What is used to evaluate the Properties that Companies Sell?
Evaluations are determined by our Petroleum Engineer: 1. Production History – (Decline Curves and Water Rates) of the Field and/or Leases 2. Operators Reputation – Some just get it done better than others. 3. Reservoir Formation – Some Reservoirs have longer production histories than others 4. Commodity Price Risk – Gas, Oil, or both – is it sour, treated, etc. 5. Future Production and Development 6. Interest Type – Royalty, Overriding Royalty, Mineral Rights/Interest, Non-Participating Royalty Interest, or Working Interest. 7. Historical Cash Flows and Averages for: 12 months, 6 months, and 3 months. 8. Tax Rates – Tax Rates for Purchase and Severance may be too high, low, or non-existent pending your state of where the interest is located, which affects a properties value and offer rate. The information above allows us to calculate current reserves with a prediction of future reserves and cash flows. The objective is to offer fair market value while addressing risks and uncertainties
