Current rates for Selling mineral rights?

We have acreage in union township and have been approached to sell all or part of our rights for about 7000 dollars an acre. This is quite a bit more than other offers we had received. Can anyone tell me if this is a good offer? Any suggestions for how to proceed would be appreciated.

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Permalink Reply by scott peterson on November 26, 2013 at 11:13am

Good solid advice but some are very legit as well. The ones I am dealing with are thru my O & G atty and will make an earnest money deposit and pay within 45 days.

Permalink Reply by Mark Allen on November 26, 2013 at 11:54am

there is a meeting tonight in Carrollton about this very thing.  Landowners get yourself educated.

Permalink Reply by SpreadsheetWizard on November 26, 2013 at 11:34am

I made a spreadsheet based on $3.50 gas over a 10-year production period, and I came up with a number north of $10,000 per acre to barely make up for the lease money plus royalties you would be giving up.  If gas stays around $4 or goes up, then $10K would not come close to making up the difference.  $7K is better than some buyers have been paying, but it is not a fair offer.  The industry can make money in the long run at $15K per acre.

Permalink Reply by scott peterson on November 26, 2013 at 11:40am

One of the big unknown factors that plagues me in this sell or not sell decision is.......if I am included in a drilling unit...how much of my acreage will be included?  All? 50% 25% who knows. That makes on heck of a big difference in guesstimating future potential royalty vs the certainty of upfront now dollars guaranteed today.

Permalink Reply by evan on November 26, 2013 at 11:57am

I'm the same way Scott , I am in a unit but they only have 48 acres of mine in the unit. And that may change for the worse if they can't get one property their waiting on. That's where im torn between selling or not.  Sure some other company might pick up my unused acres but that may be years if ever.. 

Permalink Reply by scott peterson on November 26, 2013 at 12:05pm

really hard decisions with tons of variables....making me half crazy hahaha

Permalink Reply by Joseph-Ohio on November 26, 2013 at 12:19pm
You don't read to me to be half or any fraction of crazy at all Scott.

You read more like a fella with 'laughing all the way to the bank' syndrome !
Permalink Reply by scott peterson on November 26, 2013 at 12:21pm

It is a good problem to have no doubt!!!!

Permalink Reply by arminius on November 28, 2013 at 10:41pm

Evan, although this is somewhat off topic, my family has mineral interests to the southeast of your property.  All of the permits for the McClain unit indicate all the wells to be drilled to the northwest.  Has Chesapeake any plans to drill to the southeast from the McClain pad?

Permalink Reply by Joseph-Ohio on November 26, 2013 at 11:58am
Scott,

It gets tougher every couple of minutes.

Also, how can anyone 'factor in' the absolute fact that it is and will always be a more and more 'captive market' ?

When they have it all they will charge anything they please for production.

That's pretty scary to consider.

Good luck to all of us.
Permalink Reply by Roger Pyle on December 2, 2013 at 10:54am

What decline rate do you use?

Permalink Reply by Keith Mauck (Site Publisher) on November 26, 2013 at 2:48pm

Trying to find balance between keeping this informational and not outright solicitation. Please be aware.

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