Valuation of Mineral Rights in 2011


#1

Need help determining value of mineral rights in Grady County in 2011 when these were inherited: Sect 6, Town 9 N, Range 7 W Sect 9, Town 9 N, Range 7 W Sect 28, Town 8 N, Range 7 W Sect 31, Town 10 N, Range 7 W


#3

I don’t know whether they are producing or not. A little background - my husband and I sold those mineral rights in May, 2017. My husband passed away in August, 2018. He had filed our 2017 taxes and had noted a loss on those properties. In looking over the 2017 returns, my CPA found a couple of mistakes, not related to the mineral sales, and plans to file an amended return. However, he would like to have some basis for the loss my husband noted. I have been unable to find anything in his records to support that. The CPA needs something to support the claim of a loss should the IRS question it. Thus, my need for the values in 2011.


#5

August, 2011, when my mother-in-law passed away


#6

I cannot comment on their value with much precision, but I can tell you what the activity was in 2011.

6-9N-7W- August 2011 no production. No pooling in area, so no information on lease value that is public. Continental Resources and Concho land was leasing section 6 in 2008 and 2010 for 3/16ths. Value would have been pretty low. Current activity-Locke 1H-6 First production 1-2018. Roan Resources. Surface location is in 1-9N-8W.

9-9N-7W- August 2011 -no production. Continental and a few others were leasing in 2011 at 3/16ths. Value probably pretty low. No pooling in the area until 2017-18, so no public data on bonus values. Current activity Lensgraf 1-9-4XHM new well permit issued 11/15/18. Dobry 1-16-21-28XHM. Going south. No royalties in 9 on the Dobry. Continental Resources is operator.

28-8N-7W August 2011 -no production. Continental and Jackfork and a few others were leasing in 2008-11 at 3/16ths. Value probably pretty low. No pooling in the area until 2017-18, so no public data on bonus values. Drilling didn’t pick up in the area until 2013.
Current activity- Meadors 1-28H drilled in 2013.

31-10N-7W August 2011 -no production. Bearcat probably for Continental, QEP Energy, Schonwald Land and a few others were leasing in 2008-2011 at 3/16ths. Value probably pretty low. No pooling in the area until 2016-18, so no public data on bonus values from 2011. Current activity-lots of horizontal activity nearby, but no well in 31 yet.


#7

Sampling of mineral sales during August, 2011…

Section 11-8N-7W Book 4405 Page 468… $3,000 / acre for 9 acres

Section 04-9N-7W Book 4404 Page 315… $3,133 / acre for 7.5 acres

Section 36-9N-7W Book 4404 Page 309… $3,200 / acre for 2.5 acres

Section 06-9N-7W Book 4404 Page 307… $3,111 / acre for 2.25 acres

Section 35-9N-7W Book 4404 Page 305… $3,125 / acre for 4 acres

I would contend those sales were about 25% (or less) of the actual value based on recent comments by Continental Resources about their efforts to purchase minerals. I don’t know what basis your husband used unless there was something in your mother-in-law’s probate. Have you talked with the attorney who handled your mother-in-law’s probate?


#8

Thank you for all that information. That may be very helpful.


#9

Thank you so much. This information will probably be very useful. My mother-in-law had a revocable living trust, so there was no probate.


#10

Don, can you tell me where you get this sales info. I am trying to get comp values for 07-9n-5w.


#11

idocmarket.com , which is the online subscription site for Grady County Clerk filings. I looked at mineral deed (MD) sales for the specific time period mentioned above and further refined the search to only the specific range mentioned. The search returned 31 results.

The price per acre is determined by taking the Doc Fee divided by 1.5 times $1,000 = total sales amount. Total sales amount divided by the number of acres = price per acre

Note: The number of acres is not always given so a price per acre cannot be determined without additional research.


#12

Thank you for this additional information,Don, as well as all your time spent in researching.