Minerals of Oklahoma

In Oklahoma, minerals are a hot commodity. Over the years, as the state's highly publicized plays have gained popularity, the price/mineral acre has skyrocketed. Recently, EK Energy purchased 880 nma in Blaine County for $17 Million ($19,000/acre). In this article, we dive deeper into the mineral game and discover who is buying and where.

TOP 20 GRANTEES

We looked at some of the most active Grantees (buyers) across the state. The graph below reflects the number of times a Grantee appears in title. However, it does not represent the number of tracts they acquired (i.e. a Grantee who acquired 20 tracts on 1 Mineral Deed would only be tabulated as 1 in the graph below.)

Top 20 Grantee.jpg
 

Often times, companies operate in a common AOI, act as a broker, or divest their position to larger mineral groups. We examined the Top 20 Grantees (buyers), mentioned above, to see if they also appeared on the Grantor (seller) side, and produced the following chart:

Grantor - Grantee.jpg
 

As you can see, Longpoint Minerals LLC is a popular end-buyer. Other companies who mineral groups like to divest too, include, Shadow Creek, MEP, Dale Operating, Fortis Minerals, and Echo Minerals, just to name a few.

 

ACTIVE COUNTIES

So where are mineral groups buying? We grouped the counties by SCOOP (green), STACK (blue), NW STACK (orange), and ARKOMA (red). The majority of the buyers are sticking with the STACK and SCOOP, except for a few, who are almost exclusively buying in the ARKOMA. We expect the ARKOMA mineral game to heat up as more leasing and drilling activity moves into Hughes County.   

Color Map.jpg
 

Currently, the two hottest counties are Blaine and Grady. Why so much attention? The mineral game is all about timing and new well activity. Buyers want to receive royalty from the date of first production due to the large decline curves of wells in the region. Blaine and Grady have a lot of permit activity,  strong past well results, and operators active in these regions have announced publicly, their plans to drill multiple wells per section. All of these ingredients attract mineral buyers to these counties. Dewey, Custer, Canadian, and Hughes are seeing an increase in activity as buyers look to get out in front of the drill bit.

Heat Map.jpg
 

CONCLUSION

One thing you may have noticed, is that the mineral market is dominated on the end-buyer side by a handful of companies. Whenever a group looks to divest in the core regions, they often times request offers from the same few buyers. But what happens when these end-buyers slow down, or look to other states for opportunities? Unfortunately, a lot of groups may be caught holding acreage, or if they need immediate capital, they will have to divest at lower prices. As mentioned, the mineral game is all about timing; too early, and you find yourself owning acreage that has no production, and too late, mineral prices are at a premium and future divestment channels may already be saturated. It is a risky game, but if you can enter the market at the right time, you can earn large rates of return.

Convey Energy Consultants

If you are interested in other Oklahoma analysis; are active or looking to become active in Oklahoma, Contact Convey Energy to learn more about our client-focused services.


DATA SOURCES

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  • OKCountyRecords
  • Grady County Clerk (Idoc)
  • Canadian County Clerk
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