What are my minerals worth now in 2016

Hello,

I am new to this.  I own just under 13 acres in the Western part of Wills Township. I am considering

selling a portion of my minerals because of unforseen financial problems.  

I understand that prices are way down now, however, at this point I do not have much choice.

What would be a fair price. The property  is HBP at 12.5%..  Enervest owns the lease.

Thank You Very Much

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Permalink Reply by DMM on January 22, 2016 at 12:25pm

Thank You for responding.  At least that gives me a general idea of what to expect.

1xc6tw2xj1fwlPermalink Reply by 1xc6tw2xj1fwl on January 22, 2016 at 3:37pm

I assume you're in Guernsey County.  With a 12.5% Enervest lease you are probably looking at 2-3k/acre

Permalink Reply by Barry D on January 22, 2016 at 4:02pm

DMM,

Which County,  Which State ?

Matthew may be correct.

Permalink Reply by DMM on January 22, 2016 at 5:01pm

Yes, I am in Guernsey County , Ohio.

My understanding is that only about a year and a half ago, the prices on minerals

was substantially higher. 

I have heard that the 12.5% lease plus the fact that I am in Western as opposed to

Eastern Wills Township is what is most likely to lower the price.

Permalink Reply by Barry D on January 23, 2016 at 2:08am

DMM,

Many things have changed from a year and a half ago.

Both the lease bonus payment and per acre mineral purchace price are down. Of course location is a prime factor. Companies are honing the areas they believe will be most productive. If your property is not in an area of interest prices will be lower.

Lease terms is also a factor.

To me, the primary factor for low prices is the low price of oil and gas. People who purchase mineral rights are concerned about their "ROI" return on investment. The higher the cost to purchase coupled with low oil and gas prices lengthens the time of the ROI. The investors cannot control the price of oil and gas. But they do have control on how much they will pay for oil and gas rights. Thus the low offering prices for those rights at this time.

So landowners wishing to capitalize on their oil and gas rights have to decide if they sell now or wait for higher prices. Tough decision, since it does not appear that prices will rebound any time soon.

0ym9x5ag7ury2Permalink Reply by 0ym9x5ag7ury2 on January 23, 2016 at 7:15am

Don't forget to call the Jeff Rokisky law firm in WV (licensed in PA, OH, & WV) and find out if he is still selling minerals using the auction method. 3 years back they advertised that they would calculate the value of your minerals then offer them at auction to 25 or more companies.

Jeff takes a percentage (6% from my memory) which keeps him interested in making the most money for the landowner and therefore for his company.

I would think that he would sell a portion of your minerals for you using this method.

If I were to sell my minerals out of necessity, I think Jeff's method would net me the most money.

Those private deals you hear about could stick you with a low ball offer when you could have done much better based on the wells in your area, as Jeff said he would look at to estimate your minerals value.

Look Jeff Rokisky up on the internet. I don't get kickbacks for my advice by the way. When I get an HONEST royalty for what is being taken from our well, that will be fine with me. Why Be Greedy.

Permalink Reply by DMM on January 23, 2016 at 7:41am

Thank you all for your input and sharing your knowledge and experience.

Permalink Reply by Keith Mauck (Site Publisher) on January 27, 2016 at 3:21am

DMM, make sure you find your well at https://www.shalecast.com

Permalink Reply by David Allen Lilly on January 28, 2016 at 12:34pm

DMM,

I cannot speak to your personal situation and I am sorry for whatever predicament you find yourself in.

I can tell you this much, whatever you are offered to buy your mineral rights will be about 10 cents on the dollar to start, topping out at maybe 25 cents on the dollar, of whatever the buyer deems the lifetime payout of your lease is.

This is the absolute worst time to sell, your mineral rights will probably never be worth less than they are now. Nothing is certain but I think I can see the sun rising on rising oil prices, still off in the distance, but coming.

I hope you can find some other way, and I wish you luck. All apologies for intruding, I am certain you wanted a dollar amount offer.

Permalink Reply by LERRET on January 29, 2016 at 8:13am

You can call "Ted"

Werner (Ted) Kostendt has been a commercial real estate analyst and valuation specialist.  He moderated an Appraisal Institute seminar on mineral problems where I was one of the presenters.

He is a certified general appraiser and MAI.  Out of Cleveland.

As for the value, if producing, it is normally valued as a rule of thumb by the sum of the last 3 years production.  Otherwise, a consistent estimate of reserves and your portion valued "in ground" is the most accurate way.  And the typical way is to take the risk adjusted reserves and multiple times the current price of the product divided by three (In other words, future gas in the ground is worth about 1/3rd its current market value)

Permalink Reply by Tom Brian on February 2, 2016 at 12:24pm

Have known of a temporary. hardship case sell 50% and keep 50% if that will get you by . called hedge your bet.  A way  to get cash and still be in the  "Game" .  Good Luck................

Permalink Reply by DMM on February 2, 2016 at 12:26pm

Thank You all.

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