Replies to This Discussion

Permalink Reply by Rock Man on July 15, 2022 at 5:43

Have you checked TX RRC site for any filings?

Permalink Reply by Skip Peel - Mineral Consultant on July 15, 2022 at 5:54

In order for anyone to comment on the $ offer per acre, there are a couple of facts that are required.  The first is the royalty fraction in the O&G lease burdening the mineral right.  The second is the status of wells.  I suspect, without looking, that there are two wells newly drilled in the unit.  Are those the only wells producing?  The total unit acres owned is of interest but basically doesn't inform the value per acre as much as the other two questions.

Permalink Reply by James Michael Nations on July 15, 2022 at 5:59

I was told 4 wells drilled with another 4 planned. i own 175 Ac. It is part of the original Whitton unit of which I own .0183 

Permalink Reply by Skip Peel - Mineral Consultant on July 15, 2022 at 6:01

Well that's part of the relevant information.  Do you know the royalty fraction?

Permalink Reply by James Michael Nations on July 15, 2022 at 6:05

It was part of an old lease with a lot of family tracts of land  most was leased at 1/6 and some at 1/5

Permalink Reply by Skip Peel - Mineral Consultant on July 15, 2022 at 6:12

Then it would be important to know how many acres are one sixth and how many were one fifth.

Permalink Reply by Bill R on July 15, 2022 at 6:14

Also a Whitton Family member... own .0007141 (?)

I received an inquiry phone call as well... $16K/acre and 20% (1/5)

After the initial call, have heard nothing! Looking forward to hearing more. 

Permalink Reply by Skip Peel - Mineral Consultant on July 15, 2022 at 6:19

Bill, that would equate to $10,000 per royalty acre which is a reasonable, fair market offer.  The questions are:  was that a fishing expedition and possibly a "bait and switch" approach?  And it is the best available offer?  Good luck.

Permalink Reply by jffree1 on July 16, 2022 at 0:30

Remember the offer I discussed with you week before last? They came up another $300 per NRA to $6800 per and that's in a unit which does not yet have a HA well but is in near proximity to HA drilling.

Permalink Reply by Skip Peel - Mineral Consultant on July 16, 2022 at 3:32

Here is what I remember and that I think all mineral owners considering a sale should keep in mind.  The level of competition to acquire mineral rights prospective for the Haynesville/Bossier shales has ramped up significantly over the last 10 or so months.  Many companies previously focused on the Permian Basin are now actively prospecting for Haynesville rights.  For the first twelve to thirteen years of the Haynesville Play, the top of the market was about one half what it is today.  Was $5K per Royalty Acre, or $10K for an acre with a quarter royalty lease.  Now $10K per Royalty Acre, or $20K for an acre with a quarter royalty.  In my experience few get the $20K/RA without some additional attributes beyond the royalty fraction.  The Sacagawea Unit is a good example as it meets two priorities that buyers value:  completed wells not yet in pay (a quick return on an investment) and additional wells in the not too distant future.  What I remember and I think many of the members will is the run up in bonus per acre offers in 2008.  $5K was stunning to those in the know but when offers increased significantly and rapidly after that the general public acted as if that would continue indefinitely.  It didn't.  It lasted about five months and then without warning collapsed to about one tenth of the previous dollar offers.

Prices/offers go up and go down and rarely provide a signal when a change is imminent.  Trying to time the top of mineral offers is like trying to time the stock market.  For those who are interested in monetizing their mineral rights, this is a good time but waiting and trying to squeeze the last dime out of a mineral interest is a risky proposition.

Permalink Reply by jffree1 on July 15, 2022 at 6:18

No completion paperwork filed yet. There are four bore holes for two sets of stacked laterals which were spudded back in December. There are two sets of allocation stacked laterals they began permitting for in May which do not have a spud date recorded yet.

Permalink Reply by Skip Peel - Mineral Consultant on July 15, 2022 at 6:20

Thanks, Julie.  That helps.

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