What to expect in payout from a producing gas well

Oil and Gas Leasing Help
1

I have 20 acres in Washita Co., ok. It is leased to Chesapeke Expl. 'til 10-11-12. It has 3/16 royalty if it produces. I recently received an offer of $1600 an acre to buy from me. I don’t have any experience or know anyone who has about the payout from a producer. I know there are many variables and no one can tell me a number. I just want to know something that I can base a decision on. What does a low producing gas well pay vs. a med. producer and a high producer? If I don’t know the possiblities how can I make a decision?

2

Dear Sandra,

I don't know about your County, but I can give you an idea of what I'm getting off two gas wells in Texas Parker County, for 7 net mineral acres. My Grandfather had a Mantra you should take heed to. Sell the Surface, never sell the minerals. Now your situation may be different. These two wells are almost two years old now and we're getting approx 9,000 a year from them of course with gas prices weak. Here on the forum you could read that some gas wells pay out for 20-30 years, I can tell you some of my Grandfathers Wells have been paying since 1923. If you sell your minerals, you are giving up rights to future leases. And be sure if you do this to get attorney to help you, the fine print of the mineral buyer could take all minerals you own, not just that one area. It's not a good deal, especially now, if you toss that letter you got, you will see that the next letter will increase the offer, and they really want you to make a division before your wells come in. I suggest you wait till they come in. Your giving away a large amount of money, that you could just as well leave to your kids.

God Bless,

Chris Wilson

3

Sandra:

If you don't need the cash at the present time, the advice Mr. Wilson gave you is very good. I have always had the philosophy to never sell minerals unless your financial conditions warrent immediate cash. I have personally seen individuals who regretted the sale of minerals in areas which are making major bucks at the present time. It's your decision to make, but be sure to research all aspects of the situation before making a decision.