Would 8 acres actually produce a royalty check worth anything, I’m getting offer of $2750 per acre to sell outright or 3/16 bonus $500 to lease? I have no idea what 8 acres could produce on royalty even in the best case.
Wecome to the forum.
It all depends upon location as the formation geology changes across the county. Please give your section, township and range and we can give you an idea of the activity in the area.
Eight acres or less can give good royalties on multiple horizontal wells. I have been happy with two acres in some good areas.
sec 12 Twn 10N Rng 11 W
1280 acre Horizontal
Duncan Oil Properties
Think bigger than one well. This will be for a two section horizontal well, but likely not the only well as horizontals need more than one well to drain a section. I always ask for what they are offering at 1/5th. The bonus will be smaller than 3/16ths, but the royalty from 1/5th from one or more productive wells for years and years will far outweigh a one time bonus. Most buyers are not going to offer the amount of the future value of the wells because that is how they plan to make a profit. They usually offer a discounted cash value of a few years of current production. Are you already getting paid on the Wyatt 1H-24 by Mach Natural Resources? It is partially in 12 and mostly in 24. Do you currently have a lease? Or were you force pooled?
“Are you already getting paid on the Wyatt 1H-24 by Mach Natural Resources? It is partially in 12 and mostly in 24. Do you currently have a lease? Or were you force pooled?”
I have nothing I inherited this several years back and this is the first contact I’ve had. One from Duncan wanting to lease or buy, and one from Wake- Energy wanting to buy. I have no clue how much a royalty check could be on only 8NMA so that was my question if it could be worth leasing.
The first thing to do is contact Mach and see what you need to get into pay. Be ready with your ancestor’s name, when they passed away, when probate was filed and where and other items that they will require. You may want to check the Unclaimed Funds in the state where your ancestor lived to see if funds are waiting for the heirs.
I am not an expert like Martha, but we were offered a similar lease in a different area, but were quickly able to negotiate a smaller bonus with a 1/4 royalty. If they are drilling like Martha noted I would try and get the biggest royalty you can.
Thanks Martha, I will contact Mach as I found nothing in Oklahoma Unclaimed funds.
My quandary is that I’m getting ready to build a house and wonder if I should sell minerals and add proceeds to down payment or wait to see if the royalty’s payout.
I know there are a ton of variables and no one can give a definite answer but can someone give me a ballpark on a best case scenario of what a royalty check could be on a 8 acre lease?
If you own acres 8 acres in a 1280 unit, that means you own a 0.00625% interest.
If you sign an Oil and Gas Lease at 1/4, that means you get 25% of the 0.00625% interest
So if they drill a well your interest in the total unit = 8/1280x0.25= 0.0015625% interest in the well. I wont speculate on future oil and gas prices as this is a long ways from being drilled if it ever does get drilled, but above is what youd own in the well, let you do with that info as youd like.
If you lease, it, youll get $ 500 an acre on 8 acres = $4,000.00 and then the interest you own in the production. Since you are just now leasing it, it could take them 2+years to drill a well (could be much sooner or might not drill a well at all) and takes another 8+ months from them driling and completing the well and getting into pay. If you are needing the money now to build your house, just keep in mind it could be 3-4 years before you see a dime after you sign the lease.
Thanks Bob, that’s exactly what I needed to know.