Frontier.pdf (84.2 KB)
This map shows your minerals in yellow. The green circles represent producing oil wells, with the size of the circle proportionate to the production volumes. The producing formation here is the Frontier sandstone at approximately 13,000 deep. Drilling here is difficult and very expensive. Well costs are in the teens of millions.
The big green circles just north of you are vertical wells drilled 20 years ago in a geologic sweet spot.
Horizontal wells in this area have thus far had marginal results. Note the well just to the south of you which was a dismal failure. The two wells to your east would not be considered successful even though they made decent oil, simply because the well costs are so high relative to the production.
The horizontal well to the northwest is a decent well and there are 5 wells currently drilling around it as shown in purple…
The current activity has created some interest in your minerals.
One way to look at value would be to estimate the reserves per acre. I estimate the well in Section 12 will produce close to 400,000 bbls of oil. These wells are spaced on 1280 acre units and there could be as many as four wells drilled in each unit. That gives 4 x 400,000 /1280 = 1250 bbls/acre.
Assuming a 3/16th royalty would give you 234 bbls per acre. Recognize that figure is pretty speculative.
Compare that to how much you are being offered per acre, recognizing that the royalty payments will be spread out over 20+ years vs the sale wold be a lump sum. Also take into account that there is no guarantee that the drilling activity will continue moving in your direction.