Would You Sell Your Land & Minerals? And If So How Much Would You Take?

My husband and I were approached by an invester to sell our land with the OGM rights. We are thinking about selling our land that is located in the WET UTICA region and has great geology. We would like to get the opionion of other land owners out there. If you were approached would you sell? And if you would sell what would the price per acre be?  Half of our acerage is leased and the other hald on a seperate parcel is not leased. It seems like if we do the math of the royalties over 30 years there is allot of money coming in. So do we sell? And If so what do we ask per acre? Thank You & God Bless =)

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Permalink Reply by David Perotto on June 9, 2012 at 12:29am

Hi Patricia,

On dry gas property, probably $10,000. On wet gas $15,000. Up front money with no royalty. Just my two cents (pun intended).

Permalink Reply by Mike Filer on June 9, 2012 at 10:05am

I would be happy with $4000.00 a acre on dry gas here in pa

Permalink Reply by Denver Gallentine on June 26, 2012 at 6:35pm
Hi-
We have also been approached to sell mineral rights on some of our land. It is 25 acres in Marshall Co., WV. In Dec. 2011, we were offered $2500 per acre, but turned it down. Last wek another company offered $3000 per acre. From reading this site I assume thse were both low offers. It's tempting ("Bird in the hand..."), but then we think of what it might bring us later. Denver
Permalink Reply by Tim Tarr on June 9, 2012 at 2:44pm

I wouldn't sell for 50k. After you sell where do you put the money? T bills are losing about 2% a year after inflation 

that's using govt numbers. I think it's more like 5%+.

After you sell that's all you'll get. If they find another Pay Zone Buyer will get that pay day!

Now if you are 70+ and want to move to Florida that's a different story.

Permalink Reply by Utica Shale on June 9, 2012 at 4:03pm

" ... I wouldn't sell for 50k ..."

 

 I would sell my Royalties for $50,000 per acre.

 But, I doubt that you will find any company willing to pay you $50K per acre.

Permalink Reply by Tim Tarr on June 9, 2012 at 4:44pm

I thought it was surface and all mineral rights. Not just royalties.

Permalink Reply by Utica Shale on June 11, 2012 at 8:54am

Tim,

 The local price for the surface acreage varies tremendously from location to location. I purposely decided to not estimate the Surface Price. The Surface price would need to be added to the Minerals price. Besides, a local realtor could easily provide Patricia with a very accurate quote for the surface acreage. I cannot. Given that Patricia "did the math for royalties over 30 years" she has a real good idea of what the maximum amount the minerals are worth to an investor (or anybody). Divide the (Surface Price + Signing Bonus + Estimated Royalties) by the total acreage and you have the absolute maximun amount per acre that anyone would pay you. Obviously, the investor is going offer a very low bid to maximize his profit.

 

   I had an "investor" call me. He offered to purchase the OG Rights of my already leased (but undrilled) "wet gas" land and he only offered me $5,000 per acre. Way too low for sure. And he would not negotiate 1 penny higher!

 And there is no guarantee that just because you have a lease that your land will ever be drilled. 20% Gross Royalties of nothing is still nothing.  Just something else for landowners to consider.

 

Permalink Reply by Kathleen on June 9, 2012 at 4:56pm
If a fair offer was given and the person selling makes a decent living they would avoid the almost 40% loss of royalties to taxes. From this stand point alone I see an up side to selling.
Permalink Reply by Patricia Patterson on June 9, 2012 at 5:00pm

we have had the same though that you just had. Why lose 40%+ 0f the royalties to taxs. And the price we are looking for an opinion on is selling both top land and mineral land together. I havent seen $50,000 per acre yet but we have seen $25,000-$30,000 per acre pricing.

Permalink Reply by Jack Straw on June 9, 2012 at 5:15pm

And you have doubtless noted that the "Long Term Capital Gains Tax" rate could potentially double from 15% to 30% next January - depending upon politics.

http://online.wsj.com/article/SB10001424052702303753904577452674278...

 

JS

Permalink Reply by JR on June 9, 2012 at 7:19pm
Patricia, did they want your leased or unleased acreage?  We are leased but appear to be in theliquids rich/oil window--prime location. We also would sell. I'd sell the whole thing for $25-$30k per acre. Unleased you would think could be a bit more...$35k? I figure years of royalties, additional formations below. It is valuable.
Permalink Reply by Utica Shale on June 9, 2012 at 11:07pm

Patricia,

"...  It seems like if we do the math of the royalties over 30 years ..."

 

 Does a Wet Utica Well really last for 30 years?

 How did you account for reduced production over time?

 

 How much money per acre did you calculate your acreage would generate?

 

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