High offers to buy minerals

I have been hearing of companys offering $12000, $13000 even $15000/ acre to buy mineral rights. So far I haven't been able to find out who is making these offers. If you've received an offer in this range could you please tell me who made it? Thanks.

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Permalink Reply by David Allen Lilly on January 20, 2015 at 12:16am

Also, keep this in mind:

This summer past we were enticed (not really) to allow a company access to our property so they could drill holes into the ground and detonate explosives which would give them some knew insight into rock formations of some interest to the industry.

Generous offer.......$5 an acre.

We refused, obviously, but our refusals were ignored until the day two folks came to the house wanting to negotiate access to our property, asking if there was an offer that would have us change our minds.

Starting at $5 an acre, prolly not.

The nice lady then asked of our leasing status before she proceeded to try to tempt us by telling us how it would help us get drilled, which I found interesting, only because the drilling was fast and furious around here already.

Which lead me to my next question for her, "What else is down there that you are looking for" ?

That turned out to be all I had to say, I have not heard from them since.

So, a cautionary note, I strongly suspect that there are additional formations below the Utica that are of interest to the industry, the technology will eventually catch up to producing them, and that will mean another revenue stream.

If you haven't sold your mineral royalties surface to core.

Permalink Reply by Dan Warner on January 20, 2015 at 3:07am

Thank you, Mr. Santiago.

Based on Mr. deutchen's initial posting, hard numbers are the only thing that are appropriate here.

Your post is very helpful.  It illuminates well, the wide variability not expressed in the E&R projections published for the consumption of their investors.

  

Permalink Reply by Werner Kostendt on January 20, 2015 at 3:23am

Thank you.  Was that $9,000 per acre offer  or  was that $9,000 total?  $1,714.28 per acre?   Was that a recent offer?  What township? county?   Thanks. 

Permalink Reply by Puzzled on January 20, 2015 at 4:07am

An offer of 18000 per unleased mineral acre to purchase was made by bounty minerals  for land in Jackson township Monroe County Ohio  in December 2014 

Permalink Reply by Puzzled on January 20, 2015 at 5:54am

I will tell you what......you secure a 20 percent true gross lease with no enhancement clause for this acreage and I will pay you 5000 dollars.......I am not too worried about having to pay up but if you actually could get such a lease done it would be worth it......some on this thread keep using the 20 percent number...let's see how easy it is to get it......... BTW.  I did not take the offer......

Permalink Reply by Puzzled on January 20, 2015 at 8:40am

Neither.   My parents owned the land till 2014.  They wanted no part of drilling leasing selling etc.......after my mother passed  ,my father moved and signed the land to his children......you should not assume negative  things about other people. Until you know them well

Permalink Reply by Puzzled on January 20, 2015 at 8:44am

But if there really is 200k per acre to be had one would think someone would be eager to lease my little parcel.  

Permalink Reply by Dan Warner on January 20, 2015 at 10:33am

In my opinion, based on the level of ridicule and the industry vernacular used by Mr. Ed, it is increasingly clear that he is a leasing agent.

His vile reaction to my query regarding his relationship to the industry, rather than simply qualifying himself as he demands others do, would seem to bely a wish to conceal, and assurances of a concrete payback based on inconcrete factors are standard operating procedure for a broker.

His use of the term "day rate landman", further suggests to me that he is not only a landman, but either an independent or a commission-based landman.

It is also curious that, upon my disengaging from our unpleasant exchanges, all of his posts related to our conversation seem to have been deleted.

 

Permalink Reply by David Allen Lilly on January 21, 2015 at 1:09am

Puzzled, you are too hung up on the $200,000 an acre part.\

Whatever is to be realized from production of the well as it pertains to your lease you will be offered about 10% of that figure to sell your royalties.

That is key, the 10% part, 10% of your money from your lease on your land.

Permalink Reply by Puzzled on January 20, 2015 at 12:06pm

all I can tell you is that the offer was made in December 2014

Permalink Reply by Werner Kostendt on January 20, 2015 at 7:47pm

It's interesting that the price of natural gas has not dropped hardly at all, at least compared to a price of a barrel of oil.  Natural gas is not a useful byproduct of drilling for oil in the Bakken because there is no infrastructure to take it away.  It's just flared off.  So it was never a factor on the supply side of natural gas.  The Utica was always more of a wet gas play than an oil play or even dry gas. 

A former CEO of a big oil refinery company said he thought gasoline would be up to $5 per gallon by 2016.  And that worldwide oversupply is not so far ahead of demand, that it justifies the large drop in oil.

I think the drop in crude oil may be short lived.  Also once Cheniere gets their LNG export station going there could be a lot more demand for natural gas. 

Permalink Reply by Puzzled on January 20, 2015 at 11:42pm

I read that too.......I also read that the drop in oil is here to stay due to a global slowdown..........Deflation will set in  economies will collapse.......dogs and cats will live together etc........if the insiders and experts don't agree what will happen it is anyone's guess.......

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