Selling royalties

Does anyone have any experience with selling their royalties for a lump sum payment? If so, who did you use and what formula do they use to calculate a fair price?

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Permalink Reply by Dexter Green on July 15, 2014 at 6:08am

What state, county, township, lease operator, total acreage, LOR?

Permalink Reply by Greg. Zborovancik on July 15, 2014 at 6:23am
Pa, Fayette county, washington township.chevron is well driller. A total of 160 acres with 30 acres being ours. My share is 3.125% of the 12.5%. Not sure what LOR stands for? There is a total of six wells in the consortium.
Permalink Reply by Philip Thackray on July 15, 2014 at 6:36am

Greg,

Are you in the Fayette Beagle Club Unit?

Phil

Permalink Reply by Dexter Green on July 15, 2014 at 6:59am

LOR=landowner royalty

So 12.5% total, you own 3.125%.  Your acreage is 18.75% of the unit so your NRI is .005859, or .5859%.  I don't know, if I was buying that I'd say maybe $30,000?  But then again what do I know?

Permalink Reply by Greg. Zborovancik on July 15, 2014 at 6:43am
It is the. Rosul unit, they are just finishing up on them. We are next to the beagle club unit
Permalink Reply by Greg. Zborovancik on July 15, 2014 at 7:28am
Later I will post the estimates that we received from chevron. It breaks down the acerage and other details.
Permalink Reply by Philip Thackray on July 15, 2014 at 7:48am

Greg,

I have been working on Net Present Value and Present Value calculations for Oil and Gas wells.  See attached PDFs and Xlxs Files.  My ultimate goal is to develop a method whereby landowners could get some idea of the value of their income stream.  Your situation should be relatively easy to analyze since there is so much production data for the Beagle Club.  That will give me a chance to develop my method with I have been planning to do.  I'll look into your situation - give me a day or two.  If you don't want the method and results posted here then friend me and I will take this discussion offline.

The attached analysis is underdevelopment.

Phil

Attachments:
Permalink Reply by Philip Thackray on July 15, 2014 at 8:00am

Here is the correct Kebler 1H.pdf

Attachments:
Permalink Reply by Greg. Zborovancik on July 15, 2014 at 7:51am
Phil, I appreciate your willingness to help. I will friend you and wait to hear from you. I really appreciate this.
Greg
Permalink Reply by Philip Thackray on July 15, 2014 at 7:56am

Greg,

The first pdf I posted above came off the wrong drive.  I can't edit that part of the post so I will delete that attachment and put the correct file in a post below the original.

Phil

Permalink Reply by Philip Thackray on July 15, 2014 at 9:03am

Greg,

To complete my calculation I need the total acreage in the unit, percent of your acreage in the unit and your royalty percent.  Privately if you want.

Phil

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