never sell ur mineral rights wait for a lease u will b way better off
The way I see it is that I don't think we have a handle on just how lucrative the royalties will be. Most folks are tight lipped about such things. Some post here , but the numbers range widely. On the other hand , we must possess something of real value or we wouldn't be courted so much. A coworker just turned down a nice chunk (over 10k/acre). I think he made a wise decision.
Lots to consider that's for sure.As for me , I'll keep my rights and hopefully retire a little sooner , with a steady royalty income , I hope. Good Luck to you whatever you decide.
Glen, Could you tell me what county and which company offered the 10K per acre? It would be most important to know if that was for the 1/8th HBP that lots of us have, or was it for 100% (8/8ths) of the gas/oil rights.
I too am very interested in selling a portion of the physical area of my farm, just to hedge the bet a little.
Will ask him tomorrow @ work. He is in Beaver County,PA. Pretty sure It was for all his rights.
Tad, Can you explain what you mean by 8/8ths, and what HBP stands for? The offer we got was for 50% of our mineral rights. They took our total acreage and divided it by two. The per acre quote was for half of the acreage overall, but not specific to a certain land parcel.
Christiane, 8/8ths is basically 100%.
HBP is held by production - you could be on an old well and your land is held by old drilling lease.
And 50% is basically a common interest - like you said no specific - area which basically means if 5 acres of your land is put in a unit - you both have 2.5 mineral acres paid out -
And don't get all wound up on the dollars around in different counties - much of the dollars are based on well data now - wet gas dry gas - operator - how aggressive they are in drilling
If you are entertaining offers - Noble county Ohio - your in the $5000 - 6500 an acre - you might see an offer of 7000 maybe..........
And for all those thinking its worth more long term - well it could be or may not be - look at all the mineral/lease holders in dry gas PA wishing they had wet gas and thinking they had a well coming in the last year or so.
And FYI for those other reading this - UNLEASED minerals are red flags now - many buyers want leased - if your not leased they want to know why? Could be lease just expired, but if a company hasn't approached you could be many reason why, most obvious you don't own minerals etc....and if you just happen to have a lease it does not mean you own them. Few title companies only going back to the 50's and severance was in the 30's.
Ohio and Pa have different laws pertaining to minerals - dormant mineral laws being the biggest.
Thanks for explaining Mike!
I have been told by a landman at the county recorder (wanted to qualify? haha) that prior to paying bonus monies on initial leases there is a somewhat cursory ownership search completed on concerned parcels. The real homework is completed prior to placing a pad on property and declaring a unit.
Don't know if this is valid info, but it makes sense.
The initial title search is a "cursory" check, but it is still extensive and researches the title back to sovereignty. What he is talking about prior to drilling operations is the curative actions needed and identified in the "cursory" title check and Drilling Title Opinion that would compromise the operators position and must be satisfied prior to commencing operations. The last phase of the title examination is the curative items identified in the Division Order Title Opinion that must be resolved prior to the distribution of royalties.
That is correct most do a cursory - I have met and had to explain to many land owners who have received bonus from large companies that they actually don't own the minerals - even after they have been paid -
Now when a pad is about to be drilled - they typically complete a combined title of all the properties in the unit - and look for anything missing - etc...Just because it's permitted doesn't mean its going to drill - I could go on and on why they like big parcels better than small ones.....
Thank you Glenn!
Just curious what county and township your buddy is in and what percent royalty on his lease? That's less than we were offered. We're in Noble County/Enoch Township Ohio.
I agree that all of the offers rolling in must mean that they think what we have is worth something significant! We're considering selling only 50%. We do have a decent lease.
Added: Oh, I see you already answered the location question!
You're welcome. He isn't leased yet , but has some surrounding neighbors leased with Chesapeke. Good luck!