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 Bill on July 1, 2012 at 11:46am
At what phone number or email address can you be reached at ? We have 3 different properties and are looking to sell the royalties. Thanks
Permalink Reply by Who is John Galt? on June 28, 2012 at 8:47am

At a meeting in Belmont County, Ohio in 2011

an independent landman/investor from PA told a group of landowners 

the highest amount paid by an oil company to

lease an acre of land for the oil rights was $56,000 (per acre)

in Texas.

 

I have no way to verify this information, but it would be interesting to know the facts.

 

The landman also told the group that the shale oil and gas in the US is a bigger discovery than the oil fields in Saudi Arabia...

Again.!!  note that this is hear-say

because I have no way to verify his statement.

 

It is interesting that he, a potential buyer, told us

 that our land and minerals were extremely valuable.

   

In 1907 a man from PA named Throckmorton bought the rights to one vein of coal

in western Belmont County for 50 cents per acre..

Somehow, enterprises connected to Murray energy claim they own the rights to the relatively thin layer of coal. OGS reports indicate the layer of coal grows thin and is interrupted by deposits of other other less valuable minerals such as sandstone in the western part of Belmont County.

However, information suggests that the

entity which owns the rights to the #8 coal has enough power to temporarily block the large oil companies from drilling through the coal... unless of course.. the large oil companies want to pay

the entity for the right to drill through the coal..

 

Thanks to the example above, we landowners have learned a very important lesson!!

 

Owing the rights to one single layer of minerals can potentially translate into considerable power and money.

 

Consider the value of EACH layer of minerals when selling land.

 

 

Permalink Reply by Tony Rox on June 28, 2012 at 2:14pm

Great points.

All valid and true.

The one thing that I may add to this - simply to play devil's advocate here - is that leasing with depth severence clauses has a tendency to complicate leases and actually lower the signing bonuses.
As opposed to depth severence, most boiler plate leases are all now ammended to specifically state basically Oil/Gas.

I will relate a story about a lease for gas that cost a man $100,000 in coal. True story happened in Western Pa.

Goodnight All

Permalink Reply by Michael Staples on June 29, 2012 at 3:52am

Hi All, We have 76 out of 82 acres leased and in a production unit in Bradford. Assuming David's conservative royalty sell estimate of $5K per acre, can the agregate value be used for a financial statement or leveraged as loan equity?

 

 

Permalink Reply by Charley - KY on June 29, 2012 at 5:45am

I am not qualified to give you any values for the mineral rights.  Or a value for the surface land.  However there are several reasons to consider selling and good alternative investments for a normal person to make.

The risks of holding are several.  It may be several years before there is any drilling activety on the land, then some period before production begins and payments start to you.  Production results can possibly be estimated based upon other wells in the nearby area.  However, that is only an average.  You will not own the average but the royalty on the one well drilled on you.  There can be great variances in those production numbers.

Your royalty income can change because of local delivery constraints or market factors.  Well problems can have you shut in for extended periods.  And, after trying to estimate a future production volume, you are still going to only get a percentage of the future market price.  Can you really forecast that?

 

I would consider it a better strategy to harvest the current windfall available to you, after doing a fair value estimate based upon some local research.  That money can be invested in several public companies in the energy business with pretty nice risk profiles and good current income, starting immediately.  Many of these have had prices hammered as energy market prices have declined.  However, note that the lease bonus payments have declined as well.

 

A couple of companies which would somewaht be in the same business as you would be in if you held the mineral rights are DMLP, ERF and MARPS.  Then there are the pipeline companies which collect a toll for transporting the oil and gas.  Examples are EPD, MMP, and MWE.  A basket of these could be set up with a current yield in the 8% range.  That income can be expected to increase, rather than decline as your production volumes will drop.  And it would offer some market liquidity.

 

Many people wish they had your "problem."  Good luck.

Permalink Reply by Stephen W. Hodgkins on June 29, 2012 at 10:21am

Will someone do the math

Total Production X (Royalty X (Percent of Tract Acreage X Tract)/Unit)) X Price of Oil or Gas

Will give the an approx Fair Market Value.


It has been in this play about $1,000 an acre. Take anything over that price.

Permalink Reply by Who is John Galt? on June 29, 2012 at 7:14pm
Consider the situation from a different perspective...

How much would  an oil-gas company pay to have happy, wealthy landowners appearing on the news smiling and singing praises for tthe one
who paid them well and took time to listen to their concerns and respond with sensitivity

I'm sure my love and support for fracking 
will increase exponentially with the numbers on the 
contract.

Oil companies have no better friend than the satisfied landowner 
Permalink Reply by Prospector on June 30, 2012 at 9:55am

I haven't read down through all the postings, but can someone please let me know some of the so called "companies" who are offering to purchase your rights?  I use to work for one and it was such a "BS" deal.  They would purchase at what looked like great prices, but if you read the fine print it would be on a couple month option to pay you.  This meant they would have your land/rights tied up for "X" amount of months which gave them time to market your rights to gas companies for more than what they were paying you, then if they wouldn't get any takers, they would just walk away from your deal.  So, your rights were tied up while they got to see if they could make money on your gas rights.  Please be cautious.  Also, feel free to ask lots of questions and read all the fine print. 

Permalink Reply by Mike Filer on June 30, 2012 at 12:24pm

I agree, we have been trying to sell our home with 89 acres and OGM's and it is not easy. Even the bogus advertisement for mineral rights on this site is a waste of time and they are just waiting to take advantage of people. Well, we are down to $3500.00 for land, home, all ogm's, pond, timber and pole barn.

Permalink Reply by Prospector on July 1, 2012 at 3:03pm

Mike,

 

  Where is your land located at?  We are looking for a hunting camp.  Please let me know.

Thank you.

Permalink Reply by Ken Snarey on August 17, 2012 at 4:24pm

Where is your property if it is still available?

Permalink Reply by Hank on February 1, 2013 at 10:28am

Possum Hollow

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