Replies to This Discussion

Permalink Reply by Ryan Gadworth on November 7, 2018 at 9:22am

Barbara, who is the company offering this?

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Permalink Reply by Barbara Toot on November 7, 2018 at 2:57pm

It is actually my neighbor who has since moved away. She is selling 84 acres but sold 50% of royalties to Gateway Royalties a yr or so ago.

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Permalink Reply by bo boboski on November 7, 2018 at 1:26pm

It's all about whether or not Encino ,who bought Chesapeake, will be drilling . Last I read about them is they plan on having multiple rigs running.

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Permalink Reply by Barbara Toot on November 7, 2018 at 2:59pm

Do you know a timeframe on this?

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Permalink Reply by Inchworm antenna on November 7, 2018 at 4:50pm

unless you are desperate a bad move to sell your Oil and gas rights for just that amount. Encino says they want to drill.  we have several more gas power plant plants in the works and there is the huge Shell Cracker plant and another in planning.  seems like demand will go up.  if you really need the money maybe a family member will invest in your minerals especially at the price you are considering 1 jeez they could get their investment back after just a few months (if that) of collecting royalties.  you also should think about possible devaluation of of the overall value should you severe the minerals from the surface.  Just things to consider.  Good luck. 

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Permalink Reply by Barbara Toot on November 9, 2018 at 8:14am

She is actually wanting to sell to me. I have an attorney doing a title search right now to find out details of the mineral rights.

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Permalink Reply by Bullfrex on November 9, 2018 at 9:14am

Please excuse me if I missed something. It appears as though she is trying to sell 50% of the OGM rights only, as the other 50% are owned by Gateway Royalties. I will assume these are undivided rights, which means no owns a particular 43 acres, rather an undefined half of every acre.

I am a bit confused by the 3 Clinton wells; are these on the property in question, or are they already drilled on other land you have. If it is the former, these rights must already be leased and HPB by the producer of the Clinton wells.

The price quoted is $581 per net mineral acre....that to me sounds too good to be true. While I know nothing of the E&P activity in your area, if the attorney finds the rights are in fact available to every depth with no lease in force.....buy it as a long term investment or to pass to your heirs....good chance it will be produced some day. 

If there is no lease to HBP, and even if it takes a few years.....the bonus amount for leasing will be at least 2-5 times that....without considering any royalty. Pretty good return, if you have the cash and wish to gamble a bit.

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