Should I sell?

I have minerals in 19-T15N-R16W in Custer County,ok. I had Citizen Energy contact me wanting to purchase my rights for $8100.00 for 2 acres. Is that a fair price? Seems low to me. Any help would be great.

Hi William, if you need the money than $8,100 may be reasonable. It's likely more than what you would make in several years of royalty payments. You can always ask them for a better offer.

Custer seems to be ramping up as I suspect almost all of W. Oklahoma will eventually. It is apparent that these high offers are coming from a new group of "investors" who are forming mineral companies and accumulating interests, mostly willy nilly upon the basis that they are trying to anticipate where the actual drillers are heading to... the "next big thing". So if someone is trying to buy, they suspect someone is wanting to drill in that area.

So it is a choice. Today with the high post-production expenses I see, I suspect selling might be better than holding but to hedge, sell half and keep half. I know a number of mineral owners who have not totaled $8,000 per acre for their production and it is likely they never will. If you don't recoup it within 10 years, then the time value of money suggests you really never will. An alternative investment would be better.

I have not checked Custer County in a long time but Blaine has some sales to $33,000/acre, and While Washita and Dewey Counties are less active, there are mineral sales over $3,000 per acre. Don't be bashful about asking for more...

I forgot to mention from alittle homework CitizenEnergy is merging or forming a company called RONE ENERGY and considering drilling a horizontal well. The landmans name is John Witucki with Citizen Energy.