I am not licensed to give exact values, but I can give activity and some comments as to how I would approach it. Do you know the royalty rate? The leasing rate will vary by the reservoir geology, so I would not use a generic rate for the whole county unless I had to. I would use a local rate from the public pooling orders in the contiguous eight sections around the center section within the last 12 months. There are quite a few horizontal wells in those sections, so they probably need an engineering evaluation on the producing sections.
Section 23-2N-4W** approx 2.33 acres (leased and producing) Horizontal wells. Lease rate no longer valid since wells have been online since 2013 and will probably last for decades at low rates. Does the owner have her Division Order paperwork?
This section has quite a few multi-section wells-one set to the north with section 14 (Boles) and the other section to the south into 26& 35. The McClelland wells are not perforated in section 23 though.
Boles 1H-14X-37.0144%, 2/12/13 active date on the OTC site, so close to first sales.
Boles 2H-14X-64.9853%, 2/28/14
Boles 3H-14X-66.3366%, 8/25/14
Boles 4H-14X-64.8813%, 8/28/14, well essentially dead
Boles 5H-14X-66.6019%, 8/28/14
Boles 6H-1X-64.7473%, 8/28/14
Clarence 1H-23H-100%, 5/26/15
Section 20-2N-5W 1 mineral acre- no leasing in the section since 2014. Last poolings in contiguous sections were back in 2015. Sec 17 $2200 1/8th, $2000 3/16ths, $1500 1/5, $0 1/4th. (9/3/15 order oil prices at Cushing according to eia.gov were $45.48 for Henry hub gas prices 2.66 prorate down to today prices.) Sec 21 $2252 1/8th, $2000 3/16ths, $1500 1/5th, $0 1/4 (8/4/15 order oil 42.87/bbl, gas 2.77/mcf prorate prices to today. Sec 16 -same (order date 7/27/15 oil $50.09/bbl gas $2.84 pro-rate down to today’s prices. Horizontals never drilled so value would be even lower since no proved production in the 9 block area. Cushing prices are lower than WTI. WTI today was $24.84 and gas was $1.88, so oil is roughly half of what it was back then and gas is about 2/3 of what it was back then.
Section 9-2N-4W 1 mineral acre (leased and producing)
Wright 1H-9-100%, 6/30/12
Wright 2H-4X-66.1654%, 4/7/14
Wright 3H-4X-65.7888%, 4/7/14
Wright 4H-4X-65.5993%, 4/10/14
Wright 5H-4X-65.8004%, 4/14/14
Wright 6H-4X -66.824%, 4/16/14
Virginia 1H-4X~56.9189% 5/21/15
Horizontal wells give up about 50-80% or more of their volumes in the first four years of production. These wells have been online for varying years since 2012, but they have given up quite a bit of their value, so I would protest using the last six years of production to predict the future. That might have worked with vertical wells, but not horizontal wells. The rule of thumb for vertical wells was about four years of oil and seven years of gas if prices were stable. The decline curves of horizontal wells are very different.
The equation for royalties is net acres/spacing acres x royalty x % perforations in your section. So each well listed above will have slightly different DO decimals.
For example. Boles 2H would be 2.33/640 x royalty x 64.9853%.
If I were going to get a more rigorous answer, I would get a certified reservoir engineer who work up each well and based upon the decline curve of each well, the estimated economic limit for the well and the current prices would be able to give a close estimate of what each well is worth and roll it up to the section level and then to the acreage level and project out the future I did a quick look and the Boles and Wright wells look like they have given up about 75% of their predicted values. So I would not use the last six years to predict the future since only about 25% of the value is left. (Quick look by a geologist, not an engineer, but gives you a ballpark idea) Hope this helps a bit. Maybe one of the reservoir engineers on the forum can give an opinion.