Received an offer for assignment on six interests I own in Eddy County, NM

A week ago, I received an offer from a land services LLC interested in acquiring the royalty assignments to six different leases I own a portion of. I have often sold or retained various rights, but in 2010, I accepted an offer that I still regret. My decision was based on my faulty research, and I don’t want to fall into the same trap if I can avoid it. Some of my current research reveals that the long-term objection to drilling areas dominated by Potash mining has been mitigated because of pooling islands and horizontal drilling. I have looked for the owners and production entities for the following and got close, but never the exact pieces. Any help or knowledge in these areas would be greatly appreciated.

S2SW4, SE4 of Section 8, Township 21 South, Range 28 East, Eddy County, NM

NW4NE4, NW4 of Section 17, Township 21 South, Range 28 East, Eddy County, NM

E2, SW4 of Section 18, Township 21 South, Range 28 East, Eddy County, NM

E2, E2W2 of Section 19, Township 21 South, Range 28 East, Eddy County, NM (Save & Except the Big Eddy Unit #140 wellbore.)

N2NE4, S2NW4, E2SW4 of Section 29, Township 21 South, Range 28 East, Eddy County, NM

Lots 1-3, E2W2, E2 of Section 30, Township 21 South, Range 28 East, Eddy County, NM

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The interests you listed are just west of the Potash mine. The township has been generally quiet, but activity has picked up some in the last 12 months. I would certainly get another offer to make sure the offered pricing is competitivie.

Thank You, Pfears, I have already heard from others who are interested in these royalty interests. It seems you are correct in your assessment. Obviously, there is interest in Township 21, range 28 east, Eddy County NM.

Yes that area has good rock and ORRI carries a nice value there. If you’re a seller, wait to receive multiple offers. Ask them to submit offer on a per NRA basis. Do you know how many NRA you own?

I do not know how many NRA there are, I will probably have to go somewhere and pay to see specific acreage. I have been informed that EXXON owns these pieces, so I will continue researching. Thanks

Any interested buyer should send you an offer that shows how many NRA you own and the offer price per NRA. If they aren’t willing to do that then they can kick rocks.

You might want to slow down on selling and find out more. Section 20-21S-28E has four permitted wells by Avant Operating. Offers to buy frequently are mass mailed out to everyone with nearby sections to sections with pending permits. Secs 1 & 2 in your township also have pending permits. Township 21S-27E has quite a bit of horizontal drilling.

New Mexico Oil & Gas GIS Map ArcGIS Web Application 153

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It Never ceases to amaze me how many people are so quick to sell their interest in mineral rights!

Ms. Barnes Thanks for the map and your interpretation of the activity in the sections I participate in. I have only received one mailed offer. The three others have been sent directly to my cell phone, which is a bit creepy. Sections 8, 17, 18, 19, 29, and 30 are tight little areas. Section 20 is in the middle of them.
I need to know the acreage involved in each section. I know it’s S2SW4, SE4 of Section 8, but I can’t get access to those specifics, and without them, I have no idea how many acres are involved. I was teased with $7k per acer and 1/4 royalty. I will try to track down Avant Operating and see what they say. Again, I greatly appreciate your expertise. jmorran

If you could lease instead of selling, you might end up with something nice in the area. Get an attorney to help you with the clauses. The landman should have your net acres. You have the descriptions listed above. You probably have some smaller net acres than what is listed as gross.

As others said, this isn’t under potash. BUT it is in Big Eddy Unit and hard to see how it gets drilled by Exxon any time soon unless something changes drastically. They haven’t drilled a well in western BEU in 7 years and have a couple thousand wells still to drill in Poker Lake Unit (better rock).

You know the (gross) acreage that is involved, you need to know the ORRI % in each of the tracts. As somebody else said, the easiest thing to do is just ask whoever offered you to tell you how many NRA they think you have in each tract.

The Avant story is a bit confusing. Everything you are listing is a Fed lease. Presumably an old Federal lease. Yet Avant is offering you lease terms?

Thanks for your insight.

I have been researching Division Orders and interest transfers from probate(s) and now know the acreage, 320, and ORRI %s. Most of these pieces were originally leased by Bass and Bepco, later sold to XTO, and are now part of EXXON.

I recently emailed the party that made the first offer, asking for more details, but they haven’t responded yet.

I only glanced at this prior. It looks to me like you have an ORRI in Fed Lease LC 0059365 that covers those lands. Single lease. 2553.6 gross acres.

Take your override %, multiply by 2553.6, then multiply by 8. That is your NRA.

For example, 0.1% ORRI would be 0.001 x 2553.6 x 8 = 20.4 NRA (I have no idea what your ORRI is)

Yep. It’s in Big Eddy Unit, operated by Exxon after purchase of BOPCO assets in 2017.

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NMoilboy, Thanks for all the info. One of the interested parties I am dealing with came up with 38.8 acres at $7k per. No override. That’s a nice number, but looking deeper, using the original BEU Gas Map from BEPCO in 2017 that I discovered buried in my O&G files, I see that the Fed. Lease LC-059635 areas are all over the sections in discussion in township 21 S, range 28 E.
I told the prospective buyer we needed to investigate the lease breakdowns more thoroughly to firm up the acreage. The ORRIs are established. I am leery of posting the map from BEPCO on this site, but I would like you to see it. Bottom line: without your knowledge and generosity, I’d be lost in the wind in this, and I’d be 100% vulnerable. Happy 4th jm

I’m not sure what your “no override” means. You have an ORRI in this Federal lease, it appears. Somebody is, I assume, trying to buy your ORRI at a rate of $7k per net royalty acre. That is what would make sense to me based on this thread. I’ll assume “acre” means “net royalty acre”.

Here is the lease on a publicly available map in pink. What you described is the green line. I failed art class. It matches your description other than Sec 29, so not sure what is going on there. But your description would be something like 2234 acres (2554 in the pink minus 320). All inside BEU, held by XTO/XOM.

As you said prior, you know the ORRI%. See if you get the same number of acres (NRA) that the buyer is coming up with. Then at least you are on the same page and you can make sense of it. Sometimes people will tell you that you own more acreage than you actually do so that the total $ is higher (but will go down in due diligence/title).

Cheers

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