Offers to purchase mineral rights more aggressive lately?

Has anyone noticed the offers to purchase mineral rights becoming more aggressive lately?  It used to be letters would come in the mail a couple times a month giving a name and number to call if you wanted to consider selling your minerals.  Then weekly postcards.  Now actual offer letters to purchase wanting you to sign, date and have the form notarized. I was kind of shocked when I saw this because it gives how many acres total, where they are, deed pages (how they came to you etc.), and a number they are willing to pay for your portion of the acreage.  I thought it was pretty tricky and clever on the part of the purchaser because I bet they get a lot more "hits" this way and what people may not realize is this isn't an offer to negotiate or to learn about what they are talking about but an actual sale.  Once you sign, notarize and send this thing back in that's it you get a1x check - pursuant to you owning the minerals - they get the minerals.  You, as the seller, can't go back and say no.

I would never consider selling but how much do you think mineral purchasers offer in comparison to what an owner could get out of their minerals if drilled etc.?  Do you think they offer 10%, 20% etc of what they feel the minerals will be worth?

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Permalink Reply by David Allen Lilly on June 1, 2016 at 1:16am

If someone is willing to buy your lease it is because they are really sure it has value. If you got paid an upfront bonus there is every likelihood that you will be unitized eventually.

I am not sure what you mean by "drilling package", but, there is no escaping the conclusion that if someone buys your royalties it is because they KNOW there is every chance that it will pay them back eventually.

Too many folks have too little patience with these matters, the buyers look long term and love to find folks who only think short term.

If you didn't get paid it is because there was no value, and it is unlikely that you would find a buyer for something that someone showed you as having no value.

Lastly, just because you didn't get leased today doesn't mean you wont in 5 years. These markets are cyclical and will absolutely come back up.

Hope this helps you understand the situation a little better.

Permalink Reply by LERRET on June 3, 2016 at 11:52am

Risk is relative and buyers do not always "win". And no one can say they "know" for sure what a well will do or if it has value. If they did, every geologist would be a millionaire.

Permalink Reply by Rickey L McLaughlin on June 8, 2016 at 5:41pm

Years later and no unit in my area! Don't even hear of anything but broken promises over and over, Now leases are about to be up and yes a company is interested for same lease but up front money is broken up! Good reason for that ..they don't want pay because if the market doesn't start paying off there might be lot's companies dumping everything and taking what they have made or a lose because the yo yo effect is to hard keep up with and trying to get investors. they don't want use all their monies they work hard for and saved, invested! But I say this it would be hard get over 100k plus for five acres no matter what unit or depths are drilled even if hold out for many years! and if they go deeper or shallow I'm still good in a unit! like I never even sold the layer minerals!..so who smarter now. my neighbors wish they had because they are older and never know how long until a unit is truly formed and up and running and checks start coming, which many get screwed on daily. ...lol

  only 4oo plus acres leased and need 720 and to many companies have their hands on the acreage, buying and selling and trading is a must and some won't

my lease wasn't trade but the two other neighbors beside me and in front me was go figure! And there well is said to come 2020 but doubt that happen...lies! just holding acreage to be appealing to investors.  anterio well.

Permalink Reply by Rickey L McLaughlin on June 30, 2016 at 8:40pm

Scout Minerals was company that bought one formation, The legal paper work is done and filed in the court house in Noble county. The addendum is notarized and was checked before signing, they did get me on one thing which I just caught recently but I'm sure it won't affect me since I only have 5 acres. They wasn't supposed to have the right to drill and I was more worried to make sure of the depths. and missed after they was advised and said they didn't need surface rights. I'm sure the agent had to put in to convince the investors. And I shouldn't said to 300 below the Black Trenton river because now they might explore it. I didn't know that back when signing just knew it was there. 

And I was commended by many for coming up with and getting a company pay me for selling just part, I hear they are going deeper in my area if they do happens drill which puts me back in the play again. Thanks for posting!

Permalink Reply by Rickey L McLaughlin on July 2, 2016 at 11:15am

Scout Minerals was company that bought one formation, The legal paper work is done and filed in the court house in Noble county. The addendum is notarized and was checked before signing, they did get me on one thing which I just caught recently but I'm sure it won't affect me since I only have 5 acres. They wasn't supposed to have the right to drill and I was more worried to make sure of the depths. and missed after they was advised and said they didn't need surface rights. I'm sure the agent had to put in to convince the investors. And I shouldn't said to 100 ft. below the Black Trenton river because now they might explore it. I didn't know that back when signing just knew it was there. 

And I was commended by many for coming up with and getting a company pay me for selling just part, I hear they are going deeper in my area if they do happens drill which puts me back in the play again. Thanks for posting!

Permalink Reply by Fast on May 26, 2016 at 1:37pm
I let it go to voicemail.
Permalink Reply by DONNA M SELLERS on May 31, 2016 at 6:47am

Lots of offers...they all go in the trash can.

Permalink Reply by Kirby J Decker on May 31, 2016 at 2:12pm

what do you want to happen ?

Permalink Reply by Kirby J Decker on May 31, 2016 at 2:13pm

What is it that you want to happen ?

Permalink Reply by David Allen Lilly on June 1, 2016 at 1:10am

It happens because the buyers are privy to information the rest of us don't get.  I wonder how many buyers are working in conjunction with the producers, it would be absolutely to their benefit to buy your minerals because it saves them about 90% of the lifetime payout of the lease.

Permalink Reply by Kyle Nuttall on June 3, 2016 at 8:53am

Now that would be a smart business model.

I've suspected that the buyers have inside information, either because they're friends with the landmen/managers or because they have other sources of data that I haven't found yet.

A developer starting up a holding company would be brilliant, though.  I wonder if that could be considered insider trading?  I don't know enough about SEC regulations to even guess.

Permalink Reply by john on June 1, 2016 at 9:41am
The offers have kicked up because of 1 reason. There is no work for land men. Everything is commision based in this current market. There are more land men in the mineral purchasing sector than there has ever been.

The areas of interest have not changed. Most buyers focus their purchasing around active drilling and solvent E&P's...

One can only ask themselves if they want to hold out or sell. There is no right or wrong choice. IMO

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