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 Joseph-Ohio on November 26, 2013 at 9:24am
We've no skin in the game either Chip but things come to mind as we read here.

Selling the Gas & Oil Drilling Rights as opposed to leasing the right to develop Oil & Gas wells doesn't work for us as we hold the property as valuable beyond simply the drilling / minerals.

Wondering if these rights are sold with reservations as to surface damages, water damages, crop damages, timber damages, surface use for storage, pipeline ROWs, equipment pads, parking, staging, right of refusal, etc. ? ?

Seems to me that all would have to be spelled out ( as 'Deed Restrictions' ? ) somewhere.

Also seems to me such restrictions would affect the sell price of the rights being transferred / sold.

Just guessing here but am curious to know how that all shakes out ?
Permalink Reply by Keith Mauck (Site Publisher) on November 27, 2013 at 3:21am

I love the info too, some royalty buyers tend to think that since it's being discussed they can post their phone number and email and solicit offers.

Permalink Reply by Philip Brutz on November 26, 2013 at 8:54am

Bmo713

I leased my gas rights to Gulfport.  I choose not to sell my mineral rights.  I meant no offense.  I just want other landowners to carefully consider their options.  Once you sell there is no going back.

Permalink Reply by SpreadsheetWizard on November 26, 2013 at 10:16am

Once you sell your rights, there is no going back.  That is true enough.  You have options.  Sell only the rights to a specific shale formation if you can.  Absolutely get as much as you can from the buyer.

A single well might yield $117K or more per acre over only 10 years if gas averages just $3.50.  Most tracts will be in units with two or more wells.  Do the arithmetic.  In selling you will give up all those royalties while the gas company will realize hundreds of thousand of dollars per acre from the gas you owned.

Selling or leasing is a hard choice, so consider your circumstances carefully.  If you are relatively young, leasing could be your best bet, but if you are a senior citizen, selling might be the best option.

Whatever you do, I hope you enjoy a nice payday.

Permalink Reply by w. k. chirpas on November 26, 2013 at 10:26am

Are your spreadsheet calculations base solely on gas production?  How does oil change the figures?

Permalink Reply by SpreadsheetWizard on November 27, 2013 at 2:28pm

Yes my calculations are based only on gas.  Got the figures for the past three years or so in PA and figures the US DOE published.  I wanted to keep it simple.  If oil is in the mix, the numbers only get bigger.

Permalink Reply by Philip Brutz on November 27, 2013 at 4:12am

I would not be surprised if in my lifetime the gas companies go back and drill more laterals inbetween the current ones.

Permalink Reply by SpreadsheetWizard on November 27, 2013 at 2:48pm

I would not bet against it.  As hydrocarbons become more valuable, companies will learn how to extract more from their leaseholds.

To conclude my long discussion, if you are the sole owner of the rights to a tract, it does not make sense to sell unless you are in dire need of immediate cash.  There are situations other than dire need where it does make sense, like my own which I do not want to share here.  The information I provided was just to illustrate what is at stake.  If you can avoid it, do not sell or lease everything, and do not accept low-ball offers.  The energy sources under your ground will only become more valuable over the years.

Permalink Reply by Todd Burdette on November 26, 2013 at 10:31am
I would suggest some non refundable good faith money if you decide to sell.I assume some buyers try to get you tied up for say 90 days so they can resell them before the money is due.This happened to someone I knew when the 90 days was up....no money,so he had to start the process all over again.I would request 10000.00 when I signed a contract to weed out the shysters.
Permalink Reply by Todd Burdette on November 26, 2013 at 10:34am
Also remember Aubrey Just paid Entervest about 12000.00 an acre for there rights
0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on November 27, 2013 at 4:07am

"Also remember Aubrey Just paid Entervest about 12000.00 an acre for there rights"

Price paid to an operator is different than price paid for LOR.

Permalink Reply by Trapper on November 27, 2013 at 2:53pm

Why Marcus? Please explain this rationale.

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