OKLAHOMA CITY – St. Gregory’s University sold off a chunk of its assets and mineral rights for about $10.2 million in a recent auction as part of an ongoing liquidation.
Louis Dakil, co-owner of Dakil Auctioneers, said the holdings were substantial for a university. He was able to more than quadruple the university’s initial offer to a single bidder for a package that included 801 lots of oil and gas wells and mineral rights. Certified Mineral Manager David Sikes said nearly every university in the state owns mineral rights, albeit indirectly.
In many cases, the land was given to a university by the state and the oil and gas royalties came along with the land. A separate foundation generally manages the minerals. Most of the minerals are bequeathed from alumni.
The sale was completed on Aug. 9, according to court documents filed in St. Gregory’s Chapter 7 bankruptcy proceedings. The 801 lots had more than mineral interests in a single oil or gas well. Some lots had multiple wells in a single unit and some had mineral interests and producing wells.
There were more than 300 bidders in-house and online, from 10 different states. The lots included holdings up to 1,000 acres. Mineral rights in the STACK formation went on the high end between $30,000 and $50,000 per acre. Continental Investments LLC purchased 31 lots. Dakil said he does not divulge information on his bidders.
Dakil said the auction will benefit nearly every county across the state.
Initially, St. Gregory’s trustee received a $2.5 million bid from a single bidder. But he encouraged John Mashburn to hold out and instead pursue the auction.
“We more than quadrupled what they were originally offered from a single bid,” Dakil said.
St. Gregory’s owes more than $15.9 million to creditors across the nation, as previously reported by The Journal Record. More than 300 entities have sought money from the school.
The university closed at the end of the fall 2017 semester, citing not receiving a U.S. Department of Agriculture loan as the reason for its closure. On Dec. 22, an attorney filed Chapter 7 proceedings on behalf of the 143-year-old Catholic institution.
Sikes, Jeroco Mineral Management’s president, said though $10.2 million might be a large amount for Dakil’s firm, that’s not necessarily a staggering price tag. He said he’s seen mineral rights sell recently in Blaine County, near the heart of the STACK formation, for as much as $36,500 per acre. In Grady County, the heart of the SCOOP play and where he’s based, they are approaching $30,000 per acre.
However, high prices are relative, he said. In some parts of the country, like in neighboring Arkansas, there’s no drilling. So in places where there aren’t active rigs, per-acre mineral rights prices aren’t as high as in Oklahoma and in Texas, where drilling dominates.
Credit: By Sarah Terry-Cobo / The Journal Record