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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0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on December 2, 2013 at 6:22pm

Price paid to an operator is for a much higher NRI, somewhere between 75-80% whereas LOR is 12.5-20% depending on the lease.  Let's assume Aubrey bought on a 75% NRI (I don't know the actual number).  That's $160/acre per percentage of interest.  So for a landowner with a 12.5% royalty that's $2,000/acre.  It's not an apples to apples comparison.

Permalink Reply by Mark Allen on November 27, 2013 at 4:03am

hire the best consultant and legal team u can find, allow them to utilize their teams to get u the best language and deal possible.  Recently a neighbor, was offered $7000 on his 18%gross lease, the buyer said that is what we are paying, in fact gave him two other landowners to call to confirm the price per acre.  The price was correct, however the two other leases were 12.5%net royalty leases HBP.

  The neighbor joined with local firm and was able to get $9000 per acre, on 50% of his leasehold and a favored nations clause to boot.  The money is on a 30 day closing, with earnest money already down[non-refundable] they also set up a 1031 Land exchange which will allow him to purchase 100% rights to his timeshare at Nags Head, tax free!   

Permalink Reply by Charles Randolph on November 27, 2013 at 4:37am

These are the types of business negotiations I like to see :))))  I love the tax-free 1031 exchanges and hope we will see LOTS more of these to bring the sellers more stylish vacation properties and other assets like they deserve !!  Just SUPER !!!!

Permalink Reply by scott peterson on November 27, 2013 at 4:39am

The 1031 doesnt necessarily need to be in land either. Can be in an investment fund also like a REIT.

Permalink Reply by Dennis J on December 2, 2013 at 9:58am

Can you explain this in a little more detail?  Are you talking about a sale of minerals or leasing.

Permalink Reply by Dan Stewart on November 26, 2013 at 2:31pm

I'm my opinion, it mat be worth over $100000 for the life of the well. Not a good idea to sell unless you are in  a tight situation or your are old and realize you may not live long enough to enjoy it.

If you don't need the doe hang on. Chance is there is a pot of gold at the end of your rainbow.

Permalink Reply by maag man on December 2, 2013 at 7:26am

there are many offers and many of those brokers need to then sell to an end user..  I represent an end user if you want a real offer.. paid usually in less than 30 days.. feel free to friend and or contact.

just paid a land owner in 7 days.  also if you are hbp.. held by production I can assist

Permalink Reply by Dennis J on December 2, 2013 at 10:06am

Are you talking leasing or buying, I am getting buying offers but I would be more interested in leasing.

Permalink Reply by maag man on December 2, 2013 at 7:29am

be aware..  as you get a chance to discuss your assets with others in the united states... the crave for minerals goes just as fast as the leases came and went...  there is only so much money to go around... guy from Louisiana told me that his family farm of over 600 acres was up to 11k an acre. they waited... . now they cant get 100 bucks an acre..  happened in less than a year.... 

Permalink Reply by mark ondrusek on December 2, 2013 at 7:58am

good advice!  we helped a lot of people in beaver county get 3k an acre and lot of people waited.  I get calls every week from them now wanting to sell and nobody will even look at them!

 

Permalink Reply by Dennis J on December 2, 2013 at 10:12am

I for one am not always aware of what is going on in my area because I don't live there on a daily basis.  It seems there are not as many leasing agreement s floating around right now. I suppose if someone becomes interested in my land they will start up again next year. I did find out the neighbor below me leased to someone. His lease was already sold off.

Permalink Reply by Jim Brannon on December 2, 2013 at 10:52am

DON'T SELL!!  BE PATIENT, YOU WILL BE RICHLY REWARDED.

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