Several months ago I posted a link to a spreadsheet that I created calculating royalties that may be received from wells similar to the Spencer #1115. The values on the bottom of the sheet were calculated using a 100 acre unit with one well. Values are $/ACRE/YEAR. Here is the revised spreadsheet:
Condensate collected at the well could add as much as $4.00/Mcf. The value of the initial production of a well producing 5,000,000 cubic feet of 1200 btu gas and liquids per day could be $50,000 per day.
Bob, you seem to understand all of this stuff. My grand father willed me the mineral rights to 290+ acres in western tyler county. I have started the title search with the landman representing Antero. An attorny reviewed the leases and I signed. Its been 4 months and the title research is still ongoing. Landman says they will research back to 1865. He also stated that since they go so far back, a lot of people who think they own mineral rights are greatly disappointed to find out they don't. Your thoughts?
Also, I'm not really sure how to read your spreadsheet. If the title is clear, what should I expext in royalties over the next 5 and 10 year periods.
Thanks, Bill Garrison.....new member
Bill, I have no knowledge of title issues, but I understand that verifying title in Tyler County can be a nightmare. I own real estate and minerals in Tyler Co. and post information on GMS in an attempt to educate folks of the potential value of their minerals. I do not claim to be an expert in financial matters. In your case I believe that a very, very conservative estimate of royalties you could receive from your natural gas and natural gas liquids over the first 5 years of production would be $1,000,000, $5,000,000 over 25 years. Future development of the Utica and upper Devonian shales could add to these amounts. Bill, I consider this an educated WAG (Wild Ass Guess ), but I truly hope that it is a conservative estimate of royalties you and others in a similar situation receive over the upcoming years.
Thank you very much. That was helpful. Bill
Bob, William Garrison again. Thank you for your wisdom last Feb. Any changes to your spreadsheet given LNG, upper devonian or utica developements in western tyler county? TX Bill
Bill, I assume that Antero's title work confirmed that you own the minerals for the 290 acres? If so, congratulations. I hope you get a well soon. Sorry but I don't have any additional information on the Devonian shale. I am pretty sure the Utica shale in Tyler County will be dry gas and it will be several years before it will be developed. I have a friend with 4 acres in a Chesapeake unit in Ohio County who has received over $100,000 in royalties in less than 1 year. I know it isn't Tyler County, but it is wet gas and it is Marcellus shale. It just indicates what could be possible.
Bill, here is a Range Resources, Adobe Acrobat presentation that has maps on pages 11, 12 and 13 indicating that Tyler County is in the wet gas areas for Marcellus and Upper Devonian shales and dry gas area for Utica shale. I would guess that they will eventually all be developed. Your lease should be producing natural gas for many years.
Bob, sorry for the delayed response. Thank you for the
Bob, is there benefit to all of us mineral rights owners of a craker plant near Parkersburg, other than the obvious jobs? Also, what are companiies getting ($ btu) for the wet gas vs, dry gas?
Always appreciate your wisdom! Bill
Bill, currently any ethane removed from the wet gas needs to be transported to the gulf coast or Canada to be "cracked" to ethylene which is then sold to plastic manufacturers. If the ethane is not removed, much of it is combined with the natural gas (methane) and boosts the btu value resulting in a higher price for the natural gas. It may boost the price received for the gas by 5-10%. Currently dry natural gas is selling for about $3.85/1000 btu. Natural gas having a btu value of 1100 btu (boosted with ethane) would sell for about $4.23. I think some of it is combined with the propane but I don't know what it does to the price of the propane. The ethane would yield more in royalties if it could be removed and sold to a cracker plant locally, avoiding the cost of transporting it to a plant a thousand miles away.
Im assuming the cracker plant proposed for the Parkersburg area would alievate the transport concerns. they could ship it down the Ohio river. Hopefully that would increase the price.
Thanks as always for your insight. Bill