This map shows your Mother’s minerals in yellow. This isn’t the hottest area but there are still wells being drilled. The closest well to the west were drilled 5-6 years ago and aren’t that great, but the longer wells just to the NE and North are only about a year old and look pretty decent. Anadarko has several permits to drill under these minerals. I assume the minerals are already leased? I would think they would be. You don’t say how much has been offered, but here is a quick and dirty way to look at this:
Spacing Unit Size = 1280 acres
Spacing Unit Participation = 53/1280 = 4.14%
Royalty Percentage = 15%
Recovery/well = 350,000 bbls
Royalty/well = 350,000 x 4.14% x 15% = 2,174 bbls
There could be as many as 4 wells eventually drilled in the Unit, so the minerals might generate
more than 8,000 bbls of oil over the life of the wells which would be 20-30 years.
At $50/bbl that would be $400,000 or $7500/acre.
Before you go out and spend that money, let me point out the following:
- Exactly, zero wells have been drilled on the minerals thus far
- There is no guarantee that any will ever be drilled. Way more wells are permitted than drilled.
- There is no certainty as to how much oil the wells will produce if they do get drilled.
- There is absolutely no way to predict what the price of oil will be.
This is a classic “Bird-in-the-Hand” scenario and you should consider your options carefully. Given the potential value involved, you should really consider engaging a qualified professional to help you with your decision.
PETRA0124132258.pdf (67.0 KB)