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Permalink Reply by JPN on August 9, 2013 at 1:38pm

Not sure what you are asking.  We are selling the 'rights' in the case of the property of 25 acres and all the future royalties in the case of the other property where the person owns 1/16 of 90 acres out of 500 acres.  What do you mean $75 versus the $500,000???? $500K does not make sense as a sale value.

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Permalink Reply by JPN on August 10, 2013 at 7:26am

The 90 acres was sold quite some time ago except the seller reserved 1/16 of the rights for himself. So the current owner owns 15/16's of any royalties and the other person gets 1/16.  The 90 acres were pooled with a number of other properties into a single lease that was 500 acres.  So the person gets a 1/16 of 90/500 proportion of whatever is paying that month or year in royalties.To make it more complicated, in actuality the person was left 60% of the 1/16 and his younger brother was left 40% of the 1/16th.  Hence it is only paying about $50/month.  If 100% of the 90 acres was owned by a single person  it would be paying about $1,300/mo to that sinlge person.  But someone else gets 15/16's ($1,219) leaving $81 to share between the 2 brothers, one getting about $50 and the other about $30/mo.  (hope this makes sense).

I guess I see that if the land sold for $3,000 an acre (for example)  the 25 acres should yield $75,000, for example. It is totally undeveloped with no wells around.  I do agree that $60K seems low, but $500,000 seem too high.  The 25 acres is near Clinton Township kind of at the fringes of good gas yields.

Do you have any interest ???

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