WTI - 76.25
NG 6.27

NG has been making a pretty good run going into the colder months.

https://oilprice.com/

Yeah NG hasn't been above 4.7 since 2018.

NG price has really changed our lives this year...and our taxes!

Finally, I wouldn’t be surprised if we don’t see $8 NG and $100 oil EOY

I know the Alabama farmers are not liking the increased costs of their fertilizers.

Everything is going up,...wonder why (insert sarcasm) .

I heard barrel price of WTI may well be $90 by end o' year.

I really like the direction NG is headed. It’s been awhile.

X10000000

I'm in Midland now makin my rounds, come on with it!!

Not much drilling going on right now (That will pick up.) but what I'm seeing is a whole lot of fracing taking place. There's been a bunch of horizontals drilled in the last 16 to 18 months but they held off on the fracing until prices came up and since the back roads are a cluster muck of rigs and sand trucks racing from well to well. With our wet gas out here we're loving the higher price and the lower operating cost.

Yessir, I'm on the equipment manufacturing and service side of fracing and there has definitely been an up tick in the amount of work we are seeing. It would be really cool if it last a while this time around!

Let's Go!

What type of equipment do ya deal with? I’m in heavy equipment parts and have some good customers out there. I’m always trying to see what’s needed out there to either get my manufacturers to get stuff out there or some of my guys in Houston to get product out there…especially these days!

Yeah I’m getting weekly calls to see if I want to sell producing mineral interests. That’s up from once every six months so that’s my barometer for the way people think the price is going to go.

Yeah, constant barrage of letters and sometimes calls to sell interests.

We just had a 'Super-Well' drilled last year and already had 5 regular wells. So....half of my junk mail each week is offers.

Can't imagine who would be stupid/desperate enough to sell their interests for the prices offered, but someone must be doing it.

What is a Super Well?

I sold a small piece about 4 years ago. Had to think about it a little and run some numbers but buy the time the royalties were split among all the mineral owners and taxes paid I was better off selling out right. They completed the well about a year later and it came in well under predicted potential and high H2s gas content. (Could have told them that when I found out the depth they were drilling), RRC started giving them hell and they shut it in and moved the battery to another location. Haven't checked lately but I've heard they plugged it. They lost a ton of money and the mineral owners made little if any. Took that money and bought a little bit more of some production I was already into. It wasn't much but with oil over 80 today it turned out to be a good move. It will never make me a millionaire but it will buy a few guns, it's going to have to get over 100 before I can afford to buy ammo for them.

Ninety five percent of the time I'd say never sell minerals but there's that five percent when your just sitting on a situation that you'll never benefit from. Yes there's the possibility that they or someone else may decide to try again (Might work if they go about 1500 ft deeper) but that's years away and I may not be around then. Right now it was a good move, 10 years from now I may regret it, one thing I do know is I'm now making a little money from the money I received.

I buy royalties as a profession, and I’ve even sold some. There are many situations where selling can make sense. Reasons I’ve sold:

1- owned in a 160 that was “donut holed” meaning all off-set sides to my tract were fully developed horizontally, making development of the 160 highly unlikely if not impossible.. A private equity fund was desperate to deploy money and offered a good price, so I sold it.

2- big company like chevron or Exxon owning minerals in the same tract I owned. These guys are tough to get a lease from, and most times, the lease form they won’t budge off of is 30 pages and nearly impossible to stay in compliance. This makes tracts in all but the most desired places nearly impossible to develop.

3- knowing more about the geology in the subject tract than the buyer.

Grandpa’s old saying “never sell your minerals” isn’t the gospel it used to be.

I had a quail hunting friend who was in the gas business. He repeated that he could start hiring his realities when gas hit $3.

Excellent clarification and thanks. I learned something today.

Mom's 1st cousin sold her share of minerals under our small family tract in 2020. She's stupid and was a thorn in the family's side for 60+ years...until I sold our share of the surface to a neighbor. Now I just look forward to the email at the end of the month notifying me of what's been deposited into my bank account.

All this talk about NG, and I’m still not getting my royalty payments I hate dealing with these scumbags

Which group of scumbags are you dealing with?

Yeah mine is 4 producing wells near artesia wells. Very little risk and nice mailbox money. Their offers are typically very lowball, but if I needed quick money I guess I’d sell. But I’m doing more to retire and relax so I don’t need a lot of $.

Most of those offers that come unsolicited are low ball and usually pretty close to the appraisal district value. Royalty interests trade for a multiple of monthly/annual income. The multiple depends on if there is potential for additional development on a property set. That's why you tend to get those offers when a permit is issued or a well has been successfully completed in the area. The economic life of the production is also considered. Royalty interests within a productive lease with multiple additional drill locations can bring 100x the monthly income. Banks typically loan a 25-36x multiple on royalty interests.