Would it be beneficial to Sell our Royalties or Just Retain Them?

We currently own approximately 6.89 acres of land in Pultney Township, Belmont County, Ohio.  We are pondering selling our rights to our royalties.  As we often feel that we end up screwing up, we wanted to know if it would be to our benefit to retain the royalties or sell them out right to get a lump sum cash payment.  We could use the cash now and we have no idea if or when they may be drilling in our area.  Any suggestions would be greatly appreciated.

Views: 2395

▶ Reply to This

Replies to This Discussion

Permalink Reply by Dexter Green on July 16, 2014 at 8:03am

It really depends on any number of factors that are so far beyond your control and your ability to prognosticate that it's impossible to know.  Make the decision that's right for you.  If you're good at investing your money then you could likely outperform what your royalties would have been over a 15 year period.  Unless there's another recession and you lose 40% in six months.  See what I mean?  

Permalink Reply by Drb Bummy on July 16, 2014 at 8:17am

I see what you mean and thanks.  We were wanting to pay off a couple of loans and then take that money that we were paying on those and invest it.  To me it seems simple, take what they are offering, pay off that debt and then invest the $. 

We just thought something might be up because we have been calling various companies and no one wanted to purchase them as they were under 10 acres and all out of the blue, this guy I called about a month ago called me and made an offer - he told me he misplaced our number and just came across our notes.

Thanks for your reply. 

Permalink Reply by Dexter Green on July 16, 2014 at 8:28am

If you don't mind my asking who has been soliciting offers and who has been saying no?

Permalink Reply by Drb Bummy on July 16, 2014 at 8:42am

We received an offer from Vine Royalty out of Texas.  I cannot recall any of the others as I called quite a few and I did not write their names down.  As they said that they were not interested, I chucked the paper. 

Permalink Reply by Canter on July 16, 2014 at 9:41am

Drb

 I would have to say don't sell.

If you go by what i am getting it will look pretty good for you.    If you have up to three wells.

                                                                                                                                  acres                    month             year

 

  6.89      1 well                $ 2218.00     $ 26616.00

              2 wells               $ 4437.00     $ 53244.00

              3 wells               $ 6654.00     $ 79848.00

I would think that Belmont co. would do better than Carroll Co. Of course everything is rounded off and no one knows how long before you are in a unit.

Remember this is only for the first year.

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on July 16, 2014 at 5:03pm

Canter,

      How about letting me know if your royalties all at once nose dive. I"m on the Buck well and it's just paid for the first 3 months of production, an average of $100 an acre.

There are some very interesting "Adjustments" that were used to show the NGLs produced as a negative value almost as if we were charged for processing a large volume of NGLs, We paid taxes on each gallon, and were charged 12 cents per gallon. What happened to the fair market price on those gallons?   Like PA we paid to have our producer take our NGLs. Now I know why CHK is giddy on NGLs, no one is tracking NGLs.

This may be the start of the big push to use any means to produce money for all the expenses ahead for our producer for past thefts and big loans.

email me if you start seeing a royalty issue. Thanks  mrrxtech_yah@yahoo.com

Permalink Reply by Canter on July 17, 2014 at 4:50am

Ron 

 I have your email address and I will let you know.

Permalink Reply by Philip Brutz on July 17, 2014 at 5:10am

Canter,  how do your actual royalty checks compare to Boogers estimate for your well?

http://gomarcellusshale.com/forum/topics/odnr-releases-latest-produ...

Permalink Reply by Canter on July 17, 2014 at 7:19am

I cannot tell as of yet.  I haven't received enough checks.

On some of boogers figures,(which he has done a great job) the days of production for the second year seemed better than production for the first year. the monies was increased but that could be do to increase in NG and Oil prices. a lot of them did not appear to be that bad to me, but then I could be missing something.

Permalink Reply by Canter on July 17, 2014 at 11:10am

also mine is NG and Condensates which are about $80.00 bl.

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on July 19, 2014 at 1:23pm

Cantor,

        I had "Jeff" look at my royalty statement from the Buck well. He didn't see an issue but also hasn't seen a royalty check each month like you have.

Could you take a look and see if you recognize an unusual accounting error called an "Adjustment" for me?

I would think each time gas is paid there would have to be NGLs paid as well since the two come out of the ground together. The landowner of where the Wells were drilled made several calls to the producer before the first payment, and may have caused them to retaliate & show him who the Boss really is.

If I have Oil, Gas and half of my NGLs, what happened to your Oil, is no one trucking oil from your well?

I'll Friend you or you can use my email address to get a copy of the royalty statement if you have the time to look.

  mrrxtech_yah@yahoo.com

Thanks Cantor.   Ron Hale

Permalink Reply by Canter on July 20, 2014 at 12:45am

Ron,

 I have nothing called adjustment on my statements.  I do have plenty of ohio severance tax and frac fees , market fees, processing fees, compression fees.   No other taxes are taken out.

RSS

© 2024   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service