How we value your minerals

Your minerals are worth what they will pay you in the years ahead. We start with the checks you already get, work out how those wells are likely to do, and add it up. Here are the steps.

1. We find your wells

Your statement lists the wells you are paid from. We look each one up in public records that the states publish. For a well to count as yours, three things have to line up:

• The name on your statement matches the state's name for the well.
• The county is the same.
• The amount of oil and gas your statement shows for a month matches what the state shows for that well and month, once your share is accounted for.

If we cannot make all three line up, we say so rather than guess.

2. We look at how they are doing

Once we have your wells, we pull up how much each one has produced, month by month, since it started.

3. We expect your checks to shrink, and that is normal

A new well produces the most in its first few months, then slows down quickly before settling into a long, gentle decline. A check that is smaller than it was last year is usually the well doing what wells do, not a sign of a mistake. We use the shape of your own wells' history, and wells like them, to estimate how much each will produce in the years ahead.

4. We turn that into checks, using today's prices

For each future month we multiply the expected oil and gas by today's prices, and by your share of the well. We then take out the costs and taxes the way they come out of your checks now. The result is a list of checks you can expect, month by month.

5. Money later is worth less than money now

A dollar you will get in ten years is worth less to you than a dollar today. So we count each future check for a little less the further away it is, then add them all up. That total is the value of your share "today." It is the answer to "what would it be worth to have all of those checks in hand now?"

6. We give you a range, not a single number

Nobody knows what oil will sell for, or exactly how a well will decline. So the report shows our best estimate and a range around it. If prices rise or a well does better than expected, the value goes up; if not, it goes down.

What the numbers cover

• States: Texas, New Mexico, Colorado, Utah, North Dakota, Wyoming and Oklahoma.
• Production records: available for every one of those states except Oklahoma. For Oklahoma wells we can find the well but do not yet have its production.
• Texas: the state reports oil and gas by lease, not by individual well, so Texas well volumes are allocated from the lease reports. They are good estimates, not exact figures.

What this is not

It is an estimate to help you understand what you own. It is not an offer to buy, an appraisal, or legal, tax or investment advice. A buyer may offer more or less. If you are thinking about selling, get more than one opinion. [BG: confirm "get more than one opinion" is your line]

To see how it looks for real wells, try the sample valuation, or read how to read your statement.