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Re: Help, please mineral rights [Re: 7mag] #7501517 05/01/19 05:27 PM
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Grandma sold one of our long held family places last year. In an area of activity. Some wanted to sell the mineral some wanted to keep. Thankfully "my side" won and we retained 100%.

I cannot believe that some even considered selling them.


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Re: Help, please mineral rights [Re: 7mag] #7501523 05/01/19 05:39 PM
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UPDATE---------------------------------------------------------

So here is what transpired and part of it is my own deaf ears fault. I always have my wife re-communicate with the person(s) to verify prior to most everything. Yes the offer of purchasing still stands at 20 thousand. The kicker? They would pay 2,500 now and installments on the remaining 17,500. In a nutshell we would not get a lump sum of 20 Gs it would be spread out over several yrs.

In all honesty you can't beat these companies. They are at almost a 85 percent signers in our addition. With that the City does not have to interfere with the drilling etc.They are going to move forward with or without us. If we refuse the offer we get like 12 percent in royalties and that's it. I just said screw it and we signed like the others at 10,000 an acre and a 1,326 dollar check and 25 percent of the royalties. Over and done with and I truly only see the oil company making the money. But hey we retained our mineral rights, for what it is worth.


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Re: Help, please mineral rights [Re: glens] #7501528 05/01/19 05:44 PM
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Originally Posted by glens
2 opinions here but my 2cents,, Take the highest per acre offered and the royalties. That field should last a long time and even if pooled, will be money for a while. My Mom passed away a couple years back at 93 and still had small checks that she got from a field 80 years ago, inherited from my Grandpa and it has changed oil company hands many times. Kerr McGee was one. . Just make sure your not included on well costs to maintain. They (oil company) will and can hit you for all kinds of goodies for the oil company. Well service, roads and such if it's in the lease. There's a term for it but my feeble mind can't think of it. Ask one of your lawyer friends at the Wall Street Bar, Downtown Midland, if it's still there, and they can steer you in the right direction for beer money or hire one. Like the beer bought lawyer better if he has passed the bar exam. Heck your a young whippersnapper and you and your family will draw those dollars, forever or as long as it's a pumping and you don't sell and they drill. The brightside is you tell everybody that your a West Texas Oil Baron. Buy you a cheap 100 dollar Rolex and Hob-Nob.
texas


Landman says there are 3 levels and the first 2 should produce 16,000,000 of barrels per week. He says they are not even going to touch the 3rd level. The first 2 levels should keep them going for 20 yrs.

I don't know guys I just signed and over with. Like stated I may get a check every yrs for 30 bucks or 300 bucks, who really knows???? FYI some are wondering where I am close to or where the drilling will be? Look up Faskin Oil and Gas, we are just SE of it.

Last edited by 7mag; 05/01/19 05:48 PM.

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Re: Help, please mineral rights [Re: glens] #7501532 05/01/19 05:51 PM
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Originally Posted by glens
Long story short,,,Never get rid of mineral rights. cool2


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Re: Help, please mineral rights [Re: huck18] #7501533 05/01/19 05:52 PM
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Originally Posted by huck18
Originally Posted by Txduckman
What if your house falls into their sink hole??

I like the sound of $10K cash plus your acre % amount of $1,326 plus 25% royalties. Royalties though will be dwindled by your % of an acre though. Or just take the $20K... who knows. Is that calculation correct though? The $10K is just a bonus sounds like if that is the case. Should have bought rent homes there....



Are you serious? Do you realize how many wells have been drilled in W Texas? If houses falling into sinkholes were an issue everyone out there would be living in a sink hole.

Also they're not offering $10k cash plus $1,326. They're offering him $10k per acre bonus on his lease. He owns 0.1326 net mineral acres. x $10k per acre = a one time bonus payment of $1,326.00 (probably for a 3 year primary term lease). No one in there right mind is paying $20k for 0.1326 Net mineral acres, and if they are tell them to call me because we can make a lot of deals. LOL!

OP, what county is this in?



Midland County


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Re: Help, please mineral rights [Re: 7mag] #7501555 05/01/19 06:17 PM
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Originally Posted by 7mag
UPDATE---------------------------------------------------------

So here is what transpired and part of it is my own deaf ears fault. I always have my wife re-communicate with the person(s) to verify prior to most everything. Yes the offer of purchasing still stands at 20 thousand. The kicker? They would pay 2,500 now and installments on the remaining 17,500. In a nutshell we would not get a lump sum of 20 Gs it would be spread out over several yrs.

In all honesty you can't beat these companies. They are at almost a 85 percent signers in our addition. With that the City does not have to interfere with the drilling etc.They are going to move forward with or without us. If we refuse the offer we get like 12 percent in royalties and that's it. I just said screw it and we signed like the others at 10,000 an acre and a 1,326 dollar check and 25 percent of the royalties. Over and done with and I truly only see the oil company making the money. But hey we retained our mineral rights, for what it is worth.


Hopefully you had someone review your lease form before you signed it.

Never ever sign a lease that a company/broker landman hands you without strict review.

Contrary to popular belief you are not 100% at their mercy. You have a little leverage to negotiate - maybe not necessarily price - but clauses in the lease and the lease form itself.

You said you signed - but if you didn't actually sign yet - shoot me a PM and I'll send you my lease form that our partnerships use in Texas. Operator shouldn't take too much issue with it and it'll cover your best interests.

Last edited by Cochise; 05/01/19 06:34 PM.
Re: Help, please mineral rights [Re: Cochise] #7501582 05/01/19 06:54 PM
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Originally Posted by Cochise
Originally Posted by 7mag
UPDATE---------------------------------------------------------

So here is what transpired and part of it is my own deaf ears fault. I always have my wife re-communicate with the person(s) to verify prior to most everything. Yes the offer of purchasing still stands at 20 thousand. The kicker? They would pay 2,500 now and installments on the remaining 17,500. In a nutshell we would not get a lump sum of 20 Gs it would be spread out over several yrs.

In all honesty you can't beat these companies. They are at almost a 85 percent signers in our addition. With that the City does not have to interfere with the drilling etc.They are going to move forward with or without us. If we refuse the offer we get like 12 percent in royalties and that's it. I just said screw it and we signed like the others at 10,000 an acre and a 1,326 dollar check and 25 percent of the royalties. Over and done with and I truly only see the oil company making the money. But hey we retained our mineral rights, for what it is worth.


Hopefully you had someone review your lease form before you signed it.

Never ever sign a lease that a company/broker landman hands you without strict review.

Contrary to popular belief you are not 100% at their mercy. You have a little leverage to negotiate - maybe not necessarily price - but clauses in the lease and the lease form itself.

You said you signed - but if you didn't actually sign yet - shoot me a PM and I'll send you my lease form that our partnerships use in Texas. Operator shouldn't take too much issue with it and it'll cover your best interests.



This. I would have reviewed your lease document for free. Also I've never heard of ANY mineral buying company paying to purchase in installments. I still don't think you have the details correct. And if they are paying $20k for less than a 1/4 acre you should have taken that as that would mean they were paying over $80k per acre to purchase minerals (impossible).

Re: Help, please mineral rights [Re: huck18] #7501942 05/02/19 01:17 AM
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Originally Posted by huck18
Originally Posted by Txduckman
What if your house falls into their sink hole??

I like the sound of $10K cash plus your acre % amount of $1,326 plus 25% royalties. Royalties though will be dwindled by your % of an acre though. Or just take the $20K... who knows. Is that calculation correct though? The $10K is just a bonus sounds like if that is the case. Should have bought rent homes there....



Are you serious? Do you realize how many wells have been drilled in W Texas? If houses falling into sinkholes were an issue everyone out there would be living in a sink hole.

Also they're not offering $10k cash plus $1,326. They're offering him $10k per acre bonus on his lease. He owns 0.1326 net mineral acres. x $10k per acre = a one time bonus payment of $1,326.00 (probably for a 3 year primary term lease). No one in there right mind is paying $20k for 0.1326 Net mineral acres, and if they are tell them to call me because we can make a lot of deals. LOL!

OP, what county is this in?


It was serious to you, a joke for 7mag and others. trout

Re: Help, please mineral rights [Re: 7mag] #7502248 05/02/19 02:11 PM
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Do not take the $20k...

My grandparents have several wells and they got $40k off one dang well the first 3-4 months it pumped.




Last edited by BradyBuck; 05/02/19 02:14 PM.

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Re: Help, please mineral rights [Re: BradyBuck] #7502289 05/02/19 02:48 PM
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Originally Posted by BradyBuck
Do not take the $20k...

My grandparents have several wells and they got $40k off one dang well the first 3-4 months it pumped.






Do they only have 1/10th of an acre as well?


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Re: Help, please mineral rights [Re: 7mag] #7502466 05/02/19 05:48 PM
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If you take the $20000, you will loose all your rights, your kids rights, and grand kids rights to negotiate on that lot in the future. JMPO.

Re: Help, please mineral rights [Re: Nathan at Fork] #7502478 05/02/19 05:58 PM
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Originally Posted by Nathan at Fork
Originally Posted by BradyBuck
Do not take the $20k...

My grandparents have several wells and they got $40k off one dang well the first 3-4 months it pumped.






Do they only have 1/10th of an acre as well?


No but house lots go for way more than $20k.


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Re: Help, please mineral rights [Re: 7mag] #7502490 05/02/19 06:19 PM
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On .1326 of an acre with a 0.0000517 NRI they'll have to produce 100's of millions to equal the one time $20,000 payment in your lifetime, if it produces at the same rate for the next 60 years your children will be able to go out to dinner once a month.

The quick math on that is, a check for $52 for every 100 million produced. The 'quick math' may not be 100% accurate without knowing all the particulars, but it is close.

Re: Help, please mineral rights [Re: BradyBuck] #7502522 05/02/19 06:57 PM
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Originally Posted by BradyBuck
Originally Posted by Nathan at Fork
Originally Posted by BradyBuck
Do not take the $20k...

My grandparents have several wells and they got $40k off one dang well the first 3-4 months it pumped.






Do they only have 1/10th of an acre as well?


No but house lots go for way more than $20k.





No, they don't. Bring me a buyer at $80k an acre and I will load them up with 1/4 acre lots in Midland County.

The OP doesn't have the details correct. I promise you.

Re: Help, please mineral rights [Re: 7mag] #7502568 05/02/19 07:49 PM
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Simple math is not a strong suit on THF.

Re: Help, please mineral rights [Re: Rustler] #7502577 05/02/19 07:58 PM
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Originally Posted by Rustler
On .1326 of an acre with a 0.0000517 NRI they'll have to produce 100's of millions to equal the one time $20,000 payment in your lifetime, if it produces at the same rate for the next 60 years your children will be able to go out to dinner once a month.

The quick math on that is, a check for $52 for every 100 million produced. The 'quick math' may not be 100% accurate without knowing all the particulars, but it is close.


I already tried to explain that.

No one listens. Everyone hears the word oil and immediately goes to "never sell my minerals, gonna be a millionaire" when reality couldn't be further from the truth.

However - the OP said the broker offered for the $20K flat rate to be paid in installments. I manage a BUNCH of minerals, non-ops, etc and not once have I ever heard of this. Seems extremely shady and makes me very curious what shop is playing that game - cause I sure won't do any business with them.

Re: Help, please mineral rights [Re: huck18] #7502579 05/02/19 07:59 PM
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Originally Posted by huck18





Do they only have 1/10th of an acre as well?[/quote]

No but house lots go for way more than $20k.


[/quote]


No, they don't. Bring me a buyer at $80k an acre and I will load them up with 1/4 acre lots in Midland County.

The OP doesn't have the details correct. I promise you. [/quote]

Think Midland like Odessa has gone nutz!

County Rd 175, Greater Midland, TX
$35,000 USD
See more in: 79706
1 ac Lot Size Land

211 S Marshall St, Midland, TX
$40,000 USD
See more in: 79701
0.161 ac Lot Size Land


2902 S County Rd 1087, Midland, TX
$171,360 USD
See more in: 79706
2.04 ac Lot Size Land

Re: Help, please mineral rights [Re: Rustler] #7502585 05/02/19 08:03 PM
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Originally Posted by Rustler
On .1326 of an acre with a 0.0000517 NRI they'll have to produce 100's of millions to equal the one time $20,000 payment in your lifetime, if it produces at the same rate for the next 60 years your children will be able to go out to dinner once a month.

The quick math on that is, a check for $52 for every 100 million produced. The 'quick math' may not be 100% accurate without knowing all the particulars, but it is close.

http://www.uniroyalties.com/Oil_and_Gas_Royalty_Calculator.php
You are a bit off on you math for the NRI. Example: Size of property owned: 0.1326 acres Acres in Pool: 320(example) Minerals % owned within your property: 100% Royaltly % from your oil lease: 25% That makes a decimal interest of: 0.0001035937
His break even on $20,000 would be a total of $193,061,933 in production sales with his interest share on all wells in that unit drilled.


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Re: Help, please mineral rights [Re: stxranchman] #7502588 05/02/19 08:05 PM
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Originally Posted by stxranchman
Originally Posted by Rustler
On .1326 of an acre with a 0.0000517 NRI they'll have to produce 100's of millions to equal the one time $20,000 payment in your lifetime, if it produces at the same rate for the next 60 years your children will be able to go out to dinner once a month.

The quick math on that is, a check for $52 for every 100 million produced. The 'quick math' may not be 100% accurate without knowing all the particulars, but it is close.

http://www.uniroyalties.com/Oil_and_Gas_Royalty_Calculator.php
You are a bit off on you math for the NRI. Example: Size of property owned: 0.1326 acres Acres in Pool: 320(example) Minerals % owned within your property: 100% Royaltly % from your oil lease: 25% That makes a decimal interest of: 0.0001035937
His break even on $20,000 would be $193,061,933 in production sales with his interest share.


He's not wrong. He is basing it on a standard 640 acre unit.

0.1326 nma/640 ac unit x 25% royalty = 0.00005179687 NRI

Re: Help, please mineral rights [Re: stxranchman] #7502590 05/02/19 08:08 PM
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Originally Posted by stxranchman
Originally Posted by Rustler
On .1326 of an acre with a 0.0000517 NRI they'll have to produce 100's of millions to equal the one time $20,000 payment in your lifetime, if it produces at the same rate for the next 60 years your children will be able to go out to dinner once a month.

The quick math on that is, a check for $52 for every 100 million produced. The 'quick math' may not be 100% accurate without knowing all the particulars, but it is close.

http://www.uniroyalties.com/Oil_and_Gas_Royalty_Calculator.php
You are a bit off on you math for the NRI. Example: Size of property owned: 0.1326 acres Acres in Pool: 320(example) Minerals % owned within your property: 100% Royaltly % from your oil lease: 25% That makes a decimal interest of: 0.0001035937
His break even on $20,000 would be $193,061,933 in production sales with his interest share.


If that is right , and I don't know as I went to public schools, on a break even scale, 193 grand in oil sales would happen in a hurry in the Permian Basin oilfield on a good well. Heck I'd keep the rights and tell everybody I was a high roller like Bill.
banana

Re: Help, please mineral rights [Re: 7mag] #7502602 05/02/19 08:22 PM
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And to really put this in reality - the majority of the wells I see looking right at this very moment that have been drilled in or around Midland (city) have 8,000' + laterals - so these are not 320 or 640 ac units - they're more likely 1280 ac units.

So let's do the math:

.1326/1280 x 25% royalty = 0.00002589843 NRI.

We'll discount gas since its value varies from nothing to less than nothing in most parts of that area at the current time.

Based on oil alone - and it being more than likely a 1280 ac unit - his break even price on that $20,000 offer is $750,000,000 dollars. At $60 per barrel oil that is over 12,500,000 barrels of oil. Before any production taxes.

Say a well made 50K barrels per month (realistic figure) - at a fixed price of $60 that is 21 YEARS to break even - before any taxes.

Last edited by Cochise; 05/02/19 08:23 PM.
Re: Help, please mineral rights [Re: Cochise] #7502608 05/02/19 08:28 PM
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Originally Posted by Cochise
And to really put this in reality - the majority of the wells I see looking right at this very moment that have been drilled in or around Midland (city) have 8,000' + laterals - so these are not 320 or 640 ac units - they're more likely 1280 ac units.

So let's do the math:

.1326/1280 x 25% royalty = 0.00002589843 NRI.

We'll discount gas since its value varies from nothing to less than nothing in most parts of that area at the current time.

Based on oil alone - and it being more than likely a 1280 ac unit - his break even price on that $20,000 offer is $750,000,000 dollars. At $60 per barrel oil that is over 12,500,000 barrels of oil. Before any production taxes.

Say a well made 50K barrels per month (realistic figure) - at a fixed price of $60 that is 21 YEARS to break even - before any taxes.

And after 21 years that $12.35 cents a month or whatever will be rolling in. Oil Baron.

Last edited by glens; 05/02/19 08:29 PM.
Re: Help, please mineral rights [Re: Cochise] #7502610 05/02/19 08:29 PM
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Originally Posted by Cochise
Originally Posted by stxranchman
Originally Posted by Rustler
On .1326 of an acre with a 0.0000517 NRI they'll have to produce 100's of millions to equal the one time $20,000 payment in your lifetime, if it produces at the same rate for the next 60 years your children will be able to go out to dinner once a month.

The quick math on that is, a check for $52 for every 100 million produced. The 'quick math' may not be 100% accurate without knowing all the particulars, but it is close.

http://www.uniroyalties.com/Oil_and_Gas_Royalty_Calculator.php
You are a bit off on you math for the NRI. Example: Size of property owned: 0.1326 acres Acres in Pool: 320(example) Minerals % owned within your property: 100% Royaltly % from your oil lease: 25% That makes a decimal interest of: 0.0001035937
His break even on $20,000 would be $193,061,933 in production sales with his interest share.


He's not wrong. He is basing it on a standard 640 acre unit.

0.1326 nma/640 ac unit x 25% royalty = 0.00005179687 NRI

I understand that and that is why I stated I used 320 in my example(they are smaller units under towns down in the EFS due to all the landowners). His math is off in the $52 for every $100 million produced he stated. It should be around $5000 per 100 million if you use the 640 acres and it would around $10,000 per 100 million in my example.
We all are assuming his lot is only 5776 square foot also.


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Re: Help, please mineral rights [Re: Cochise] #7502615 05/02/19 08:33 PM
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Originally Posted by Cochise
And to really put this in reality - the majority of the wells I see looking right at this very moment that have been drilled in or around Midland (city) have 8,000' + laterals - so these are not 320 or 640 ac units - they're more likely 1280 ac units.

So let's do the math:

.1326/1280 x 25% royalty = 0.00002589843 NRI.

We'll discount gas since its value varies from nothing to less than nothing in most parts of that area at the current time.

Based on oil alone - and it being more than likely a 1280 ac unit - his break even price on that $20,000 offer is $750,000,000 dollars. At $60 per barrel oil that is over 12,500,000 barrels of oil. Before any production taxes.

Say a well made 50K barrels per month (realistic figure) - at a fixed price of $60 that is 21 YEARS to break even - before any taxes.

How many wells are they drilling in a 1280 acre unit in the better areas?


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Re: Help, please mineral rights [Re: Cochise] #7502617 05/02/19 08:35 PM
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Originally Posted by Cochise
And to really put this in reality - the majority of the wells I see looking right at this very moment that have been drilled in or around Midland (city) have 8,000' + laterals - so these are not 320 or 640 ac units - they're more likely 1280 ac units.

So let's do the math:

.1326/1280 x 25% royalty = 0.00002589843 NRI.

We'll discount gas since its value varies from nothing to less than nothing in most parts of that area at the current time.

Based on oil alone - and it being more than likely a 1280 ac unit - his break even price on that $20,000 offer is $750,000,000 dollars. At $60 per barrel oil that is over 12,500,000 barrels of oil. Before any production taxes.

Say a well made 50K barrels per month (realistic figure) - at a fixed price of $60 that is 21 YEARS to break even - before any
Originally Posted by Cochise
[quote=Rustler]On .1326 of an acre with a 0.0000517 NRI they'll have to produce 100's of millions to equal the one time $20,000 payment in your lifetime, if it produces at the same rate for the next 60 years your children will be able to go out to dinner once a month.

The quick math on that is, a check for $52 for every 100 million produced. The 'quick math' may not be 100% accurate without knowing all the particulars, but it is close.


I already tried to explain that.

No one listens. Everyone hears the word oil and immediately goes to "never sell my minerals, gonna be a millionaire" when reality couldn't be further from the truth.

However - the OP said the broker offered for the $20K flat rate to be paid in installments. I manage a BUNCH of minerals, non-ops, etc and not once have I ever heard of this. Seems extremely shady and makes me very curious what shop is playing that game - cause I sure won't do any business with them.



Yep. This is what I do for a living and I've never heard of ANY kind of mineral buy deal that pays in installments. Also NEVER heard of ANYONE paying close to $80k per acre for Midland County minerals. The hottest county out there is Reeves and no one is paying landowners anything close to that.

Lots of people just parroting the "never sell minerals" that don't have a clue what they're talking about. If someone offers you 5 times what they're worth on a 1/4 acre you'd be stupid not to take the money.

But like I said before the OP doesn't have the details correct. He's confusing bonus, royalties, etc...

Listen to Cochise, he knows what he's talking about.

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