Right time to sell oil interests

Ms Barnes thank you for sharing your professional expertise and knowledge of the oil and gas drilling business. Im interested in getting information for Section 7 &18 township 3 N R 5 west. Grady County, Oklahoma. I’m interested in selling my mineral interest but don’t know the first thing about it. I don’t know if it’s the right time if there might be more wells that have completed drilling and if more are to follow. I don’t know what would be a fair price or if it’s even the right time to sell. Thanks Michael Welch.

When you are thinking about selling, you need to find out about everything that is going on in your acreage-so good for you for asking. You should have gotten massive mailings from the OCC about increased density for two more horizontal wells in that acreage. They should be coming online within a few months. The second is a very large secondary recovery nitrogen flood case that is pending at the OCC which is planned to cover those sections and many more. It is designed to increase the production in the Morrow formation. Both could last decades. If you have not gotten any of the mailings, then make sure your name and address and title documents are properly filed in the Grady County courthouse. You also need to contact Warwick-Jupiter who is drilling the deeper horizontal wells and Mack who is doing the secondary recovery. If you need addresses, come back and we can give them to you.

Most offers to buy would be at a discounted rate and would paying on the known production. They would probably not include those deeper wells and you probably would like the income from those wells. If you have a serious need to sell, then you need to get multiple offers and really negotiate hard to get a higher price to make up for lost royalties.

Michelle, I want to thank you again for all you do for the followers of this site. I don’t understand anyone selling their mineral interest. When I get offers to buy, I know that interest by the oil companies have increased. In 4N 5W I have received offers of 15k per acre in the last few months. People don’t seem to understand that the income from a sale will cause problems for retirees at least that no one is going to make them aware of. My opinion is keep the interest, enjoy the monthly checks, and hope they drill more. As far as Mack flooding the 4k acres plus, it makes me nervous that this could damage the gas wells and oil wells that have gone on line in recent years. Do you have an opinion on this project that you could share?

If you are talking about the Mack secondary recovery unit that is proposed in the Knox Bromide field area, it is only for the Morrow sands and should not affect the more recent deep horizontal wells as the reservoirs are not connected. It is designed to enhance the recovery from some older shallower wells but only in the designated zone. They are going to use nitrogen to “loosen” the oil and re-pressure the reservoir to get more production out of that zone. I talked to my engineer this week about it and he had no problem with it. Secondary recovery has been used for decades to enhance production and give more revenue to operators and mineral owners.

Michelle, Again thank you for your response. Continental is supposed to start a new gas well in section 24,25 4N 5W shortly. Where can I look to see if they have received a permit to drill on this?

The wellrecords site at the OCC is wherr you can find permits.

Test. The permit will be filed under the surface location, so may not be in 24 or 25. Look in the sections to the north or the south as alternates.

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