ORRI - Overriding Royalty

I have 920 acres section 23 and 24 in Lea County with 0.5% ORRI so net 37 Net royalty acres. Just received offer for 7500.00 per acre. What is going on in this area and is this a reasonable offer?

Sec 23 and 24 of what Township?

Township 22S Range 32E

“What is going on in this area?”

Nothing is going on in your lease (NM-081633). No permits or obvious signs of intent to develop. Held by a bunch of old vertical stripper wells.

Oxy permitted a large # of wells in Avogado State 3031 Unit a few miles to the SE.

“Is this a reasonable offer?”

I think it’s low. Highly scientific answer, I know. :smiley: I’d say there are about 5 zones that could get developed there. Now nobody should be paying you for everything in the success case, but $7500/acre is paying for around 1.5 zones and maybe they should be paying for 50% more. Again, that’s very subjective. Timing matters to people who would buy your minerals. I don’t know what EOG is going to do, they have a lot of wells to drill all over, and because this is HBP they may not get here for a good long while.