Should I sell oil and gas rights in Wetzel County now or wait for prices to increase?
Posted by admin at October 3rd, 2015
Oil has been produced in West Virginia since before the Civil War and in the early 1900’s West Virginia was the largest gas producer in the country so West Virginians certainly aren’t new to the oil and gas industry. But it’s important to point out that the demand for oil and gas, like any commodity, has always been cyclical and drilling activity in West Virginia has experienced extreme fluctuations over the last century and a half. Which is leaving many oil and gas rights owners, to wonder if they should sell oil and gas rights in Wetzel County now or wait for oil and gas prices to increase.
In Wetzel County, natural gas production has been strong for several years and the 63.7 billion cubic feet of gas extracted from that county in 2012 grew to 165 billion cubic feet in 2014. Volume is expected to level off with the price for a 1,000 cubic feet unit of natural gas now around half of what it was in March 2014. It’s simply an issue of supply and demand and right now, there is an oversupply, particularly in the Appalachian Basin.
And when it comes to oil, most experts agree that the recent drop in oil prices will not be short lived. There are lots of reasons why oil prices have dropped like they have but the primary factor is that worldwide production is now exceeding demand by over 2,000,000 barrels of oil per day and, like any commodity, this glut is driving the price down. And, even with low oil prices, production is not expected to slow anytime soon with no large surges in demand on the horizon. Energy efficiency and the increase in renewable energy such as wind, solar and battery power is definitely having an impact on the demand for fossil fuels.
So should you sell oil and gas rights in Wetzel County when prices are low? Well it all depends upon your situation and how important a lump sum payment could be to you and your family. You might have been able to sell your rights at an earlier time at a much higher price, but if there are simply too many questions about the future value of this highly volatile asset it might be time to consider selling at a lower price and investing that money in safer investments you can control.
Apache Land and Royalty would welcome the opportunity to discuss current market trends and future demand for oil and gas in Wetzel County with you, so please give us a call at 888.428.4811.