buyer of mineral rights

FYO  There is a poster along roadways in NW Mercer county for "Oil and Gas" touting "best prices".  I called the number.  It is a Greggory at Keystone Mineral Funding wanting to BUY mineral rights.  The man said he estimated he would come in around $2500 per acre.  That seems a rather low price for leasing, much less selling outright. 

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Permalink Reply by Gas heir on August 21, 2013 at 11:19am

Yes the signs are all over my road. I'm glad you called and posted, I was wondering about it. That price stinks. We got an offer of $5000 an acre for mineral rights from Paragon. We still wouldn't sell for twice that though.........

Permalink Reply by Janet on August 21, 2013 at 11:20am

Sorry. Make that NE Mercer County.

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on August 21, 2013 at 2:48pm

No investor will see ROI in three years or less if there isn't any drilling on their mineral acreage.  That's why the offers come in lower.  They need to spread risk and buy without knowing what lands will be valuable within the short term.  So they set the prices much lower and go fishing.

Permalink Reply by Cindy Loy on August 21, 2013 at 12:07pm

I'd say it's low! I have a letter from last year from an outfit offering me $3000 an acre whether the land was under lease or not. I had another offering $4000 an acre, but I tossed it and can't remember the particulars.

The important points are: Many of those offers are usually for ALL mineral rights, not just the gas. And once you've sold them, you've lost all control. They can flip them. They can lease them - unless they're already under lease. They can do whatever they want and you no longer have a say on what can happen on your land.

Permalink Reply by Cindy Loy on August 21, 2013 at 1:24pm

I wonder if placing deed restrictions on your property would trump any future lease agreements made by a third party owner of the minerals? Sounds like that could get a little gnarly though.

Permalink Reply by Jim Litwinowicz on August 21, 2013 at 2:25pm

This offer is certainly too  low. Unfortunately, they will find some sellers at that price. People that are HBPd and may not get a HVHF well for many years and need the cash will be tempted. But even if you need the cash, call around, do lots of research, and get a much better offer.

Permalink Reply by Janet on August 23, 2013 at 1:25am

You are right about the abbreviations.  I don't know what Jim is saying.  And it was with amusement and slight mortification that I noted that I started the discussion with FYO instead of FYI, and that one has been around a long time!  Seriously though, I thank you all for your responses.  I, too, shall wait.

Permalink Reply by Alida Scheiderer on October 24, 2013 at 4:45am

We've been offered $8,000/acre after some haggling. I feel they are worth about $12,000 and still debating whether to accept or not.  You may like to know that the technology can now reach the Marcellus and Utica. Who's to say that in the future they will be able to reach even deeper?

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