Just received a mineral rights purchase offer from North Dakota Minerals, LLC for 80 acres in Divide County. The offer is $2000/acre or $160000. This is an all cash offer for all or part of the acres. The location is 161N-99W, Sec 17:NW. Does anyone have an opinion about this company and/or the offer. Thank you.
I wouldn't sell at that price. There's an ok well just north of you and a two well pad south of you that's in your spacing unit. It's currently on the "confidential list". There will probably be activity in your future.
There are producing Bakken wells within two miles of you in all directions, although they wouldn't fly at today's oil prices. These wells are in the 250-300,000 bbl range from 1280 acre units. When oil prices rebound up into the $90+ range, I would expect some drilling to resume in the area. Have you been leased already? I would be surprised if you haven't.
If you were to lease for a 1/6 royalty, and a 300,000 bbl well was drilled, you would receive 3,125 bbls (300,000 x 80/1280 x 1/6) of oil to your share. Of course that payout would be over twenty plus years. And that's only IF prices go back up and IF a well gets drilled. They are paying you $160,000 for the chance to get 3,125 bbls of oil. That's $51 per bbl, which is more than oil is currently selling for. What they are taking a chance on is that there may be multiple wells drilled in each Unit and it might pan out for them and it might not.
I'm sure someone will chime in soon and tell that you should NEVER, EVER sell your minerals not matter what, but if you need the money - sell, if you don't - don't sell. Or split the difference and sell half. It's your decision. I'd at least counter their offer first, they might be willing to go a little higher.
Thanks, Rich.. I appreciate your information.
Thanks much for your information and time. I may look at doing a counter offer.
Please make double-sure that your offer is a LEASE and not a mineral rights purchase, should you decide to do anything with it. I am in the never-sell-your-mineral-rights camp and I have to say that I've never heard of North Dakota Minerals, LLC. Do your homework! They might be just another lease flipper but they also could be a lease broker that is secretly working for an oil company.
Thanks much for your information. I assume that now probably isn't a good time to anything since oil prices are so low.
Probably a wise long-term choice Cynthia. You could sell just the surface rights if you need some cash. They can be severed from the mineral rights. If it's decent crop land you should be able to get $1000-$1500/acre.
Interesting, I will look into that. Thanks again.