Midland Basin Mineral Rights

Most of the Midland Basin packages that land on our desk did not come from a mineral owner, they came from a grandchild of one, and that changes how we underwrite the file from the first phone call.

The Midland Basin sits on the shallower shelf of the Permian, running through Midland, Martin, Howard, Glasscock, and Reagan counties, with the Spraberry and Wolfcamp intervals carrying most of the current horizontal activity and Clearfork and Dean production layered in underneath from earlier decades of vertical drilling. It is one of the more continuously developed parts of the basin, which usually means better production data for us to work from than a lot of other plays.

But the ownership picture is often the harder half of the review. Ranch families that held these sections since before the first oil boom have passed the mineral estate down through several generations, and the desk spends real time confirming who actually holds what before we can put a serious offer in front of anyone.

The heirship problem, and why we do not treat it as a red flag

It is normal for a Midland Basin tract to show six, eight, or more names on the division order, all descending from one original grantee. We do not see that as a reason to pass, it is closer to the default condition of the basin. What we need is a probated will or a determination of heirship that ties each current owner back to that original grant with a clean paper trail.

When that documentation exists, or the owner can point us to the probate court file, we can usually move at a normal pace even with a fractional interest as small as a few hundredths of a royalty acre. When it does not exist, and the estate was never formally settled, we tell the owner upfront that title work has to happen before any purchase can close, because we are not going to buy an interest we cannot later confirm we hold clean.

Spraberry and Wolfcamp spacing, and what it tells us

Since the shift to horizontal development took hold here, operators have generally moved toward co-developing the Wolfcamp A and B benches alongside the Lower Spraberry in a single spacing unit, which means a producing tract today often sits under a program that still has additional landing zones left to drill. We check permit activity against the specific unit before quoting, because a section with three completed wells and two more permitted reads very differently than one that was fully drilled out five years ago.

Where the interval was only vertically developed, we treat that acreage more conservatively, since it usually means the operator has not yet committed capital to a horizontal program on that specific tract, and we are underwriting potential rather than an established decline curve.

What closes fast versus what does not

A producing interest with a current check stub, a matching division order, and clear heirship documentation is close to our fastest close in the entire basin. What slows things down is almost always the same handful of issues: an estate that was never probated, a name discrepancy between the deed and the division order that the operator's landman flagged years ago and nobody resolved, or a lease that is technically still held by production on a well that stopped paying but was never formally released.

None of those are dealbreakers on their own. They just mean we tell the owner honestly what has to get cleared before money moves, rather than promising a fast close and then stalling out mid-transaction.

Reading a division order against the current operator statement

A division order that was issued years ago does not automatically reflect a tract's current well count in an actively developing spacing unit, since additional wells can come online without the operator immediately reissuing paperwork to every fractional owner. We cross-check the decimal interest on the division order against the most recent operator statement before finalizing a review, because a mismatch usually just means the paperwork is behind the actual production rather than pointing to any real problem with the interest itself.