Replies to This Discussion

Permalink Reply by new guy on April 28, 2010 at 16:31

Thanks abubu! Wise observations, all!

Permalink Reply by DJG on April 29, 2010 at 1:34

100% agree with Adubu's opinion above. Perhaps if someone needs a kidney or is on the verge of being evicted, then go ahead and sell a SMALL portion of that those 1000 mineral acres.

Another party on the site recently saw offers as high as $10K/Acre for minerals in Shelby County. Not certain how legit those offers were, but I don't think you'd have too much trouble finding an offer of $5K out there.

If you really do need the money bad, then do yourself, your family and heirs a favor and only sell off 100 acres.

Most of the O&G companies are stating estimated EUR's in the 6BCF range for wells in this region of East Texas.

6BCF x $4.00 Gas = $24,000,000 total return per approximately 80 acre horizontal well.

Your per well return at 25% royalty = $6,000,000 per well.
Your per well return at 20% royalty = $4,800,000 per well.

Now if their estimates are off and you only end up getting 3BCF per well then considering you would own 100% of the minerals in each well then your own return is still pretty darn significant ($3mil or $2.4 mil per well).

Now also consider that to properly drain 1000 acres it could take as many as 10 horizontal wells for EACH strata formation and that your region does look to have pretty good odds of being productive in MULTIPLE formations (Haynesville, Bossier, CV sand, CV Lime, Pettet?, James Lime) then Adubu is not exaggerating to say that over the life of production that your 1000 acres could see as many as 40-60 wells.

So the math on that scenario is pretty darn staggering.

The down-side is that it could take 30-50 years or even longer to see that fully produced.

So, if you do really need some cash in hand right now, then just hedge your bets and sell a small portion.

Permalink Reply by king john on April 29, 2010 at 1:53

ross, if you are in a position where you "must" sell some intrest, a sell of deep only or shallow only rights is a good way to get a bird in the hand now, while keeping a couple of eggs in the nest. with the multiple pay zones, it preserves future income for you and your heirs.
kj

Permalink Reply by new guy on April 29, 2010 at 2:29

thanks john! good to know. i really appreciate it!

Permalink Reply by new guy on April 29, 2010 at 2:32

Gotcha! Thanks D.! I really do appreciate your input! Wow! Thankfully, Ross

Permalink Reply by adubu on July 14, 2010 at 0:25

new guy--did sonerra top lease you or did lease expire and someone other leased your minerals-hope if you sold you only sold 10% or less if sold what did you receive per acre--how the new release terms read? I am sure you saw the report from EOG on the Crane #1h at 31mmcfd IP---WOW

Permalink Reply by reallyoldguy on July 14, 2010 at 6:07

I think New Guy was top leased by EOG and is,in fact, in units with the Crane and Murray wells. Congrats to New Guy!

Permalink Reply by jffree1 on April 28, 2010 at 11:50

EOG would be the first company I would think of contacting in this area. Southwestern, XTO, Samson Lone Star and Cabot all have leases around Chireno. Sonerra is not your only option for a lease and I agree with j garrett that you should hold onto the minerals but if you do have a mind to sell, you can beat that offer.

Permalink Reply by new guy on April 28, 2010 at 11:55

Thanks for that. Is there a protocol for contacting these other producers? I don't want to be rude or unprofessional. . .

Permalink Reply by reallyoldguy on April 28, 2010 at 12:24

Ross: Go ahead and be rude and unprofessional! All of those operators are a bunch of snakes, anyway! LOL!

Permalink Reply by reallyoldguy on April 28, 2010 at 12:37

Ross: Typically the operators will contact you towards the end of your lease, if they have an interest. Frankly, Im suprised that you haven't heard from any of the operators by now. Does Sonnera have the option to extend your lease?

Permalink Reply by new guy on April 28, 2010 at 13:42

I'll have to check. . .

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