We just record an offer from RRIG Resources of $4500 nma for our Reeves County property. This was a purchase of rights, not a lease (we are presently in year 3 of a lease to OXY). A month ago we record an offer of $2000 nma from another outfit.
Anyone know what's going on there to see such a jump?
Just going off the fact you're leased to Oxy I'd say those offers are incredibly low. Oxy has a great position in the southern part of Reeves and is making some very good wells.
I found your lease to Oxy in online deed records and it looks like you are in Block 50 Township 7. Very good area. Oxy just completed a well in the section touching the southeast corner of yours that tested at 1,200 bopd. There are great wells all around that area.
I found your lease to Oxy in online deed records and it looks like you are in Block 50 Township 7. Very good area. Oxy just completed a well in the section touching the southeast corner of yours that tested at 1,200 bopd. There are great wells all around that area.
$4500 is low unless you have unusual circumstances with your minerals, such as title issues, restrictions, etc. the $2000 bonus is likely a fraction of the royalty payments you would receive from a decent well.
Regarding Reeves County and offers... we have received various offers about the same... $4,000 for a purchase of rights and $2,000 for a lease. Is this average market for Permian Basin or are these considered somewhat low-ball offers...? Thnx
There is no doubt that everything everywhere is depressed right now in the "oil patch", plus I don't live or have any interest in this area, so I don't have any dog in this hunt; but, the two numbers don't seem to match under any circumstances. If someone is willing to pay $2,000 for a lease, then IMHO, the mineral rights purchase is way off base. My old farm boy rule of thumb would be no less than a ratio of 5:1.
I wrote a lengthy post on the issue of selling minerals in the main Reeves County thread a couple of weeks ago. Few offers will get close to what a discounted cash flow analysis would show you minerals are worth assuming you will eventually have wells on the property. If you have no wells, start at $25,000 per NMA. You won’t get that from most mineral buyers but they may actually be worth more.