I am attempting to determine the value of my mineral holdings in McClain Co. Section 16-7N-4W E/2 NE/4. I also own interest in section 15, but I do not have an offer on that section. Also, how is NMA determined?
Welcome to the forum! The NMA or net mineral acres is the amount of acres you own in a larger legal description. For example the SW/4 of a section in Oklahoma covers a total of 160 acres. If you own an undivided 1/4 interest in the SW/4 then you would own 40 net mineral acres.
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Thank you for your prompt response…it was very helpful. The exact location is given as E/2 NE/4. Does that mean that I own 1/8 of a section? The buyer said that I have 1/8 royalty interest, but I have only 1.00 mmi. Is that correct?
It is unlikely that you own all the acreage in that description. The 1/8th royalty refers to the royalty provided for in lease or pooling order for your interest.
The E/2 NE/4 is generally 80 acres gross (unless you in a sections 1-6). You probably have a smaller subset of that as fractionation has occurred over the years. Your royalty is 1/8th or 12.5% of the total royalties. NMA is determined by a title search of passed what to whom over the years. Leases usually have the gross acreage on them.
Before entertaining an offer to buy, you need to find out about current royalties and wells, possible future wells, any royalties held in suspense if you just inherited, etc.
In your particular case, EOG has quite a few horizontal wells planned (7) and somebody wants your acreage!
Thank you very much for your responses…It was helpful in making a decision as to a counter-offer. The buyers first offer was $5,500/nma, but they claimed that I only had 1.0 nma.
It is possible that you only have 1 net mineral acre. You have to decide if the revenue from seven horizontal wells is worth more than $5500.
Thanks for the info. on EOG. Where can I find that information? Have the 7 wells been permitted or spuded yet. How will this effect my holdings in 15-5N-3W and 9-5N-3W in addition to 16-7N-4W? I will wait your reply before making a counter demand.
Pending OCC cases at the following link: Case Processing Online. The wells will not be permitted or spud until the OCC cases have orders. The Salt Water disposal well is already there, so that is encouraging. The wells will be in 9 & 16-7N-4W. Your other sections are 12 miles away and have no bearing on these. Here is a handy map to locate your minerals. McClain County Map.pdf (343.5 KB)
Thank you for the links…they were very helpful. I see what you mean about the location. Looks like I have more research to do.
Up-date on offer discussed in my initial post regarding my mineral holdings in McClain Co. I made a counter offer that was much higher than their initial offer…that ended the negotiation. However, I did receive an offer for purchase of almost ALL of my Oklahoma mineral holdings (30 different counties) with a check attached [$12,500]. Ironically it didn’t contain the McClain 16-7N-4W we discussed above. My question to you is: Is there an on-line map of Oklahoma counties that shows both existing and purposed well sites as well as the S-T-R lines? I need to evaluate the the current and future value of my holdings. Obviously, I do need to employ a Landman to help me as I do want to sell due to my age.
According to the MINERAL DEED AND CONVEYANCE OF INTEREST forms that accompanied the offer, there are 4,500 gross acres. I do not know how many NMA is contained on each individual deed. The holdings are mostly in central Oklahoma. I also own Minerals in Colorado and Louisiana, but they were not included in the latest offer.
Be VERY CAREFUL about such an offer. You need to research each of your tracts and find out what production you have, what potential production you might have in the future, who the operators are, etc. Not saying that you might not sell in the long run, but you need a whole lot more info before making a decision and to get the best price. I am uploading the map of McClain with the S-T-R on it. List the other counties and I will upload the ones I have. McClain County Map.pdf (343.5 KB)
They used to assign a value of non-producing mineral rights, of $100 per acre? That was for estate purposes I think ? If you had 4,500 acres that would be $450,000. Hard to imagine some of those 4,500 acres are not in decent location, since you have 30 locations.
Thank you for your information… that is 30 counties with multipal STR in most of them. They are all in O & G producing regions. Some have active wells that are paying RI (although not much due to the current conditions) I will entertain any reasonable offer. Should I post the list of counties on this Forum, or is there another way that I can publish my offerings? Not all of my MR were on the latest offer to purchase.
You most likely do not have 4500 acres. The “buyer” may be going from leases which usually have the gross acres on them, but not the net acres.
You can either put together the list of properties yourself, or you can hire a landman or minerals manager to help you. The first thing is to make a list. You can put your properties out to several mineral auction houses to made bids. I would never just go with one offer. There are a lot of companies out there right now that are buying the low in order to get royalties on the high side when prices go up-just be aware of that.
You have several options-keep the minerals, deed them to relatives or charities or sell them or sell some/keep some. If you sell, you may be subject to capital gains tax, so you need to talk to your accountant or attorney to get their advice on timing. I would talk to them first to get a strategy before posting anywhere.
The forum does have a place to list minerals for sale for a fee in the Marketplace area. Any auction house or mineral manager will also charge a fee. Normal business.
Thank you for your advice…you have been most helpful! I inherited these MR over 35 years ago and have only cashed the checks and signed the DO’s and Pooling orders with very little understanding of the O & G business. I have just recently started selling some MR due to my age (79) and my desire to bless my church with the proceeds. The past sales were based on gross acres…I am just now learning about NMA. I don’t expect to use your expertise without just compensation, but any assistance you can give will be gratefully appreciated. What should I do next? Is there a way to contact you?
I would suggest that you consult with your attorney and accountant so that you have the most advantageous plan for you.