Selling Mineral Rights

Tag: Selling Mineral Rights

ow-much-do-mineral-rights-sell-for-in-the-austin-chalk-south-texas

How much do mineral rights sell for in the Austin Chalk South Texas?

A lot of factors go into this answer, however, much of the value for minerals and royalties in the Austin Chalk depend on timing and when new wells are going to be drilled and what the price per barrel of oil and price per mcf of natural gas at present time and potentially what it […]

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7 Smart Reasons to Sell your Mineral & Royalty Rights

There are any number of reasons why an individual, family, family trust, company, or institution might want/need to divest some or even all their mineral and royalty assets. Here are a few of our own that you can consider:   1. Diversification and Portfolio Restructuring Most every person or entity with mineral and royalty assets […]

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In-House vs. Independent Landman: Which One is Best?

In-House Landmen and women are employed by an oil and gas firm or corporation. They are not allowed to, and do not, receive bonus payments or royalty dividends since their duty is to represent the company they work for. They do all the necessary legwork under the direction and management of the company they represent. […]

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Common Oil & Gas Terms

Get your metal lunchboxes and backpacks ready. It’s back to school with Oil and Gas definitions! Also, be sure to check out of FAQ page! There you will find a wealth of information with Q&A’s related to all things minerals and royalties. Abandoned Well-A well that is not being used either because it was a […]

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1031 Exchanges – Deferred Taxes, Anyone?

One way to defer capital gains tax on the sale of royalty or mineral interests is through a 1031 Exchange. 1031 refers to the section in the IRS code that allows mineral owners to defer capital gains taxes on the sale of their mineral or royalty rights when exchanged for another qualifying property. The 1031 […]

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Gravel sorter machinery. Mineral and royalty management with a trusted company.

Dividing family mineral and royalty estate – what you should know

Dividing up family interests is a common practice for any number of reasons, and can be considered an advantage for all parties. Separation of family oil and gas assets can arise for any number of reasons: Family members pass on and their interests need to be divided among heirs Interests were held in a family […]

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Infographic – Independent vs. In-House Landman

What’s the difference and which one is best? The answer to this question, like most things oil and gas related, is not cut and dry. Both in-house and independent Landmen are necessary resources and great partners to have when it comes to transacting and negotiating deals. In this blog, I cover the differences between the […]

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Landman, Lawyer, or Trustee?

Eeenie, Meenie, Miney, Mo…. In the U.S. it is very common to inherit minerals and royalties from one generation to the next, although they can be transacted, or bought and sold, like any other form of real estate. Those who have become mineral and royalty owners upon inheritance, or as investors new to the business, […]

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Hedging Inflation with Minerals and Royalties

Are mineral rights a good investment? Buying Mineral and Royalty Interests as a Hedge Against Inflation Many investors have started to think seriously about gobbling up any investment that could act as a hedge against inflation. It is a topic that should be on most minds, investor or not, at this juncture in time because […]

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Shhhh…Personal Advice from a Landman

Hey all! Thanks for taking the next 5–7 minutes to read this hush-hush article. I’ve provided a few tips to help you get educated on the management of your oil and gas assets, the people you may have to work with, and what to look out for.   In-House vs. Independent Landman – what’s the […]

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Venergy Momentum is a land, mineral and royalty management company specializing in helping individuals, families, family partnerships and/or trusts manage their current land, mineral and royalty interests.

We are experts in title, leasing, and the acquisition and divestiture of mineral and royalty assets and operated and non-operated working interests.

Location

3300 Bee Caves Rd Suite 650 #110,
Austin, TX 78746

A lot of factors go into this answer, however, much of the value for minerals and royalties in the Austin Chalk depend on timing and when new wells are going to be drilled and what the price per barrel of oil and price per mcf of natural gas at present time and potentially what it will be in the next 3-5 years.

The wells in the chalk are deep and expensive to drill so it has to be economic for operators to ramp up drilling in this formation.

Minerals and royalties in the Austin Chalk can be worth a lot or they can be worth significantly less and the price per net royalty acre can very greatly from one area to another.

The Covid-19 Impact on Oil and Gas Industry

The values for Austin Chalk minerals and royalties have dropped significantly due to Covid.

The mineral buying space didn’t dry up completely in 2020, although the pause button was definitely hit due to lack of demand for oil and gas, but the pumps are slowly turning back on. I regularly pass through areas of the Austin Chalk/Eagle Ford and have seen quite a few pumpjacks operational again.

Unless there are some key activities happening where your minerals are located, you should have a positive outlook as the economy and travel start ramping up again.

Those activities could include old wells being re-worked by a new operator, a fresh permit filed with the TRRC, and a previously drilled but uncompleted well or wells (DUCs) now being completed.

In other more sought after areas or plays, I’m finding that mineral and royalty buyers have gotten extremely picky and only desirous of purchasing minerals and royalties in the core areas of the play.

They have moved entirely off the fringes of the play in almost every area and in some cases have abandoned an area all together.

This is certainly the case for a lot of areas in the Austin Chalk.

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The Austin Chalk has been exploited through conventional production methods for decades and has been largely overlooked for many years due to the drive to horizontal development of the shale plays.

However, prior to Covid it was a solid performer in oil and natural gas production and had some of the most sought after minerals and royalties due to the longevity of production from this oldie but goodie.

Due to the Austin Chalk being so hit or miss right now it’s really tough to get high valuations for Austin Chalk mineral and royalty rights alone right now; the value would be significantly more should those Austin Chalk rights come with rights to the Eagle Ford as well.

But don’t give up hope if you own mineral and royalty rights in this area as we are seeing activity grow in the following counties: Karnes, Gonzales, and DeWitt, to name a few.

Whether your minerals are valuable in these areas depends greatly on their stage of development.

Do you know what stage your interests are in?

Selling a portion of your interests could be a smart move if you need to respond for any life event and after an evaluation, we can determine what your chances are of receiving bids, what those bids might be, and who might could be interested.

It’s never a bad time to see what your minerals are worth in the free market. Once you have the power in your hands, you can make intelligent and confident decisions about what to do next.

 
 

The History of the Austin Chalk

 

Austin Chalk Eagleford

Since at least the 1920’s, the Austin Chalk has been producing oil and gas in Texas from vertical wells and has often been referred to as “Swiss Cheese”.

It was given this name due to the fact that in the early days of drilling, one operator would make a gangbuster well “on one side of the street”, and another operator playing the game of “close-ology” trying to capitalize on the previous operators success would drill a well “on the other side of the street” and come up dry, nothing.

This happened over and over, and it was well known in the early days of the Austin Chalk; it made many of oil men rich and made many of them broke, and some both a couple times over.

The largest Austin Chalk oil field is the Giddings Field, located in parts of 7 counties with cumulative production of 526 million barrels of oil and 4.7 trillion cubic feet of gas.

The Austin Chalk directly overlies the prolific Eagle Ford Formation which is the primary source of most of the oil in the chalk. Oil migrates into the chalk through micro-fractures and fills the tectonic fractures and the porous matrix, the “swiss cheese”.

Widespread use of fracture stimulation in vertical Austin Chalk wells began in earnest as a response to the 1973 Middle East Oil Embargo.

Oil production increased over the next six years from 7,300 (BOPD) barrels per day to 147 (MBOPD) thousand barrels per day in 1981. Gas production increased from 7 (MMCFPD) million cubic feet/day in 1974 to 475 (MMCFPD) million cubic feet per day in 1982.

Austin Chalk production declined as oil prices declined thru the 1980’s. The next shift in technology began in 1989 with the widespread use of horizontal drilling. The Austin Chalk, however, largely ignored the application of this technology until it was more technologically advanced and really kicked off in 2013.

Finally in 2015, the Austin Chalk oil and gas production began to slowly increase after years of slow decline and now has cumulative production of 948 million barrels and 5.6 trillion cubic feet of natural gas through the end of 2016.

Initially, producers targeted the natural fracture zones in the chalk, but high initial rates of production quickly declined due to the draining of the open fracture systems.

This vintage article described the Austin Chalk as “the most perverse, contrary, incorrigible oil field known to man“.

Venergy is here to answer your questions about the state of oil and gas in this prolific area. Fill out the form below if you need some help, or schedule a time speak with us.

By the way, have you visited our FAQ page? We have tons of questions and answers covering a wide range of mineral and royalty topics and scenarios.

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