A gentleman contacted my sister and me today asking if we were interested in selling our mineral rights.
There are 2 horizontal wells producing and we get a tiny percentage. My last royalty check was pretty small. We’ve been getting checks from Parsley Energy for about 3 years.
He mentioned that with the election coming up it might be a good time to sell before November. He said if Biden wins it will hurt the oil business and fracking will stop and new wells probably won’t be drilled.
The land has been in my family for almost 120 years and I planned to leave it to my two kids.
Now with oil prices plummeting I wonder if I’m making a mistake not taking the money.
With oil so low why does his company want to buy it?
Keep it - Passed on from generation to generation - Never sell mineral rights. I agree. Plus, you don’t want to sell when the value is low. I’m leaving my rights to my children. Oil prices will come back
This type of scare tactic seems unethical to me. Someone who would do this is going to make a low-ball offer. If you want to sell, wait for oil prices to improve when demand increases once people are driving to jobs and travel and air travel increases. And then only deal with someone honest. Be aware that smaller operators will be shutting in wells in May and June due to low prices. Better for oil to stay in the ground for some months to be sold at higher prices.
My sister and I did not receive royalty checks from Parsley Energy at the end of June (which would be for May’'s production). I know oil dropped to a negative but we didn’t get a notice that the well was shut down.
We own a small percentage in a horizontal oil well.
Many of the operators are not going to tell you that they shut in a well. They are just going to do it. You will just have to be patient and see if you get a payment in the next month or so if demand and prices go up. In the meantime, go back and look at your Division Order. If you have a $100 minimum on it, you might want to sign a new identical one, but request that the minimum be changed to $25. I usually do that when I sign the original DO so that I get more regular checks as production goes down.
The combination of low price and low or no volume may have put you below the $100 minimum.
Oil price was negative for a couple days at the expiration date of the trading contracts. It was not negative for the month of May which is based on the average price over a 30 day period. It is more likely that your royalties are in minimum suspense due to the low price. Most large operators shut in only uneconomic wells. Small operators did shut in more wells due to termination of their sales contracts by purchasers. May production volumes should be posted on the RRC website now and you can see if your well was producing.