but the Smart Money won’t be suddenly offering you a Ton More Mon. They want to buy when prices are low.
On another issue, you need to learn more about the difference between Net Mineral Acres (NMA) and Net Royalty Acres (NRA).
Hope this helps.
Charles,
Thank you. Very new to this. I will research the definitions of NMA and NMR. I honestly do not know but will find out.
Have a good weekend.
Yes, mineral rights have increased in value.
Everything is dependent on specific location. My brain may be fried, but where exactly is Block 36 in Loving County?
I have never been down to see the land. It is a designation based on a land survey.
A well or wells must be active on the land as royalties are being paid.
Sorry, I was being vague. There is not, to my knowledge, a Block 36 in Loving County.
Who/what well is paying you royalties?
Block 36, Township 4S, T & P RR Survey Sect 30: ALL, A-1087
Gotcha. That would be in Glasscock County, Texas.
Vencer has some recently approved permits in the NW/4 of Section 30 that, in my opinion, make that particular part worth more than $20k per net royalty acre. You look around at surrounding acreage and you figure that, at some point, everything around here is going to be covered with gray lines (16-20 wells per section wide unit). But the part without permits is worth less today.
So I’d say that NW/4 of Section 30: $28k per net royalty acre
Remainder of Section 30: $16k per net royalty acre
Average = $19k per net royalty acre. That’s an amateur wild-ass guess. Assuming you own in the whole section. So, in my opinion, $20k per net royalty acre isn’t too bad. If it turns out you just own in the NW/4, well then it’s not high enough. In my opinion.
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Thank you for the correction and heads up. An offer has been received for the above referenced T & P Railroad Survey by Incline Energy Partners. They referenced Loving County on the offer.
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