100 +/- Acre oil lease
75% Net Revenue Interest / 100% Working Interest
Six producing oil wells
Four 100 Barrel oil storage tanks
This lease has been in production since 1974 with a total of six equipped and pumping wells. The six producing wells currently make around 2.5 bopd together. While we have repainted everything and have the wells up and pumping we have not serviced them. As part of this purchase we would include a servicing and perform that service shortly after the closing. When this work is done we will be looking for production in the range of 4 to 5 bopd.
While production of about 4 to 5 bopd isn’t as impressive as some other leases we’ve seen, the state is expanding the main road in the area and that expansion is going to go right through this lease and will require them to buy one of these wells. The route they have chosen lines up with the strongest well of the six. In fact, this well had an IP of 10 bopd. We believe that this should result in an eventual payment of over $100K for the new owner of this lease. The downside is that it will probably be two to three years before this happens.
This is a wonderful asset that with sustained production that should produce for many years to come and with the road coming through and claiming one of the wells the new owner may end up with the remaining five wells free and clear.
With the value of six complete wells worth of equipment, the production and the road coming through this looks pretty good. Add in higher oil prices and it gets even better.
With the service work included we are asking $98,000 for the entire lease.