Royalty Utica Hubbard H3 well in in Brook County

Just wanted to let everyone know that that Utica Hubbard H3 well in in Brook county is paying $ 65.00 dollar royalty on 11 acres of land  and that is at the well head with no deductions and 18 %. I think we are we are being shafted.  Southwest will not return my calls to answer question on my statements and they appear to be no better than CHP was. Is there anyone how can help get some answers as to what is going on with this well? Any help would be appreciated.   Buy the way.   Yesterday I was offered 60 k for my royalties and the guy knows what it is producing !  What's up with that!!!

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Permalink Reply by Joseph-Ohio on June 9, 2015 at 7:38am
I'd have to guess that the outfit that wants to buy your royalties expects to make a lot more than the $60k he's offering and in the not too distant future to boot.

$65 x 11 acres = $715 per month. At that rate it would take about 7 years for the investor to recover his $60k. To me that seems like too long of a time to recover the investment - how about you ?

Is there any affiliation between your producer and the outfit making you the $60k offer I wonder ?

Another question in my mind would be if you choose not to sell would your well's return increase ?

Is this scenario actually the industry / your producer and investor working in tandem to steer / guide where / in whose hands the money ends up landing ?
Permalink Reply by Ronald Raymond Burda on June 9, 2015 at 10:52am

NO YOU GOT IT WRONG  65.00 is for all 11 acres its more like 77 years to break even

Permalink Reply by Joseph-Ohio on June 9, 2015 at 1:48pm
Wow - much, much worse than I guessed then.

Who would invest $60k on the basis of recovering only their $60k investment after 76.923 years ?

I wouldn't.

That was my point using $65.00 per acre per month x your 11 acres and a 7 year investment recovery term to begin with.

Got that much right then don't I ?

Now, what about the other questions of serious concern ?
Permalink Reply by Trapper on June 9, 2015 at 8:36am
I have read on GMS of companies having straw buyers out there.
No way I'd sell,no way,no how!
Permalink Reply by Ronald Raymond Burda on June 9, 2015 at 11:13am

I don't intend on selling and I don't know what a straw buyer is but I put this personal  info out to show just how much crap is going on. No one will help the little guys. I have contacted my state rep. and have had the phone shuffle to everyone they could think of. If the well is choke down, don't we have a right to know ? Don't we have the right to know if it is a flop? Is their anyone out their that has this info have the guts to open up their mouth and give us the truth?

Permalink Reply by Trapper on June 9, 2015 at 12:18pm
I would have to say your well is obviously a flop if these royalties are a true representation of the production.

Straw buyers are front companies set up by the o&g companies to purchase mineral rights so as to "cut out the middle man" and hog all the profits!
Permalink Reply by Joseph-Ohio on June 9, 2015 at 2:11pm
I think what Trapper means by a 'straw buyer' would be some entity working for another and trying to buy 'on the cheap'.

Have to ask yourself what would the motivation be to entertain such an enterprise ?

Especially if in reality what was being purchased wasn't worth much.
Permalink Reply by Ronald Raymond Burda on June 9, 2015 at 2:46pm

Joe I miss lead you the 60 k was not on my 11 acres it was based on my 20 acres 9 of  witch is not in that unit . That doesn't change the math your 7 yrs is more believable but I am sure that more people know what is going on with this unit then just one buyer.

Permalink Reply by Joseph-Ohio on June 10, 2015 at 5:54pm
A 7 year ROI is still unbelievable but your 77 year ROI blows it out of the whole unbelievable park !

It just don't add up (unless the outfit making the offer is looking for a mark (or marks) to exploit).
Permalink Reply by Ragnars Repo on June 9, 2015 at 9:06am
Is that $65 per acre, or total on 11 acres?
Permalink Reply by Ronald Raymond Burda on June 9, 2015 at 10:54am

$65.00 for all 11 acres

Permalink Reply by Bill Barnaby on June 9, 2015 at 9:08am

Don't sell it, unless those wells are down right awful, they're shut in or choke way back.

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