How LandGate Calculates Your Mineral Rights Value
Everybody claims that they know how to calculate the value of oil and gas mineral rights and the average price per acre for mineral rights. Google it and see how many companies claim they are the best. One company even states that it is not possible to accurately calculate the value of mineral rights. Well, at LandGate, we know it’s possible. How? Oh, let us count the ways.
First, let’s make two lists essential to calculating mineral rights value
The FIRST list is public data and other information needed to begin to know just how much your mineral rights are worth. This would be the information most companies might use to calculate the value of your mineral rights. The SECOND will be a list of additional detailed data and information LandGate uses to accurately calculate the value of mineral rights to determine exactly what they are worth.
LIST 1 – Public or Easily Accessible Information for Mineral Rights Value
- What is your net mineral interest in the tracts being evaluated?
- Are your minerals leased?
- If your minerals are leased, what is the royalty rate in your lease?
- Are you currently receiving a monthly royalty check?
- If so, how long have the well or wells been producing?
- Oil and Gas prices
LIST 2 – The LandGate LandEstimate™
- We know how far your minerals are from producing and/or planned wells
- We know how many wells operators have permitted near your minerals
- If your minerals are leased but not producing, we know if any wells have been permitted on or near your minerals
- We know which oil and gas geological formations have been permitted or produced
- We know if future wells to be drilled near or on your mineral rights will be verticals or horizontals
- We know the lateral length of future wells to be developed on or near your property (1 mile, 1.5 mile, or 2 mile horizontals)
- Based on well density in any particular oil and gas field, we will maximize the number of wells that can be drilled on your minerals, adding significant value
- We have decline curves, detailing future production volumes on nearby wells
LandGate has type curves (average well performance) for every basin and formation in the US. We update them monthly and use them to assist in projecting better forecasts for complex reservoirs - We determine production start dates for wells yet to be drilled or completed
- We calculate basin deductions for oil, gas and NGLs in order to properly calculate forecasted revenue
- We know the ratios for Gas to Oil, Gas to Water, and Water to Oil
- We know the required capital costs and monthly operating expenses incurred by the operator
- We use all of the economic data to derive accurate cash flow forecasts and market values for mineral rights all across the U.S.
…and the list goes on
Where do most of our requests for mineral rights valuation come from?
- Mineral owners who have received an offer in the mail and want to know what their mineral rights are worth. The common question is, what are my minerals worth?
- Mineral owners who received an offer on a per acre basis and want to know their mineral rights value per acre. The common question is, did I receive a fair offer for my minerals?
- Mineral buyers searching for a mineral interest calculator to determine how much they can afford to pay for minerals on a per acre basis
- Oil and gas companies looking to make an offer on another oil and gas company’s assets
- Oil and gas companies wanting to sell their interest in oil and gas wells
- Tax attorneys needing a step-up in basis for their clients who inherited mineral rights and need to know how much the mineral rights were worth at the time of inheritance
At LandGate, we take the guesswork out of understanding how much mineral rights are worth. Many companies online offer oil and gas mineral rights calculators but they don’t necessarily take into account everything that LandGate does and therefore may not be as accurate. If you want the most accurate idea of what your mineral rights are worth, you can find your parcel on our map and claim ownership of your property to see your mineral LandEstimate™.
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