Offer from Caddo Minerals

[TripleF]

I have received an initial letter from Caddo Minerals indicating their interest in purchasing my mineral rights in Section 28, Township 13S, Range 38E in Lea County, New Mexico. Offering $4,000 per NMA assuming a royalty of 22.5%. Anyone else getting similar letters?

[NMoilboy]

You are presumably in pay on one or both of the Steward wells, correct?

W2 of Section 28 (Winnebago Fee 5H): Online since Aug 23. Made 4000 bo in Dec. E2 of Section 28 (Gray Matter Fee 2H): Online since Jan 23. Made 2600 bo in Dec.

Off top of head it looks like that offer is around 20 months of current cash flow.

Caddo Minerals whole shtick is to buy stuff, carve it into tiny bits, and sell the tiny bits on EnergyNet when the cash flow peak is in the near past thus making the “current cash flow” look higher than the cash flow will be when somebody buys it in 3 months. Thus hosing over dummies who buy little things on EnergyNet that appears to have a lot of yield. That may not be here or there, but that’s their deal as far as I can tell. They buy near term cash flow from unsophisticated sellers and flip it to unsophisticated buyers. In a glass houses throwing stones sort of description.

You’d guess ultimate well density here will be 4 wells across the section (2 more wells). So maybe factor that into your calcs.

[TripleF]

Thanks! I received several PMs saying basically the same thing. I really appreciate your thoughts!