For Sale: 399.9 NRA in Reeves, Ward, & Upton - $23K/Mo royalties

Starting Bid: $3,850,000

• State : Texas
• County : reeves
• Legal Location : Various - See attached ownership summary
• Net Acres : 400
• Active Lease : Yes
• Royalty Rate : 25%
• Producing : yes
• Average Income : $23,345/Month

Comments:

Reeves, Ward, Upton, & Andrews Package – 399.9 Net Royalty Acres

This package provides a diverse mix of current cash flow, DUC wells, completed wells, rig on location, & open acreage.

This is a large, multi county mineral package with verified title and meaningful near term catalysts. The acreage is diversified across Reeves, Ward, Upton, and Andrews County, with exposure to operated units, active development, and new DUC wells.

This acreage is currently generating over $23,000/month in royalty income with production set to increase significantly as new wells come online.  There are 46.37 net royalty acres under the Big House unit, with two new DUC wells set to come online. Those wells alone position this package for strong near term cash flow growth.

In addition to the Big House DUCs, the package includes upside across multiple units, including a rig currently on location and recently completed wells in Upton that add immediate upside. While some of the Upton acreage is smaller on a net basis, it provides direct participation in active development. This is a broad footprint package with scale, depth, and multiple paths to increased revenue.

There are multiple units within this package that have significant additional drilling possible.

Title Verified Ownership

Title has been verified in all four counties.  The attached ownership summary provides a nice overview of this package.

This title review was completed at significant time and expense to the seller.  This will save the buyer significant time running title as your internal title team can review the title provided.   We are included the entire title findings including MOR’s and backup documentation on the listing.

You can bid confidently knowing there will be no major surprises at closing.   In this entire package, we only show 2.5 NRA (Shadrach 68) with any type of title concern.

Ownership Summary by County

Title has verified the following ownership by county:

Reeves County –  282.66 NRA
Ward County –       49.84 NRA
Upton County –      37.40 NRA
Andrews –                30.00 NRA
Total:                    399.9 NRA

Reeves County Ownership – 282.66 NRA

The core of this package is a significant acreage position in Reeves County, Texas.  There are multiple units within Reeves county.

Big House Unit – Reeves TX – 46.37 NRA

There are currently 4 active wells on this acreage.  In addition, there are 2 DUC wells, the Big Baby A and Big Baby B wells.  This is the largest near term upside catalyst.  in addition, there is room for additional drilling on this 46.37 NRA.

Bond Unit – Reeves TX – 40.0 NRA

There is a single well on a 646.93 acre unit providing the buyer with significant upside potential.

Harpoon Unit – Reeves TX – 20.0 NRA

There are currently two active wells on 523.7 acre spacing, providing additional upside potential for more wells.

Buffalo Trace Unit – Reeves TX – 25.0 NRA

There is a single well on 551.92 acre spacing. The Buffalo Trace well is currently inactive, but this area is surrounded by activity.  There are three DUC wells just West of this position and multiple DUC wells to the East.  There is significant upside left in this unit.

Toyah Unit – McAfee Unit – Reeves TX-  40.0 NRA

This acreage is currently showing HBP, but an argument could be made this acreage is no longer active.  The Toyah well covers the SE/4, and the McAfee the SW/4.  This acreage provides the buyer with additional upside potential as there is plenty of space for additional drilling.  There is also an opportunity to get this acreage leased again by having the operator release you from the lease.  There is a Pugh clause on this acreage.

 Shadrach 68 – Reeves TX – 4.63 NRA

The seller has 4.63 NRA here as proven by title.  However, he is only in pay on around 2.3 NRA.  The seller received additional ownership after his brother’s (Joe Armstrong) wife passed.   This is the only acreage issue that title came up with in the entire package.   We believe there is also spacing for additional wells on this acreage at some point in the future.

Non-leased / Non-Producing Acreage – 106.67 NRA

There are 53.3 NMA, or an assumed 106.67 NRA of open acreage in Reeves nearing the border of Culberson.  While this acreage is not currently leased, it is surrounded on all sides by production.  EOG operates a unit just West of this acreage called the Wapiti A Unit.  The Wapiti A 731H (4238939351), which directly borders this ownership, has generated about $35MM to $40MM in gross revenue at conservative oil and gas price estimates.

While this acreage is open, it borders strong production and will contribute significant future income to this ownership.

Ward County Ownership – 49.84 NRA

There are two different units within Ward County.  These units may have some upside remaining, but we consider these more mature units.

Brook Unit – Ward TX – 40.0 NRA

There are currently 6 wells on 648.34 acre spacing.  We believe there could be some upside in the future here, but less than in some of the other parts of this package.  This acreage does generate a good amount of income currently.

Price 46 Unit – Ward TX – 9.84 NRA

There are 5 wells on 640 acre spacing in this location.  We believe this unit is similar to the Brook unit with modest upside.

Upton County Ownership – 37.40 NRA

This package includes a very diversified mix of acreage in Upton County.  There is small 3.x NRA ownership in 11 different sections.   While small on an individual basis, this acreage is all in an excellent location.

There are 6 completed JRS Farms wells.  We believe the seller will be in pay on these wells as they come online for at least a portion of the 3.3 NRA owned in this section.

There is a rig on location in two sections.  We believe the seller has 6.76 NRA that will participate in at least a portion of this new drilling taking place.

The Upton acreage in this package adds quality production, near term upside, and additional future upside potential.

Andrews County Ownership – 30.0 NRA

The seller has 30 NRA of ownership in Andrews County, Texas that is non-leased / non-producing.   This acreage has the least amount of activity in the surrounding area.  While this is a nice acreage position, this is likely a long term hold for the buyer.

Starting Bid, Adjustments, & Timeline

The starting bid for this package is $3.85MM.  We will begin accepting bids on Tuesday, March 10th.  

For this listing, we are requiring the following:

1. 1. Special Warranty Deed
   2. 30 Day Close
   3.  No adjustments will be allowed as this is title verified ownership.  A full title report is provided.  If you have any issues with the title, please provide those with your bid. 
   4. Our closing process included in the PSA, which is:   At closing, buyer will provide the mineral deed.  The seller will execute the mineral deed and return it to Texas Royalty Brokers.  Texas Royalty Brokers will provide buyer with a scanned copy of the deed, and buyer will then wire funds to seller and Texas Royalty Brokers respectively.  Once funds are confirmed, Texas Royalty Brokers will overnight the deed to the Buyer.   
   5. Buyer must close within 14 days or sign our qualified buyer agreement.

To view/download the listing files, please visit the link below:

Download Files

We will begin accepting offers on Tuesday, March, 10th. 

All buyers are required to either do a 14 day close or sign our qualified buyer agreement once a deal has been verbally agreed upon.  In certain situations, we may require a $25,000 earnest deposit at the sole discretion of Texas Royalty Brokers.

The mineral owner has exclusively listed with Texas Royalty Brokers.  Please do not contact the mineral owner directly.  To make a bid or ask questions about this listing, please contact Texas Royalty Brokers using the contact form below.  Our team will quickly be in touch.

We have other mineral rights for sale.