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Question
Hi there,

I live in CA and am looking to learn more about investing in oil/property with mineral rights in Oklahoma.  i am looking to invest with the proceeds of a recent sale of my CA property.  Can you give me any advice as to how I can begin my research? I'm looking for a small to medium, manageable investment. I have family near Oklahoma City. Thank you very much for your consideration.

Answer
My advice would be to start out with producing properties only, so that you can at least have an immediate income stream in a known producing area. Even producing properties are not always a good investment however, since wells deplete at different rates and not always be on a predictable curve. You can expect to pay between 36 and 72 times the monthly average income over the past six months for most producing properties. What part of that range you end up in depends on the seller of course, but also upon the potential of the property to produce future income from new wells, reworks of old wells etc.

Most oil and gas producing states have regulatory bodies that keep track of production from all the wells within those states as well as other oil and gas activity within their borders. Most have websites as well. Oklahoma's oil and gas database (kept by the Oklahoma Corporation Commission) can be found HERE. You don't want to buy minerals in an area where there's no activity, so using these state websites will help you determine where to concentrate your buying efforts.

Investing in oil and gas is pretty risky if you're not familiar with decline rates, formations, geology, and general market values. Without good knowledge you will certainly be able to find willing sellers, but may end up overpaying for things offered by unscrupulous sellers.


Hope this helps you out.
Frederick M. "Mick" Scott CMM, RPL
www.mineralhub.com
The Mineral Hub  

Oil/Gas

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Frederick M. Scott

Expertise

Oil and gas leasing, lease negotiations, how to best deal with the oil and gas companies or their representatives, buying/selling mineral rights, forced-pooling, correlative rights, deeds and conveyances, and "post-production" costs. I am most experienced with Oklahoma properties and laws, but am able to answer questions concerning other oil and gas producing states in many cases.

Experience

I am a Certified Professional Mineral Manager (CMM) certified by the National Association of Royalty Owners (NARO) in Tulsa, OK. I am also a Registered Professional Landman (RPL) with the American Association of Professional Landmen (AAPL). I have managed my family's oil and gas properties in Oklahoma for over 10 years and have dealt with many landmen, title analysts, attorneys and other oil and gas professionals in the process. I have written several articles which have appeared in various oil and gas industry magazines and newsletters. I have negotiated and drafted leases, prepared deeds, affidavits, and other legal instruments relating to my own minerals, as well as performed title, legal research, and curative work for same. I have acquired a good deal of knowledge on the subjects of oil and gas law, mineral appraisal, and landwork over the past ten years, and also worked as a professional landman and lease buyer for a time. I've seen the business from "both sides" and therefore feel confident I can help out most of the folks who ask questions in this forum.

Organizations
National Association of Royalty Owners (NARO); American Association of Professional Landmen (AAPL)

Publications
National Association of Royalty Owners "Action Report" (ROAR); NADOA Magazine, The Mineral Hub, Landman Magazine, and several royalty owner association group's newsletters.

Education/Credentials
Certified Mineral Manager (CMM), Registered Professional Landman (RPL)

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