I own a very small interest in the Jimmy Unit wells in Atascosa County. I am considering an offer on it. Can anybody give me a ball-park estimate of value per mineral acre?
Dear Mr. Lane,
The best way to evaluate offers is to take past production and use a combination of the following
- Estimate Ultimate Recovery (EUR)
- Calculate Producing & Remaining Reserves
- Stretched-Exponential Curve and regression analysis
- Hyperbolic-Exponential Hybrid
- Harmonic-Exponential Hybrid
with
- Present Net Worth Profiles using the Discounted Cash-flow method
- Perform price sensitivity analysis
It sounds like a mouthful, but that is the way it should be done from an investment sale perspective.
Then again, one might just sell based on a small interest in a well, only to find out later that 4 more wells were planned.
I do not think that there is a higher expression of capitalism than the buying and selling of stocks, bonds and mineral rights.
Best
Buddy Cotten
Thank you for your response, Buddy. I will investigate further on your suggestions.
Buddy Cotten said:
Dear Mr. Lane,
The best way to evaluate offers is to take past production and use a combination of the following
- Estimate Ultimate Recovery (EUR)
- Calculate Producing & Remaining Reserves
- Stretched-Exponential Curve and regression analysis
- Hyperbolic-Exponential Hybrid
- Harmonic-Exponential Hybrid
with
- Present Net Worth Profiles using the Discounted Cash-flow method
- Perform price sensitivity analysis
It sounds like a mouthful, but that is the way it should be done from an investment sale perspective.
Then again, one might just sell based on a small interest in a well, only to find out later that 4 more wells were planned.
I do not think that there is a higher expression of capitalism than the buying and selling of stocks, bonds and mineral rights.
Best
Buddy Cotten
Mineral Manager