Replies to This Discussion

Permalink Reply by RAZORBACK on July 16, 2014 at 4:53

$2600

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Permalink Reply by Two Dogs, Pirate on July 16, 2014 at 4:56

Sounds like a terrible deal.

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Permalink Reply by tony allen on July 16, 2014 at 8:24

Razorback,

In May of this year a horizontal pettet well was completed in S4 T20s R20w and it was very successful. There has been no completion report from the AOGC but the rumor is  the IP was 500 bopd, no water, no gas. Just goes to prove your point: Never sell minerals or royalties. Expect good news and money soon,if you are in the unit. Good Luck!

Permalink Reply by Robert Craft on July 21, 2014 at 6:39

I'm interested in the break even point for a $200K offer.  I have no experience in this area, but for my calculation I assume:

$100/BBL oil

25% royalty

77 net mineral acres ($200K/$2600) in a 640 acre unit.

$100/BBL X .25 X 77/640 X BBL Oil = $200,000

So 66,600 BBL oil would need to be produced to generate $200,000 in royalties.  Does this sound right?

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Permalink Reply by Aubrey C. Sanders, Jr. on July 21, 2014 at 17:30

Are they offering to buy your royalty or your mineral rights? There is a huge difference. All the offers I have ever received were for mineral rights. It would be very beneficial if you would post copy of offer.

I am not sure if I understand your question.?  I presume that you must be getting  about $50,000 royalty/year currently if you are talking about royalty from the  property.

Permalink Reply by Robert Craft on July 22, 2014 at 3:02

I was just trying to determine how much oil would need to be produced from a 640 acre unit that included Mr. Razorback's 77 acres to generate $200,000.  I disregarded the time value of money and came up with 66,600 barrels, which about is 100 barrels a day for almost 2 years.

Permalink Reply by iwana nipper on July 18, 2014 at 2:08

Yes, got a check in mail to buy ours at Macedonia. Threw it in the trash! We always lease ours. Always keep your mineral rights for you and your family down the line.

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Permalink Reply by Aubrey C. Sanders, Jr. on July 21, 2014 at 17:37

AMEN, AMEN

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Permalink Reply by chattykb on July 19, 2014 at 20:17

I usually throw them in the trash, but I had a relative that opened theirs and was shocked at the offer. I had to show them in the letter where it states it's subject to verification... and to the satisfaction of Southwest Petroleum.  I called them and spoke to a man who said Southwest Petroleum is a family business and they send a mass amount every day. looking to buy and as someone referenced, they buy the Appraisal's tax rolls and makes their offer according to that.  They have not done any title work.  Their offer is based on life of the well at 48 months (which is way too low).  He didn't say  the price per acre.

Thanks for your responses!

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Permalink Reply by iwana nipper on July 20, 2014 at 4:25

I have a sisterinlaw that is a landman and says if they offer a lot for your mineral rights, they know oil is there and will drill later on. My mineral rights come from my family way down the line and that check each month is alittle something extra that is free. When I pass on, those mineral rights will go to my family. We will keep on leasing that land and keep on drawing that royalty check.

 

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Permalink Reply by Aubrey C. Sanders, Jr. on July 21, 2014 at 6:05

Iwanna coon,

Bet you got bank draft and not a check(?)  !!!    There is a huge difference. There are a lot of companies with name of Southwestern in name. People in our area have been receiving such offers for years. My offers go to file 13. For those who do entertain selling minerals or royalties I advise them to check out and know who they are dealing with. Read all fine pint and see a lawyer. I will never ever sell my minerals.

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Permalink Reply by iwana nipper on July 21, 2014 at 6:38

Aubrey, are u from Macedonia??

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