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Hi John,
A big part of your answer is that investors look at mineral rights a little differently than a landowner who might not have put any value on their oil & gas rights 10 years ago. Most mineral investors have a pretty long time horizon and they tend to invest in a lot of properties across multiple plays which allows cash flows to be more predictable than for an owner who owns one property in one location. Most of these investors do have industry exposure or knowledge which is similar to successful investors in all asset types. Many big money investors have owned or managed minerals for generations. From what I have seen very few operating companies own or attempt to buy minerals. Anadarko owns some minerals in our area and CHK had some kind of partnership with an equity investor to buy minerals a few years ago, but for the most part Companies do not seek to buy them. I suspect that most of the investor letters we are getting are speculative investors seeking to buy low and profit as development continues and price goes back up in the mid to longer term. The big driver so far has been drilling to hold leases. now that leases are mostly held, we should see development driven by economics and have more predictable cash flows.
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