Offer for rights - HELP

We have been approached by a Houston-based company to sell our rights. How can we tell if the offer is any good? We have almost no experience in this since we inherited the rights. We need some help evaluating the offer.

r65w Sec 28 and 33 - we have a small %.

John Gustavson

Certified Minerals Appraiser

Hi Michael,

Whatever you do, be sure to get multiple offers to ensure you are getting the best deal. Any valuation on your minerals should put a value on current production as well as non-producing acreage. The good thing about minerals in the DJ Basin is that it is relatively straightforward to place a value on non-producing minerals based on offset production. Due to the large number of wells, you can find a good analog to use to forecast any Proved Undeveloped reserves (term that is used for the value of non-producing minerals in a proven, developed area). If you have a significant land position, it is well worth getting a consulting reservoir engineer to give you an appraisal. Hourly rates for an experienced engineer will likely be in the ~$125-$150/hr range but it will likely save you thousands of dollars in the long run.