I have partial ownership of land in Weld - 10N57W - that is in production by Whiting. Can’t say enough good things about Whiting. They had some curative requirements for several of us (all related), but as long as we were pursuing the curatives they paid royalties just as though they were completed (which they now are). Used a very good attorney in Durango, CO, for this work. His name is Floyd (Bud) Smith and his email address is bud@flslegal.com. Got quotes from Denver attorneys for the same work and I guess they thought we were wealthy new clients. Bud’s work was good, prompt, and completed for about 25-30% of what the Denver attorneys quoted me for having a paralegal do it.
Where does one find the current wellhead price in Weld County?
Thank you Jason. I’m a little surprised that it is a dollar amount instead of a percentage. Could it have been $12 less back when spot was around $40 per barrel?
Joe depending on the contract from the operator and the oil marketor it could range a few dollers each barrel between different marketors. I think the average in Weld is $12 less then the 30 day WTI (west texas intermediate) index. So if oil trades $100 per month average the operator will get $88 if the contract is $12 less spot. Hope that helps!
I have 70 net acres in 18 11n 57w. Whiting has a 5 year lease on the rights that is dated April 2, 2010. So, it has a little over a year to run. Whiting has filed a document placing this acreage into a 960 acre drilling unit including all of Section 18 and the south half of Section 7 in 11n 57w. Whiting is currently drilling in 10n 57w and is getting closer to me all the time. They completed two wells in 11n 57w that are producing over 3000 barrels per month. These wells are within 3 miles of the drilling unit. I suspect there will be action in the unit very soon. The document mentioned one well with the option to drill 3 additional wells in the unit.
The math: 70/960=7.3%, my interest in the drilling unit. The royalty is 1/6. 7.3%/6=1.2%. Therefore 1.2% of the total production in the drilling unit belongs to the mineral rights holder of this 70 net acres. I am told that rights sell for approximately 5 times the income produced. Maximum potential with present conditions would be the output of 4 wells. However, spacing could be altered in the future to allow more wells.
4 wells could produce 12,000 barrels per month or 144,000 barrels per year. 144,000 times 1.2%=1728 barrels belonging to the 70 acres. Wellhead price is approximately $90 per barrel at the present time. 1728 times 90=.$155,520.00 potential annual royalty. So at this time the maximum value of the acreage could be as much as $777,600.00 or $11,109.00 per net acre.
I’m getting along in years (77) and would like to dispose of the rights and not have to mess with it any more. I am asking $5000.00 per net acre.
I can be reached at joe@wiesner.ws.
Probably not that big an adjustment and no it’s not a percentage. Trucking to get the well oil to pipeline terminal or railcar dump is $3-5 per barrel alone. The Oil Marketor then makes the spread. Some Bakken oil is $22 less spot can you imagine that?
Bakken needs a pipeline. It is also probably a long way to a rail head. A sidetrack spur might help.
Seth-
Prices are all over the place. It depends on where your rights are located.
I decided I should probably offer a bit more information about this completed property thing. My family has mineral rights in 14 7N 67W. Noble started drilling there before they even knew who owned it. They finally got in touch with my cousin, who referred them to me because due to the genealogy I had been doing, I had more information than she did as to who is who in the family. We had no idea about any of this and the learning curve was huge, but finally, after almost 2 years ALMOST all of the family had division orders and were paid what had been held in abeyance as well as monthly production, like i said, except for one family. They still have issues, but our attorney got Noble to issue division orders to the rest of us in spite of that. So it has been going along smoothly for about the past year, then yesterday this letter comes, dated March 17, 2014, saying that Noble Energy Inc. has successfully completed the above referenced property. It goes on, and seems to be trying to verify my interest in the well. I assume other family members have received similar letters. Then it says this letter is intended to replace the traditional division order. We have all had a division order for quite some time. Do they have to issue a new one of those every year or??? We are totally confused;/
So what’s going on in Weld County now? Is there any progress being made?
“What’s going on”, and “Is there any progress” don’t mean much. About what"
Why, what is going to change in a few years? However I am not waiting at the mail box:) We had been receiving a SMALL check every month and I noticed we did not receive one in March and wondered if the well was done pumping or what. Never done this before so I am learn as we go…so far the learning curve has been very steep but I have made it over the hump so this is just a small bump in the road:)
I am told that we are not receiving royalty checks due to “high line pressure”. WHAT the heck does that mean?? Does this mean the end for our well?
One rational reason may be that the producing pressures in your well are less than the pipeline pressures the product is flowing into. I hear that Noble is building more gathering pipelines to alleviate the back pressure problem. As the well pressures in your well decline, and they do that naturally, Noble may have to put in higher pressure lines downstream of your well head to cause the product to flow into gathering pipelines.
Be thankful for the royalties and save them for a few years when you can count on them. Waiting at the mail box every month is not a rewarding experience.
Gary Hutchinson
does anyone know of any companies leasing in weld at this time ?
Judy: could you provide the legal description please.
The bottom one is in Prowers County
Family just started getting letters from Magnolia Mineral Trust LLC, wanting to buy the Mineral Rights we have in Weld County on the border of Morgan County, just North of Hwy 34. Does anyone have experience with this company and what are the Mineral Rights going for? We have 82 acres.