Hello. I am hoping someone can give me some advice. I have heard that Weld County is a highly desirable area for mineral rights. We have received an unsolicited offer for Weld County, Colorado T6N, R61W Section 5. Any advice on where to go to get multiple offers?
You are lucky because that township is a great area! Yes, it should be demanding high offers. In my experience, the first offer is usually very low and getting multiple offers is the best way to demand the highest price.
We usually tell me not to sell, but if they have to make sure not to leave anything on the table. One option not always offered is to only sell half of your interest and keep the rest for another day.
There are hundred of companies buying mineral rights right now. You can try to look up who is buying in your area using the county records or try your luck with Google. There are also landmen and mineral manager companies that would gladly represent you in the transaction.
Thank you for the advice. I will look into that!
I’m sorry I mean Dave
My parents always told me never sell your mineral rights because they don’t cost you anything to keep them and when your opportunity comes to lease them they are usually worth far more than selling them. Standard royalties are running at 18.75% and bonus payments from Wyoming in June was running at $5100 an acre.
You can’t give prices like $5100 just because someone somewhere in Colorado got that much per acre. Sorry but that area is not worth that price tag.
Thanks for the help I appreciate knowing this information!
K11 is correct. NEVER assume your property is worth what someone else either was offered or accepted. The value of your mineral property is mainly driven by the location (geology changes) and commodity price. The section you described does have some activity nearby, but the PDP (proven-drilled-producing) in the area has been very, very poor. Since oil and gas mineral value is directly tied to production performance, saying the property is worth a $5100/acre bonus with a 18.75% royalty is incredibly optimistic.
The map below shows that High Point Resources has permits over sections 5&8 in a 1280 spacing unit. There is also a producing well (Greasewood 4-8H) in section 8. You can see that the well has been producing for 5 years and has yet to CUM (produce in total) 30k barrels of oil. That isn’t good. However, completion efficiencies are improving in the area and you should expect future wells to have better performance as long as the operator adopts the newer strategies.
This well (Greasewood 4-8H) and others like it ultimately determine the value of your property. Right now the wells that have been drilled in the immediate area have not done very well. However, as soon as an operator drills a good well in the area, your property value will change quite drastically.
Leasing and selling is always a bit of a gamble unless you actually understand what your property is worth. There are several companies out there that offer mineral valuations. I would highly recommend getting an idea of what your minerals are truly worth before making any leasing or selling decisions.
I hope this helps.
Thank you so much, Craig, this is very helpful.