Here is where your tract is located.
Note the patches on the map that are covered with green lines. Those are horizontal wells. The unit just south of you has 31 horizontal wells drilled by QEP. That is an outlier, but that could possibly happen on a long enough time frame. There are also a whole lot of places that don’t have any horizontal wells. The game is this, somebody offers you significantly more upfront than you are currently getting and bets on Hz wells drilled in the future. They do this many times, in many places. The places that get a lot of wells drilled make them a good bit of money, they lose money in the other spots. If they do the math right, and don’t make any crazy assumptions about rig activity or oil price, they make money on average. Obviously if they can get people to accept lower offers then they do better.
As an individual owner, you don’t get to diversify. You either get wells drilled or you don’t on some finite timeline. There is usually a price where it makes sense to give up a little bit of your average value to grab a sure thing. New York money is a good thing as it brings in people who will accept a lower rate of return and thus can pay more, despite whatever stigma may be attached to New York money.
I don’t know what Guidon is going to do. Guidon has dropped rigs and is just running 2 in the Midland Basin. The odds that they come to your lease in the near future are low.
The Ernestine lease is, as far as I can tell, 196.5 acres. If you and your sister have a combined .002478 decimal there, then you have:
196.5 x .002478 x 8 = 4.32 net royalty acres combined
Next to highly developed unit
Mediocre operator in terms of likelihood of near-term development
Mediocre offset well results
= Worth > 3 times the $12500 you were offered combined. I personally don’t think selling is crazy but I wouldn’t sell for $6250 each.
Random stranger on internet, take with appropriate grain of salt.