In this analysis, we reviewed public mineral deed records from 68 counties. The charts and maps featured below are generated using, Convey640. As a subscriber, you also have the ability to conduct detailed analyses using Convey640. Please note that this article is for informational purposes only and should not be taken as investment advice.
INTRO
Hello, 2023! The energy industry had a pretty good year in 2022, with stocks performing well, and based on my LinkedIn feed, steady job postings in the industry.
Oil and gas prices have been volatile, with warmer temperatures and weaker economic news driving prices down. Despite this, commodities are expected to be the best-performing asset class in 2022, with S&P GSCI TR returns of about 23%.
Oil Price
Gas Price
I try not to get too caught up in price predictions or activity outlooks. 2022 taught me that you never know how things will play out, you just have to put your best foot forward each day and enjoy the ride!
Are you ready to dive in and see who was buying minerals, how much they were spending, and where they were buying in 2022?
WHO (GRANTEE)
The Top 10 Grantee chart is based on the number of tracts acquired, not mineral acres.
- We removed grantees that appeared to be family transactions in order for this analysis to be company related.
- Also, we aliased Diversfied Production LLC|OCM Denali Holdings LLC. Diversified had numerous transactions, from many different Diversified related entities. Many of these transactions may have been overriding royalty related, however, since we didn’t have time to physically examine all transactions we left them as the leader.
- Side note, Courthouses are not consistent in their instrument classification, they may label a conveyance as a mineral deed or some other name, making it difficult at times to properly alias. In the conveyance portion of Convey640, we alias all instruments as ASSN, MD, or OGL. But we also display the original courthouse instrument title to insure users can see all of the input data and can filter to how they see fit.
- Side note, Courthouses are not consistent in their instrument classification, they may label a conveyance as a mineral deed or some other name, making it difficult at times to properly alias. In the conveyance portion of Convey640, we alias all instruments as ASSN, MD, or OGL. But we also display the original courthouse instrument title to insure users can see all of the input data and can filter to how they see fit.
- As we have mentioned in the past, the number of tracts acquired throughout the year is not the best indicator of who is spending the most capital.
- A 0.25 net mineral acre tract is counted with the same weight as a 250 net mineral acre tract. Therefore, we examined the total consideration below to get a better idea of who is actively spending in Oklahoma.
What is interesting about the Grantee chart this year, is that 5 of the top 10 Grantees based on the count, also appear in our consideration leader table.
WHO (GRANTOR)
Now that we have examined the number of grantees, let’s examine the number of grantors. Within Convey640, you can view the grantors associated with each grantee and gain a clear understanding of the buying, selling, and brokering activities occurring.
HOW MUCH & WHEN
As stated above, we believe that the total amount of consideration recorded is the best, publicly available indicator of who is actively investing in minerals.
- Consideration is based on the Doc Stamp Recorded (75 Cents Per $500).
Total Consideration across the counties examined was over $700 Million
- The table below shows the top grantees % of the total
Top Ten Grantees, based on consideration, spent over $500 Million.
- There were some large transactions in 2022, including Cobblestone Minerals LP acquiring assets owned by LongPoint Minerals and Land Run Minerals V picking up assets owned by Rumble Minerals, Fortis Sooner Trend Minerals, FMII STM, LLC, and Phenom Minerals, LLC.
- Eckard appeared to have pieced their acquisitions together via individual sellers and strategic mineral partners, as well as buying some companies that were on the market.
- Eckard Land & Eckard Anadarko were both listed in the top 10 so we combined their portions, and that is the reason only 9 entities are shown in the above table.
The spike in December 2022 spending was related to the Cobblestone Minerals LP acquisition. The June hump was related to Eckard Anadarko Holdings acquisition from Brigham Minerals.
- Speaking of Brigham Minerals, Sitio Royalties Corp and Brigham Minerals, Inc. recently announced the successful completion of their merger, combining as Sitio Royalties Corp.
The number of tracts acquired throughout the year further shows that a high tract count does not necessarily mean a high consideration amount.
- The large count in January is from the Diversified transaction that we have noted above.
WHERE
The majority of mineral activity occurred in the Anadarko Basin and Arkoma Basin
- This chart is based on the number of tracts recorded.
If we filter to the TOP 10 CONSIDERATION GRANTEES and draw their tracts on a map we can see that a majority of the capital was spent in the SCOOP and STACK regions.
If you filter our OCC Application module to “Poolings for the previous year,” you’ll see that the poolings are primarily located in and around the areas targeted by the top consideration grantees.
- This indicates that the top consideration grantees are likely narrowing their buy areas to regulatory active sections, which makes sense if they’re trying to capture the first production from new wells.
CLOSING
Comparing last year’s Minerals of Oklahoma 2021 with this year, showed that companies invested significantly more capital in 2022. This is good news for the state and suggests that commodity prices are favorable and that strong returns on investment are likely based on strong well results and future drilling activity.
It’s worth noting that Eckard has continued to perform well in Oklahoma, and L3 Resources and BCF Minerals (through various entities) have consistently invested in Oklahoma’s mineral sector. It’s also encouraging to see the return of Land Run Minerals V.
The SCOOP and STACK regions have been heavily targeted by mineral buyers in the past, and one would assume that it may be becoming more difficult to purchase minerals from individual owners in those areas. If you are looking to acquire a large amount of acreage there, you may need to purchase it from another company. However, this could also lead to a more efficient and streamlined deal flow within the SCOOP and STACK.
If you are a mineral or non-op company that is not yet a subscriber to Convey640, I highly recommend giving us a call to learn how you can use our data, platform, and alerts in your daily operations. Just look at the recent review we got from a user on Twitter! 🙂
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