I own a couple of parcels on which I have received bonuses. They are not drilled. I have received an offer to sell them. Research seems to indicate wells are drilled all around this Wetzel county area, so I'm wondering if I should hold them. My question is: for a 1/8 share lease, what should I expect in royalties from a well that initially produces, say, 3,000 mmcf/day. I understand the decline curve, but wonder how many dollars one would expect the first year from this hypothetical well. Any advice from a fellow landowner with experience would be very much appreciated.
Thanks in advance,
There are countless factors that would need to be taken into consideration. Firstly, if unitized, what percentage of the unit would you have a right to.
Without greater insight into the specifics, it is difficult to answer, but if I were in your shoes I would hold on to what you own.
Yes, there are many factors. But I'd really like some sense of what a 20 acre parcel might bring in. I realize there could be more than one well in the unit, but perhaps someone out there would offer some real dollar figure. I've heard of the transportation charges getting added, and whatever else, so what does a landowner actually receive from a decent Marcellus well, adjusted to my 5% of a unit ownership. Any suggestions?
Again, thanks to anyone who takes the time to respond.
William there has been a lot of discussion about this over the years and it depends on the prices at the time, your producer, your lease and deductions, your tax state/county, location and decline (gas pressure). But you can type in " Royalty Amount per Acre" into the search box at the top and it will bring up all of the posts from over the years. You can see that many go back to 2011. But if you scroll through them there are some more recent 2017, 2018. This will give you an idea. Just click on a heading and it will bring up everyone's answers about royalty amounts received per acre per month. You may have to do it this way because it's sometimes difficult to get people to come forward with this information most of the time.
Thank you. Wouldn't have thought to do that. Lots of stuff there, but worth the time to wade through it. Quite a variation from the couple I checked. I really appreciate the suggestion.