Form 706 Mineral Valuation Worksheet

For estate appraisers, attorneys, and CPAs. Use Ctrl+P / Cmd+P to print or save as PDF.

For Estate Appraisers, Attorneys & CPAs

Form 706 Mineral Valuation Worksheet

Inputs an appraiser needs to value an oil & gas mineral, royalty, NPRI, or ORRI interest at date of death. Complete one worksheet per interest and retain with the Form 706 working file.

Last updated: April 26, 2026

1. Identification of the interest

One worksheet per interest. A single decedent often holds multiple distinct interests (different tracts, different operators, different interest types) — each needs its own row in the Form 706 inventory and its own valuation memorandum.

State (mineral situs)

County / parish

Legal description (abstract / survey, section–township–range, or metes and bounds)

Interest type (MI / RI / NPRI / ORRI / WI)

Decimal interest (e.g. 0.0078125)

Decedent’s name as it appears on operator records

Operator owner-relations / land-department contact

2. Lease and unit status

Whether the interest is leased and held by production drives both the income-approach inputs and the comparable-sales selection (HBP minerals trade differently than non-producing minerals).

Lease of record — lessor / lessee / effective date

Royalty fraction (e.g. 3/16, 1/4, 1/5)

Primary term and primary-term expiration date

Held by production (yes / no); name of HBP well

Pooling / unit designation (operator, unit name, recording reference)

Pugh-clause status (horizontal, vertical, both, none)

3. Producing wells — 12-month production history

The income approach to mineral valuation requires actual production data, not estimates. Pull each well from the state regulator’s most recent 12 months of monthly volumes.

Well #1 — API number / well name / status

Well #1 — 24–36 months of monthly oil (bbl) and gas (Mcf) volumes for decline-curve fit (attach)

Well #2 — API number / well name / status

Well #2 — 24–36 months of monthly oil (bbl) and gas (Mcf) volumes for decline-curve fit (attach)

Well #3 — API number / well name / status

Well #3 — 24–36 months of monthly oil (bbl) and gas (Mcf) volumes for decline-curve fit (attach)

Additional wells (attach continuation sheet)

Spud date and first-production date for each well (drives the decline-curve start)

Reported decline-curve type the operator uses internally if available (exponential / hyperbolic b-factor / Arps)

4. Realized pricing and check-stub history

Realized price is what was actually paid to the interest after gravity, basis, and (where applicable) post-production cost deductions — not the benchmark price (WTI / Henry Hub). Pull from check stubs or operator pay decks.

Realized oil price ($/bbl) — last 12 months, monthly average

Realized gas price ($/Mcf) — last 12 months, monthly average

Benchmark price at date of death — WTI ($/bbl) and Henry Hub ($/MMBtu) (EIA daily settlement)

Regional / basin differential to benchmark at date of death (Midland–Cushing, Waha–HH, Permian gas, Bakken oil, etc.)

Realized-to-benchmark reconciliation memo (basis, gravity, BTU adjustment, post-production cost deductions)

NGL pricing if separately reported

Royalty payment frequency (monthly, quarterly)

Last 24 months of check stubs (attach)

5. Date-of-death valuation framework

Document the methodology contemporaneously. IRC § 1014 step-up locks in basis at date-of-death FMV, and an examiner years later will ask how the FMV was supported.

Date of death (also alternate-valuation date if § 2032 elected)

Valuation methodology (income approach, comparable sales, or hybrid)

Comparable sales identified (basin, transaction date, $/NMA or $/NRA, source)

Appraiser engaged (name, firm, designation — e.g. AAPL, ASA, MAI)

§ 2032 alternate-valuation election analysis (attach memo)

§ 2032A special-use election analysis (rare; attach memo if considered)

6. Backup documents to retain in the file

Reconstructing a valuation under audit five years out is materially harder than capturing these documents now. Keep them with the Form 706 working file.

Operator division orders received in last 12 months

Operator pay decks / runs statements for last 24 months

Recorded lease(s), pooling order(s), and any ratifications

State regulator production reports for each producing well

Appraiser’s report and engagement letter

Comparable-sales source documentation (e.g. county deed records, public sales reports)

Form 8971 / Schedule A basis-reporting workpaper

Note on methodology. This worksheet captures the data inputs an appraiser needs; it does not perform a valuation, recommend a discount rate, or substitute for an appraisal report. Pointer Minerals does not value interests for Form 706 purposes; engage a credentialed mineral appraiser (AAPL, ASA, MAI) for that work.

Pointer Minerals is operated by Pointer Petroleum, LLC. This worksheet is general professional reference and is not legal, tax, or appraisal advice for any specific estate.