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Oil/Gas - Oil/Gas Rights
Expert: Alan H. Coogan - 11/10/2009
Question
Hello,
I was considering purchasing a property with gas/oil rights, the seller showed proof of about 11k a year royalties for each of the last three years. My concern is I am not sure how to get a sense of how much oil/gas is left? I know it's not a perfect science but would you have steps/recommendations to figure out? He states even when goes dry (sometimes 30 years) you can still get free gas allot of times? Should I include an mineral attorney as well in addition to my real estate agent? It located in Mercer County Pa...thank you sir for your time..Matt
Answer
Dear Matt:
Yes, there are ways to do it, but it requires much more info than you are reciting, plus some technical expertise.
In Mercer Pa, wells usually produce from the Medina or Whirlpool. If that is the case (find out,
the reservoir sands are "tight", required "fraccing" and decline rates are rapid.
Typically, half of the production of a 20-30 year well comes in the first 5 years.
If the wells are something else, e.g. Oriskany or Lockport, find that out too.
A real property attorney should be able to do the job unless you have a complicated
land history or demanding seller.
Good luck with your home work,
AHC
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