We are seeking an average value per acre for holdings in Sections 17,16 and 15 Block 34 and Sections 28, 29 and 30 Block 34. Offers range from a low of $16,000 to a high of $24,000 per acre for approximately 400 acres. Is there a certified appraisal service that does these evaluations. Thank you for your help.
The Directories list at the top of the forum page may have an appraiser. You can also find appraisers through their national association-International Institute of Minerals Appraisers. You will have to pick a petroleum appaiser vs the precious minerals like gold. Several of the engineers that post on the forum are also good contacts.
First, Block 34 is only half of the puzzle, needs a Township also. Either 34 T1N or 34 T1S.
Secondly, are your offers per mineral acre or per royalty acre? I would guess mineral.
I can tell you an estimate of what it’s worth with math and whatever if that floats your boat. Just for giggles, cause I have more time than is probably healthy and could use something to make my brain work. Would need better (i.e. full) legal description of what you own and your royalty rate. But in terms of certification, well, they tell me that I’m certifiably fresh and/or insane. If that helps.
Thank you for your interest in helping our family. The legal for the two Howard County parcels are as follows:
(1) the Southeast Quarter of Section 30, Block 34, Township 1 North, T&P RR Co. Survey
.0117187 NRI, 160 Unit Acres, 150 NRA…
(2) North Half of Section 15, Block 34, Township1-North, T&P Ry. Co. Survey, .10000 NRI, 320 Unit
Acres, 256 NRA.
Sorry been on the road. Thanks for the details, that clarifies any questions. That’s a nice chunk of acreage. It may take me a couple of days in spare time, but am familiar with where you are and what is going on.
I’d guess you are getting offered more on Sec 15 than 30 due to the Crownquest permits. But in general I’d say $24k/NRA where there has been no drilling is a pretty strong offer. That said, if your acreage gets covered with 20 wells per mile wide unit it’s worth a good bit more than that. It’s just a matter of will that happen, and if so when, and what will be the oil price vs +/- $8m bird in hand today. I’ll run through the math. No guarantees.
Thank you for the guidance… You know your business, your guesses are right on target. Here is what we know up to this point… there are 13 horizontal permits on 15 and none on 30. “Top Gun” is just to the west of 15 and the production has been extremely high. 15 produced very well about 10 years ago with only vertical wells, now all the permits are horizontal. 30 has the recent development of Crown Quest beginning horizontal drilling on 31. Don’t know if these developments impact the value, but I thought they might help. Thank you again for your experienced insight and guidance.
Yep, there are quite a few units next to you with what I would call “full development”. Basically what they are planning on W/2 of Sec 15 (and 18) with Tall Grass permits. 13 wells at once makes a lot of oil. That’s pretty much all you are ever gonna get, but its a whole lot, real fast. Lots of analogies. W/2 of 15 should be fairly simple.
Then just got to kinda guess when the E/2 of 15 and the E/2 of 30 will get horizontal. Which is inexact but fairly easy to do based on # of wells getting drilled nearby. Then try to discount some future cash flows back to today at some discount rate that is in line with a slightly riskier investment. Making progress.
Sorry I got dumped on at work.
Ok here are 6 slides that were all the math/thoughts that I had here, hopefully you can read them. I’ll see how many pics it lets me put into a single post. And yes, it would be far easier if I could just email you this but that way lies madness.
A+ work, @NMoilboy (as always!).
For what it’s worth, I’ve been doing a lot of work in the Howard/Martin area and my map I’ve created for those sections has $17k (for sec 30) to $28k (for sec 15) range as well. Depends on how much weight you put on the permits and the “non-proved” reservoir potential.
Incredible knowledge and insight. Thank you NMoilboy for educating us on the research and variables necessary to value Mineral Holdings. I hope everyone on this forum has an opportunity to view and understand your posting. Thorough, factual, focused and understandable.
Thank you again … You are a “True Gentleman and a Scholar”
No worries, happy to help. Good luck.
Excellent Reservoir Engineering work @NMoilboy
Still puzzles me why owners tend to take advice from land/attorneys for value help rather than Res. Engineers
Thanks. If you show a Reservoir Engineer a contract or a lease they tend to get dizzy and fall down, so I see the value from both sides.
Yes like I said, value help, outside of that good luck! haha