Section 105 Block 34 in Ward County

General Mineral Rights Discussion
1

My siblings and I own mineral interest in Section 105, Block 34. We have had both purchase and lease inquiries but have no idea what fair values might be. There is a producing lease on the production to 7051 feet but no lease below that depth. I understand the Wolfcamp starts about 10,000 feet and that may be the place to do horizontal exploration,

In any case, if you have any information that might help, past transactions, current offers, etc, about leasing of sale per acre for that section or adjacent sections, it would be appreciated. In thinking about all this, If other mineral interest owners got together, there may some value added as a group. Comments?

Thank you,

Tom

2

Tom, For a lease, I suggest starting at $4500/acre and a 27.5% royalty. Yes, the more percentage of owners you can offer together increases your leverage and helps spread the cost if you hire an attorney to help.

3

If it helps any, I inherited 1/5th of my grandparent's mineral rights. I recently spoke to my cousins, aunt and uncle and we have consolidated our holdings. If nothing else, the oil companies now call me back, knowing I am handling it all instead of my 1/5. I believe it does make a big difference.

4



Wade Caldwell said:

Tom,
For a lease, I suggest starting at $4500/acre and a 27.5% royalty. Yes, the more percentage of owners you can offer together increases your leverage and helps spread the cost if you hire an attorney to help.

Interesting! My 2 siblings and I own 77 acres of an indivisible 440 acre tract. I believe together we are the largest mineral interest owner. I am a businessman but not an oil and gas businessman. I have put together other business deals and there is value in a consolidated front.

You never know whether these offers are valid or not but for my 23 acres, I have been offered $50,000, $60,000 and $100,000 to buy my ownership interest alone. We do have leased shallow production and is has been continuous for 15 years. The latter offer came from the quarterback of my high school football team. He offered $4500 to buy and $2200 to lease and owns an exploration company.

I know Anadarko is about to drill a horizontal well in section 101 which is caddy corner from my section 105. When we were kids in the early sixties, the highest test gas well in the world was completed North of our property and the 10 highest producing gas well at the time was to the South.

This isn’t the only mineral rights in Ward County that we own but is the most visible right now. I have considered sending a letter to all the other mineral rights owners saying we should form a group and negotiate as one. I am 70 years old and if we do not do something now, we may never do anything.

Your suggestion of $4500 per acre leased is based on what logic? To sell, what would you suggest? What other info do you have about this area? Are you an attorney?

Thanks for the response,

Tom