Offer to Purchase Minerals in Kingfisher County


#1

I received an offer from Raintree Energy to purchase my mineral interest for 8500.00 per mineral acre, " if my interest is leased on a 3/16 lease for the purchase of my minerals". What does that mean exactly? Is it a good offer?
Location is Section 34, Township 15 North, Range 9 West, Kingfisher County.
Any advise would be appreciated!
Julie


#2

That offer is very very very low.

Marathon recently received approval for an additional 7 wells in the section (for a total of 9 new HZ wells as original two wells have not been completed). There is 1 Woodford, and 4 wells in each the Lower and Middle Meramec.

The section is part of a multi-section, multi-well development that includes Section 3 14N 9W and Section 34 15N 9W. Based on a quick look I would think over $20k acre is closer to where you should be. I will take a close look and run some calculations and circle back.


#3

I agree with Jeffrey. You may or many not wish to sell at all since nice royalties will be coming in for a long time. The part of the offer that has the 3/16th means that if the lease was a 3/16th royalty back to you (the rest to the operator) their offer is at a certain amount. If the lease was at 1/8th as many very old ones were, the offer per acre would be less. If the lease was at 1/5th, the offer would be more since the value of the royalties over the life of the production would be more. This offer is QUITE low.


#4

As an FYI - when I ran the numbers I came out at $22,500 depending on lease terms. I see you’re down the road from me (I’m in Denver).