Hello,
We have received thew following:
Re: LOI (Letter of Intent) for Minerals located in Roger Mills County, OK 20-16N-21W
This letter of intent shall serve to evidence an agreement Freeda Trammel Trust holds mineral interests in the above section in Roger Mills County, OK, for sale and conveyance unto “Buyer”, for all rights title and interest.
Does anyone have an idea on how to value these mineral rights? We have an offer, but have no idea whether it is high, low or just right…..
The reason that you are getting the offer is that you have one producing horizontal well Diversified Luther 20-16-21. It is only a one section well. It has been online since 2012. It has about 90,000 mcf left and about 23,000 bbls of oil left in the Tonkawa reservoir. However, there is a both possibility of infill drilling in that reservoir and also a rapid growing Cherokee play which has permits for multi-section wells. Quite a few permits in the township just to the south.
Most first offers are low as they try to catch low-hanging fruit. Many only pay for a discounted cash flow of the current producing well. They intend to make a profit off the acreage, so rarely mention if new wells are about to be drilled or new horizons are being opened up.
You can do nothing and wait and see what happens, you can negotiate for more, sell some an keep some. You can pay an appraiser to get a reasonable value for the current well.
Thanks very much for the response. It is extremely helpful.
Hello,
If we wanted to pay an appraiser to get a reasonable value for the current welll, and perhaps also get a reasonable value for the land / mineral rights, how would we do that? None of us owners have experience in this area, and all of us live in states other than Oklahoma. This property is an inheritance from our grandmother who (long ago) lived in Oklahoma.
I have found a lease for the trust on the OKCountryRecords web site. The area is legally described as “S20 T16N R21W E2 W2”. There are copies of the previous lease (from 2010) available for download for a small fee. If I were to pay the fee to download the previous lease, would I receive any information of value that may help us to evaluate the offer to buy?
The only lease we have a copy of is from 2001. It includes the location description as “E/2 W/2, less and except a certain strip of land 40 feet wide, beginning at the NW corner of the NE/4 SW/4 of Section 20 and running South a distance of 1/2 mile to the SW corner of the SE4/ of Section 20-16 North - 21 West.”
Other places there is a condensed version of
E/2 NW/4 & E/2 SW/7
S-T-R / S-A 20-16N-21W
Hmmmm, yup!
Thanks for your help! You’re great!