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).


#5

We recently received an offer to purchase for $4500 per mineral acre based on a 3/16 interest in Section 2 18N 8W. The first frac well was drilled in 2014, and started out as a large producer, and then tapered down significantly, but is still producing. The Pooling Order states that 2 more Wells can be drilled. Any info on whether this is a reasonable offer given the above, or if you have any info on whether Gastar plans to drill a second well would be greatly appreciated. Thank you for all the assistance you provide on this web site.

Mark


#6

Gastar just filed Chapter 11 Bankruptcy to reorganize. I do not know is your offer is related to that and someone wants to pick up acreage. No wells are planned at this time, but who knows that will happen when they get out of financial difficulty.

First offers are usually low and just fishing…


#7

Thank you so much for the information. I had not heard about Gastar filing Chapter 11. The offer was from Shaw Resources out of Edmond, OK. From what I have read, it sounds like a more reasonable offer would be in the $10K range- is that correct?


#8

I think the $4500 is probably low. I just leased some acres in 18N-9W for $3500 1/5.


#9

Thank you - greatly appreciate your insight!


#12

I have some inquiries about buying my interests in Township 16n, Range 6w, Section 24. What are these rights worth. Is there a lot of activity right now.


#13

There is quite a bit of horizontal drilling in the area. Your section has a well pending at the OCC. Several of the sections around you have increased density cases. Offers to buy (usually at low rates) seem to go out when these hearings are posted at the OCC.


#14

I was just reading this thread and “Raintree” rang a bell. We have interest in a nearby section where there are multiple new wells. From time to time we receive more offers to sell and some months ago I received an offer from Raintree. It was considerably higher than your $8,500/NMA but not high enough to be considered so I just filed it away since I knew that more wells were coming and I had no interest in selling. I would agree that the offer if too low. Also, I tried to check out Raintree since I don’t trust anyone I never heard of and no one else could tell me anything about them. So I would add to the very good advice you’re getting from M Barnes and others, if you’re motivated to sell be sure who you are selling to and if they are reliable. You want to be sure you’ll actually get paid. These outfits try to get the price down as much as they can while you want to do the opposite. As M Barnes said, look at the long term. We have vertical wells that are still producing (minimally) after 50+ years and now they are going to drill horizontal wells in the same section!


#15

We were offered a lease for Section 22-16N-7W for 4,500 and 1/5 royalty. How do we determine if this is a fair offer.


#16

Was this recently? The section was pooled for $3000 3/16 ths, $2750 1/5 and $0 1/4 back on August 27,2018. If you were leased then and it expired after the pooling, then this seems to be a nice money offer. If you were on the pooling order and did not answer, then you were assigned a bonus/royalty pair. The important part is actually the clauses of the lease (not usually the one they offer you first).