Trying to find out if there is or has been any activity in Section 27 lately
Welcome to the forum. No new activity on 27 in the last few years.
there is an application for increased well density and wondering if that will be a player in the future?
Shows how fast no activity moves to new activity (or I had a typo in my search yesterday). Yes. Looks like Ovintiv (used to be Newfield) is planning on two more Woodford wells in section 27-7N-5W. Hearing is supposed to be next Monday.
I have looked at this forum many years and I have been impressed by your knowledge in many posts. I wanted to let you know, you are the reason I formally joined and hope to learn even more. Thank you!
You are so kind. I learned so much from the forum in my early days. Trying to give back and help others.
Ovintiv also filed the location exceptions, so looks like they are serious about the new wells. Congrats.
When an offer is made from a company to buy mineral interest per acre, is the value usually based on future earnings projected the next ten years? And do they usually project doubling their money? Or does their formula vary among other buyers? It seems their projections don’t extend as much as they used to. Any advice is much appreciated!
Each company does it their own way using the geology, engineering and economic situation of a given area and its reservoirs. Generally, their offers are for the value of the currently producing well(s) with a discount for the time value of money. They fully intend to make a profit off of any purchase where they would reap all of the value from any future wells. We have had full engineering evaluations of our wells (also using the same type of discounting). Most of the offers we have received have been low to those values. We have known about the future pending wells or the likelihood of such, so have not sold. One company in particular made an offer (which we declined) and then shortly thereafter in their company quarterly report said that they intended to make four times the amount of their purchases. Just depends upon who is buying and what their strategy is.
Thank you M_Barnes! I always read owners contemplating whether or not to sell or keep. I was offered the same offer this week for the same offer from 7 years ago, and I certainly didn’t recoup the money that was offered in the 7 year period. I am 57 and weighing my options, wondering if 5 acres has enough land to speculate more drilling or if the buyers are betting on the two current wells. It does feel like a lottery at times, lol. But I hate to fold with Aces, lol. Thanks for your expertise!
I always remember they wouldn’t want to PURCHASE your minerals unless they plan on making a good profit from your minerals. I ( or my heirs) would rather have that extra profit…
Thanks Bud! I am leaning that way, but always like a sure bet when playing poker.
Just like real estate, location, location, location. Most companies will not offer to buy unless they know what the market is, where the pending wells are going to be and they fully intend on making a good profit from any purchase.
Also the wells from seven years ago were likely conventional wells that tend to have a certain long exponential decline rate based upon their product -gas or oil. Most of the new wells are horizontal wells which tend to capture a majority of their value in the first four years are have a hyperbolic decline and MUCH higher initial value since so many more feet are perforated. We are in the early innings of horizontal drilling and still have much to learn about infill wells, secondary recovery, etc. Some of the horizontals may last over fifty years at very low rates of volume, but still quite predictable.
It looks like Mineral IQ values minerals solely on the monthly check I get. The value is based on the latest months’ production only and there is no consideration for new future production. Doesn’t sound very accurate to me.
the ever present question - do i cash out now to satisfy my present “wants” or hold for an unknown future?. i believe it was J Paul Getty, a very rich oil man who advised against EVER selling mineral interests. wonderful things can happen! I have less than 5acres in a pool that allows me to participate in a much larger area that has 5 good producing wells today generating a beautiful return this year that vastly exceeds the paultry offers that i have received in the past. true i made nothing during the first 52 years of ownership, but i am one happy camper today! Perhaps only 1 sample but REALLY GOOD RESULTS SOMETIMES HAPPEN
You are correct. Those values are akin to doing surgery with a chain saw. The range of error in those values are huge. I’m surprised a company with an otherwise decent reputation puts that out there.
One must figure in time value of money. Those persons on here that are very wealthy and have managed their family’s minerals for 50+ years would always suggest to never sell. Of course they own 1000’s of acres in many states. And then there are those that only have a few acres in one or two places. Quite a large difference. And of course the offering company wants to make a profit. Who would make an offer to lose money? But, how long will it take for the buyer to recoup the money that they have paid you? Can you use tax procedures like 1031 exchanges to avoid the tax man and move your profit on the sale to other investments that would work better for you in the long run and remove the “lottery” chances from your equation? Further, IMH & Professional opinion, 5 acres ain’t gonna make or break anyone. Good Luck.
There is no “general” rule for how your specific offer is made. Professionals buying minerals, those sending mass letters, are looking to make 50% to 500% rate of return on their capital employed. Moreover, many use tactics like putting language in deeds whereby you are selling even minerals you did not know you own throughout an entire county.
Todd M Barker, I think I like Mr. Smith’s story better lol I’m setting with 13 acres and hope I see the same outcome one day. I realize it’s a gamble but all my siblings sold out but I just couldn’t yet it’s been in the family along time. Have a blessed day.
Sorry that’s Baker not Barker
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