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 =)
On dry gas property, probably $10,000. On wet gas $15,000. Up front money with no royalty. Just my two cents (pun intended).
I would be happy with $4000.00 a acre on dry gas here in pa
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.
" ... 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.
I thought it was surface and all mineral rights. Not just royalties.
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.
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.
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.
"... 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?