Offers in 14-2N-4W


#1

I have been receiving offers to buy from multiple companies and individuals. Anyone have any experience with what is a fair price in this section? I am leased at 3/16 to Newfield and the wells in the section are producing nicely and have been for several years. These offers make me wonder if there is something new planned, Anyway, what would be the opinion of our group for a fair price?


#2

Getting at a fair market price requires some pretty advanced technical skills. Stack Energy Consulting is a company working in Oklahoma that does independent, third-party, fair market evaluations. You can find their contact info on their website. Here is a link:

http://stackenergyconsulting.com/

Hope they can help!


#3

James we have been receiving offers from Brigham Minerals LLC and a branch (can’t spell subsituary lol) of Continental. The best offer on our 29 2n4w with only one well on it was $20,000 an acre after some back and forth talk. I would think with all the wells that 14 has on it that it would be worth quite a bit more. We were offered up to nearly $20,000 for our section 16 (with 6 wells on it) but we weren’t interested in selling there so we didn’t talk it up but I don’t believe it would have been a problem to get quite a bit more had we been. Hope this helps!


#4

Hi Linda- Do you have a phone number or contact for Bringham? I have lots of good offers on my Grady Stuff but would like to get a feel for what kind of deal I could make in Stephens, We have many producing wells with Newfield in this area and would love to see their purchase offer.

Any info you can provide would be great.

Thank you as always-

Kyle


#5

James, the number I have is 512-220-1200. I believe that’s the number of the Brigham agent that sent the offer. Believe his name was Jeff. Can’t remember his last name. We got a better offer from a Continental subsituary (sp?) with some initials like TMAC and then Brigham matched their offer. The man’s name with Continental is Robert Lunsford and his number is 918-688-7300. He’s really a nice guy! Best Wishes!


#6

Linda: I think the word is subsidiary. You’re welcome!


#7

Sylvester: Thanks, I never was a very good speller and with that word I couldn’t even get close enough for my spell correct to change for me. Now if my memory was better I’d remember it until I need it again but probably not. lol Best Wishes!


#8

Hi James:

How many acres do you own in Section 14? There are several Woodford wells so you should be getting nice production revenue.

Todd M. Baker


#9

Hi Todd-

I own 2.5 NMA in 14-2N-4W. We see some goof production from the Boles and Kelly wells but some of the purchase offers are getting high enough that they deserve a look in my opinion,

Kyle


#10

James- You will see several Sycamore & Springer wells drilled in that same section that will be mostly oil.

Todd M. Baker


#11

Hey YALL! Just wonderin if anyone knows whats happenin in 2N4W?? Looks like section 10 may have a rig on it… we got interest in 10, 11, 1, 13,and 24.

Been living the dream, folks! Miss you all!


#12

You can check the wells and dates at the OCC wells site. Test

Remember that your surface location may not be in your section.


#13

Todd, in your reply to James, did you mean he could expect more wells to be drilled in additional formations in the future? We also own in 14-2N-4W. It surprises me to still be getting such good offers after the wells have been producing for some time. Do the offered expect that much more production from the same wells? Or do they anticipate other formations being tapped? Just trying to understand and appreciate any help!


#14

I’m guessing the rig in 10-2n-4w is drilling Marathon’s wells going through 3-2n-4w and 34-3n-4w. 7 additional Woodford wells and 1 Springer well.

In regards to mineral values, Continental (their subsidiary) offered me $20,500/acre for 15-2n-4w. I made a little more than $4,000/acre last year. Considered selling since the Woodford wells have been producing for some time now, but there’s 3 additional Springer wells and some Sycamore wells to drill at some point. Figured a 5x multiple isn’t great for that reason. 8x multiple would probably get me to pull the trigger for time value of money reasons.

Finding more than $20k/acre for a 3/16 lease is rare without special circumstances. I paid $22,500/acre for a 3/16 lease for some acreage at auction nearby that had 7 wells recently spud on it. And it was a highly competitive auction, so that’s a pretty good indication in my opinion of what the market will bare. Increased Density orders will help your valuation. Also, once you drift west into the gassier part of the SCOOP the values go down unless you have a really solid no deducts clause. Differentials and deductions will cost you over $1/mcf right now. That should improve a bit into 2019 as Permian gas takeaway comes online but they’ll fill that up so quick that the future doesn’t look much different.


#15

Additional formations will be drilled.


#16

Thank you very much for the clarification!


#17

We were offered and decided to take $20,000 on our section 29 2n 4w a few months ago. We had less acreage in it and the one well on it was mainly a gas one. We figured it would take us a long time to make that much off of it. Of course we knew we were taking a chance they would drill more wells in the future but with all the wells they are drilling all through the SCOOP and STACK the price of oil and gas may come down also. My husband said he came on the highway east of Chickasha to Dibble Corner and he thought their was at least 15 new wells being drilled he could see from the highway in the daylight.


#18

You probably got the best deal doing what you did Linda.


#19

I’ve had the same offer for Sec 32 2n4w. Tempting, but need to talk to my tax person. A few weeks ago someone wanting to buy other acreage told me taxes might not be as bad as I thought. He went into something complicated, and since I wasn’t interested in selling I didn’t pay much attention. Does anyone know if there actually is some kind of tax break on sales of mineral rights?? Also, is there something brewing in 29 & 32?


#20

Capital gains tax rate is dependent on the level of your ordinary income, I believe the following is still accurate, but you can check on the irs.gov website (search for capital gains).

Net capital gains are taxed at different rates depending on overall taxable income, although some or all net capital gain may be taxed at 0%. Capital gains rates for individual increase to 15% for those individuals with income of $38,600 and more (($77,200 for married filing joint, $38,600 for married filing separate, and $51,700 for head of household) and increase even further to 20% for those individuals with income over $425,800 ($479,000 for married filing joint, $239,000 for married filing separate, and $452,400 for head of household).

Net capital gain from selling collectibles (such as coins or art) is taxed at a maximum 28% rate.

Taxpayers with income below the 15% rate threshold below, pay 0%. The following are the income thresholds for 15% and 20% rates.

Married Filing Jointly: 15% Rate - $77,200 - $479,000 20% Rate – over $479,000

Married Filing Separately: 15% Rate - $38,600 - $239,500 20% Rate – over $239,500

Head of Household: 15% Rate - $51,700 - $452,400 20% Rate – over $452,400

Unmarried Individuals: 15% Rate - $38,600 - $425,800 20% Rate – over $425,800

Effective for year 2013 and after, the Health Care Act of 2010 imposed an additional 3.8% net investment income tax (NIIT) on certain individual’s investment income. Hence, it is possible that an individual’s federal tax on capital gain could be as high as 23.8% (20% + 3.8% NIIT).