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 Dan Warner on January 12, 2015 at 5:51am

"Our analysis indicates that industry reserves are over-stated by at least 100 percent based on detailed review of both individual well and group decline profiles for the Barnett, Fayetteville and Haynesville shale plays."

http://www.theoildrum.com/node/8212

"The problem is the Arps equation has been twisted to apply to shale technology, which didn’t exist when Arps died in 1976. John Lee, a University of Houston engineering professor and an authority on estimating reserves, said billions of barrels of untapped shale oil in the U.S. are counted by companies relying on limited drilling history and tweaks to Arps’s formula that exaggerate future production."

http://www.businessweek.com/news/2014-04-05/america-shale-oil-less-...

"EIA officials told the Los Angeles Times that previous estimates of recoverable oil in the Monterey shale reserves in California of about 15.4 billion barrels were vastly overstated. The revised estimate, they said, will slash this amount by 96% to a puny 600 million barrels of oil."

http://www.theguardian.com/environment/earth-insight/2014/may/22/tw...

"Sixty-two of 73 U.S. shale drillers reported one estimate in mandatory filings with the Securities and Exchange Commission while citing higher potential figures to the public, according to data compiled by Bloomberg. Pioneer Natural Resources (PXD) Co.’s estimate was 13 times higher. Goodrich Petroleum Corp.’s was 19 times. For Rice Energy Inc., it was almost 27-fold."

http://www.bloomberg.com/news/2014-10-09/ceos-tout-reserves-of-oil-...

http://cdn1.investingdaily.com/res/images/2014/10/141024TESreserves...

"The agency estimated that there are 482 trillion cubic feet of shale gas in the United States, down from the 2011 estimate of 827 trillion cubic feet — a drop of more than 40 percent. The report also said the Marcellus region, a rock formation under parts of New York, Ohio, Pennsylvania and West Virginia, contained 141 trillion cubic feet of gas. That represents a 66 percent drop from the 410 trillion cubic feet estimate offered in the agency’s last report."

http://www.nytimes.com/2012/01/29/us/new-data-not-so-sunny-on-us-na...

Permalink Reply by deutchen on January 11, 2015 at 2:41pm
If a person sells part of their mineral interests they may receive more money than they can use in a lifetime plus retain the right to possibly, just possibly receive several times that before they're so old all they're able to do is sit around in a lounge chair all day.
It's a gamble either way. Does a good poker player go all in on every hand or hedge their bets, keep some & bet some, in case that sure thing doesn't come through?
Permalink Reply by Philip Brutz on January 11, 2015 at 2:47pm

If you are going to sell part of your mineral rights you may want to consider having you property subdivided and then sell the minerals to one of the parcels.

Permalink Reply by evan on January 11, 2015 at 4:48pm
Great idea Philip. That would make it a little safer.
Permalink Reply by V Miller on January 17, 2015 at 1:20am
Are you saying this solves the "partition" issue?
Permalink Reply by evan on January 17, 2015 at 1:44am
Yes V miller. This would solve the Partition problem. If you have 100 acres ,survey it off to whatever amount you want to sell , mineral rights wise, then you would have two different parcels making it impossible to file a partition against you
Permalink Reply by David Allen Lilly on January 11, 2015 at 11:34pm

If a company is willing to pay you for your minerals it is only because they are quite sure of a future payoff.

So, if they are sure of their future payoff you should be sure of yours, and keep your money.

A good poker needn't go all in on every hand, especially when the future payout is coming, and he knows it.

No poker player, not even the worst player, gives his money away, which is, once again, exactly what you are doing if you sell your royalty interests.

How many words have been posted in reply to my comments without refuting that claim ?

Permalink Reply by David Allen Lilly on January 11, 2015 at 11:38pm

So, I said the mineral royalty buyers will give you pennies on the dollar, and it looks to be true.

$12,000 an acre up front, same acre pays out $200,000 over the life of the well.

What a bargain, just not for the impatient, or stupid landowner.

Not that hard to figure out fellas.

Permalink Reply by pat on January 12, 2015 at 2:53am

boy we think alike thats just about what i figured out to be true between 160k and 200k per acre. still a little to early to tell but with in the next couple of years we will see for sure.

Permalink Reply by evan on January 12, 2015 at 3:04am
Your being rough on some of the landowners there David. I know of someone who sold half their mineral rights that was in the unit where the wellhead exploded last month. They said it may be years , if they can get it going properly. Not so stupid now huh.
Permalink Reply by Finnbear on January 12, 2015 at 3:11am

That's one wellhead. Many well pads have 6 to 8.

Permalink Reply by Paul Martinelli on January 12, 2015 at 3:23am

It is very easy to figure out!

 

Eveyone has to make thier  own  decision, based on thier situation.

 

 

If I was paid 12K up front  for acres that I knew would pay 200K over the life of a well that has not yet been permitted, and that 12K/acre would allow me to live the life and dreams I worked for over the past 30 years......Why wouldn't I consider it?

 

It is a personal decision......

 

Yes..if all landowners pooled thier mineral resources into some kind of a fund.....then it wouldn't make sense to sell at the 12K number. 

 

That is my 2 cents........I didn't think giving the whole $1 version would add any more to the point.

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