This presentation is from the 2025 Annual Meeting.
Intermediate
Most mineral and leasehold transactions are negotiated with one side holding much better information than the other. This session works through seven real valuation case studies, from simple producing minerals to an ORRI on an expired lease, unleased deep rights, a working interest, and the owner who does not know what they own, and shows how each was valued and where the value actually came from.
Along the way: when a revenue multiple is a fair stand-in for PV10 and when it quietly misleads, how horizontal wells broke the older rules of thumb, how evaluators apply reserve adjustment factors and risk-adjusted discount rates by reserve category, and when a royalty interest can be treated as equivalent to the mineral interest beneath it.
Intended for land professionals, attorneys, brokers, and mineral managers who negotiate purchases and sales but do not build reserve reports themselves. Attendees leave with a defensible quick-valuation screen, the conditions under which it stops working, and the pitfalls that most often produce a bad trade.
Objectives: Apply a revenue-multiple screen to a producing mineral or royalty interest, and identify the well age, production recency, and nearby drilling conditions under which that screen is no longer reliable. Select reserve adjustment factors and risk-adjusted discount rates by reserve category (PDP, PDNP, PUD, PROB, POSS) and explain the effect of each on concluded value. Distinguish the valuation treatment of mineral, royalty, overriding royalty, and working interests, including the unit, depth, and lease-status facts that change the answer. dentify the common pitfalls that produce a mispriced transaction, including unexamined bias, unverified unit and ownership facts, and rules of thumb applied outside their conditions, and describe the diligence step that resolves each.
Speaker
Tracy Lenz
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