Multiple offers for mineral interests

Oil and Gas Leasing Help
1

I am trying to make sense of offers to buy my royalty interests in a producing well in Howard County, TX. The past 5 or six months I have received offers on one the two wells on the land that I have small royalties. The one well in has drawn numerous offers and based on what payments I’ve received recently the offers range from 50 times my monthly check all the way to 1,200 times. No it’s not a misprint. I have numerous offers between the two that validate the high offer which I had formerly thought was a mistake. I’m wanting advice on what’s possibly going on so I can make an informed decision. I can only figure out 3 scenarios.

  1. the people making the offers are crazy

  2. they know something big is gonna make the well production explode, or

  3. my current operator isn’t declaring what the well is currently producing and way underpaying.

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  1. The operator is planning to drill additional well(s) and have filed drilling permits (either on your lease or neighboring lease).

Most of the time the “Crazy” offers aren’t based on current production, it’s based on anticipated revenue from future wells.

Add the name of your well and/or legal description of your property and can add more precise feedback.

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If you decide to sell, read the deed very carefully. Many deeds include include all your interest in all your royalty interest in the county. Better yet, have a good O&G attorney look at it.

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Thanks very much! Appreciate the advice.

5

Without knowing the legals, IMO it’s statistically most likely that the answer is:

  1. At some point in the future people feel that the operator will drill more wells, although there is no obvious sign that they have begun to do that yet

Totally reasonable that it might be (4, permitted) but there are a lot more (5s) than (4s). But most folks think (for good reason) that any place inside known geologic boundaries with no HZ wells is eventually gonna get horizontal wells.