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?
Hopefully a SCHEMER who uses these kinds of tactics to steal a person's mineral ownership will lose everything he invested.
I agree. I was just so shocked and wondered if others are getting these types of "offers".
"Actual" or "supposed" or "guessed" value of minerals has been debated on these boards ad nauseam. If you search around you will find it. If I recall, that conversation got particularly heated a year or two ago before oil and gas prices dropped. Plenty of people were saying 10%, or less. Well, it probably wouldn't quite be 10% anymore now that oil prices have dropped from $100-110 a barrel to $27 a few months ago and $48 today, would it?
Yeah, a better thing to debate would be how much gas might come out of any given acre. Pinning that number down should be almost as hard as pinning down how much money you'll get per acre. If there's actual production from nearby property you could assume that your property would produce about the same, though, making it easier to guess than next year's price per MCF.
Well, unless our elected officials start cracking down on royalty theft, you may not get anything after they drill and put into production YOUR minerals. So it would be a hard decision at this point.
That is what I am gathering too, and some of the offers a couple years ago were a lot of money if you were in a "good" area.
If I owend a lot of acreage in one of those areas had one of those high offers, and had something I wanted to invest the money in, it would be very tempting. Maybe sell half. Too bad I don't have that problem.
I got $51,500 for one layer for 5 acres 4,000 ft to 100 ft below the Black Trenton river(7,000ft). Which if I had a chance I'd on said to the Black Trenton river! Because they have been exploring the Black Trenton river in Eastern Ohio. I still own surface to the 4,000 and picks back up approx 7,000 ft to the core! Was a nice payday for only having five acres! But in liquid rich area!
You may be in a permitted unit or some other status which shows you are likely to be receiving royalties sooner than most others.
I also believe the people offering know far more about the industry than the people they are contacting.
If someone is stepping up their efforts to buy your minerals you are correct to believe there is more to it than meets the eye.
I was part of some heated discussions a couple of years back due to the fact that people who sold came on the site and tried to use the buyers selling points to convince me how smart the landowners were for selling.
These talking points are easily refuted and some feelings were hurt when some of us refused to admit to their mistakes.
I contend that your initial offer will be about 10% of the expected lifetime value of your lease. I cannot prove it other than to tell you that this amount is pretty standard as a starting point anytime one entity is willing to cash you out for something that will produce a profit over time.
I would never sell my mineral rights, period. There is almost no instance where it is wise to do so.
If someone is willing to buy them from you I will promise you that they are worth more than you know, these mailers aren't just sent out willy-nilly, these things are researched as evidenced by the information your potential buyer has shown you he has researched.
I doubt there are many, if any, instances where minerals are bought in a specific formation, most likely they are bought surface to core.
We are in a downturn on the market but ask yourself when is the last time oil went down and never came back up, with a vengeance ?
Selling provides a small, temporary bump on the front end, shorter term outlook, but you are giving away the vast majority of the back end, longer term profit from your minerals.
Just be advised, these people will tell you anything to get you to sell, I doubt that there are many who look back 5 years down the road and are satisfied that they did the right thing by selling.
Again, it is highly advisable that you hold onto your mineral rights in 99.99999% of the scenarios, but, there are no hard feelings either way on my end.
well said david I almost sold to bounty mineral I told them I wanted 10,000 an acre they said they were interested in my area and that is a reasonable price they came back couple days latter and said they are interested but not for that price
and if you didnt get in a drilling package . YOU got didly.. lol