Non Producing Minerals Valuation

How would I go about determining the value of minerals that haven't been produced yet? Is there even a way of figuring them?

Wes Luke

One method would be to locate the nearest producing well and run those numbers from the IP to current. This is not say that your mineral area will perform near that well’s production, but it will give you an idea about the basic potential of the area.

Thanks Charles. I thought of that but as you said, there is nothing to say a well on my MA's would produce less or more than that one. Can geologists get an accurate, or even fairly accurate feel for how much is there? I suppose if he could there wouldn't be any "dry holes".

Yours,

Wes

Today’s technology allows an operator to “peek” under the surface via 3-D seismic surveys and these tests have provided essential data to the potential investor of what their risks are and if it is economically feasible to drill. If your minerals are in the Bakken, it is nearly impossible to have a dry hole according to what I’ve seen over the past year.

Wes Luke said:

Thanks Charles. I thought of that but as you said, there is nothing to say a well on my MA's would produce less or more than that one. Can geologists get an accurate, or even fairly accurate feel for how much is there? I suppose if he could there wouldn't be any "dry holes".

Yours,

Wes

Charles,

Not to argue with you, far from it. I'm just trying to learn, but I have heard of dry holes in the Baaken. Were they drilled before this technology came along? I am totally ignorant about seismic tests and what they can do.
This is one of the most interesting conversations I've been in, and I'm all ears.

Yours,

Wes



Wes:

I'm sure there has probably isolated instances (will have to search hard) where a dry hole occurred. When these operators put millions of dollars into an operation, you can bet that they have solid evidence on what lies beneath the surface. The problem comes in as to the amount of production from a well. Again, what I said earlier, one indicator is other neighboring wells even though this is not a fool proof way to gauge any well but it is a factor. These operators are currently temp. spacing multiple areas, applying for drilling permits and I think waiting until the lease nears expiration before drilling.

Wes Luke said:

Charles,

Not to argue with you, far from it. I'm just trying to learn, but I have heard of dry holes in the Baaken. Were they drilled before this technology came along? I am totally ignorant about seismic tests and what they can do.
This is one of the most interesting conversations I've been in, and I'm all ears.

Yours,

Wes



Charles,

Thanks. You obviously know quite a bit about these things. Are you an oilman or simply a mineral owner? It would have been great if my Dad had taken the time to tell me what he knew. I didn't even know we had minerals until after he passed. My grandfather was in the business of buying and selling minerals. He had an office in the bank bldg. downtown until his health caused him to close the office. I would love to know what he did. Thanks for your help.

Yours,

Wes





Wes:

I am only a mineral owner but have a twenty year career in the Oil & Gas field on the State regulatory side. I have minerals in North Dakota and Montana but I reside in Texas. My knowledge (limited) in regards to mineral rights, has come from reading various posts on various forums. I have been doing this over the past two years and it is this reading and my responses that increases my knowledge in the mineral rights field. I learn something new every day and I always keep an open mind to learning new aspects of the mineral field. Good luck in your ventures and just keep on reading and learning.

Wes Luke said:

Charles,

Thanks. You obviously know quite a bit about these things. Are you an oilman or simply a mineral owner? It would have been great if my Dad had taken the time to tell me what he knew. I didn't even know we had minerals until after he passed. My grandfather was in the business of buying and selling minerals. He had an office in the bank bldg. downtown until his health caused him to close the office. I would love to know what he did. Thanks for your help.

Yours,

Wes





Charles,

Thanks, that's exactly what I'm doing. And it evidently works for you and should for me. I'm always open to learning more, especially about the Baaken. Nice chat, and appreciated. If you think of anything else, I'm listening. : )

Yours,

Wes