Oil Revenue vs Crop land - The Combine Forum
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post #1 of 4 (permalink) Old 04-14-2019, 10:18 AM Thread Starter
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Oil Revenue vs Crop land

My dad and I were debating a recent sale we heard about. Someone selling off marginal land (still croppable) with lots of oil revenue from surface lease and going and buying expensive better land in another area, probably double the price.

My dad made the argument that the 5 yrs future surface revenue is often in the price on these deals. And that maybe someday they will make the farmer clean these sites up after the company's bail. I dont know about that. I made the argument why didn't they borrow off the existing land base to move into another area and keep the guaranteed income from the wells.

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post #2 of 4 (permalink) Old 04-14-2019, 10:34 AM
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Hey Jazz, can you go here and post those free links you were talking about for sat pics?

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post #3 of 4 (permalink) Old 04-15-2019, 07:37 AM
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From what I've heard about oil lease revenue is that it can be kept anywhere from 1-50 years. Sometimes there's a choice in pay 10 years revenue up front and get lease $ right away. Oil lease revenue is not a sure thing. Many smaller companies fold and you're left with a mess to deal with and no compensation. When commodities prices fall and crops are poor farming oil wells may not be so bad.

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post #4 of 4 (permalink) Old 04-15-2019, 10:19 AM
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I would never buy a property where that the surface lease revenues would not be going to me upon purchase, whether it be cell tower, oilfield, whatever. Thatís insane. Deal with all the hassles on my land and not be compensated for it, no way.
Normally around here any lease revenue potential would be built into the price. However, more and more the oilfield disturbance is seen as a negative than a positive. It is pretty intensive development these days with the multipads, not like the old single wells and tight teardrops around the wellhead.

Last edited by New_Farmer; 04-15-2019 at 10:22 AM.
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