I recently received an offer from Bridgepoint to purchase my mineral rights for $6,500/acre. Is there drilling or any active wells in the area? If so I would rather lease than sell and just looking for some advice.
The properties are:
Township 154, Range 95
Section1: NW1.4 SE 1/4 SW1/4NE1 and lots 1 and 2
Township 155 North, Range 100
Section 26: SW 1/4
David - There are wells that include both of those sections within their unit boundaries. You should be receiving royalties off them if you have good title. I take it you haven't leased the rights yet?
Looking at the GIS map, T154;R95;Sec 1 (Alkali Creek Field).....XTO Energy has two wells in that section, Madisyn State and Moe State. In T155;R100;Sec 26 (Stony Creek Field)....Zavanna LLC has one well in that section, Puma. I don't subscribe to the publication that reflects the production figures for these wells but I would learn this info before making any decision in regards to selling. You should be getting royalties from these wells if you have a clear title to the lease. Have you ever been contacted in regards to leasing? My advice would be to research these matters as a first step. Secondly, I would never consider selling unless you are in dire need of cash and if you did elect to sell, make sure your price per acre is fair. I have received letters from Bridgepoint over the years as has many other mineral owners in the ND area. Most likely these are low ball offers and should not be considered until detailed research and calculations have been made.
Cumulative production of around 165,000 barrels oil for Madisyn and Moe [1280 acre spacing ] combined but far more interesting is 93,440 for the Puma 1-26H which is on 640 spacing and would pay twice as much royalty per acre because the spacing is not an oversized 1280.
David, you need to collect for the production so far or the buyer will be buying you out with partly your own money, a large part. If you have not received offers to lease AND offers to participate which you have not answered, you still have the right to become a working interest partner in these wells, which I would not necessarily recommend you do, they were not runaway successes although I believe they are going to be profitable.
What I would recommend you do, if you are going to sell anyway, is sell it as a working interest to the buyer, once again, providing you have not received and refused lease and participation offers and neither did any predecessors in title. I think selling it as a working interest in the wells could pay as much as double the offer you received. I would sell the interest at an online auction as you would likely not receive the best price from a single buyer who assumes he is not in competition.
I believe it could be worth far more to keep in the long run.
The operators would most likely gladly lease you and would pay you the bonus.
Royalty would be a different story, you may have to perform probates or quiet title action to have up to date clear title so the operators will pay royalty. This would probably cost you much of the bonus for leasing. An affidavit of heirship rarely cuts it these days except for the most miniscule of interests, the operators want probates.
Good luck whatever you do.