Selling % of Royalties

Has anyone sold a % of their royalties in Ohio, Guernsey County? Just wondering what the going rate was on the average acre.

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Permalink Reply by jonathan M. on July 29, 2014 at 2:58pm
Need to be more specific. The price will vary greatly depending on a number of things. County township lessee and royalty interest is a good start
Permalink Reply by evan on July 29, 2014 at 11:45pm
Lance I have been offered 12,000 an acre to buy my royalties for a 10 year term. That's a 20% lease. Best I've gotten so far
Permalink Reply by lance on July 30, 2014 at 12:14am

I don't want to sell all of my royalties just a percentage for a short term.... Thanks for the reply....

Permalink Reply by lance on July 30, 2014 at 12:12am

Ok, Jonathan. My lease is now with A.e.p at 20% royalties on 21 acres in wills township, Guernsey County.... Gateway Royalties is buying percentages of royalties not the whole mineral rights. Do you know anyone who has sold a % of there minerals. I was thinking I could sell a small percentage and still maintain the majority for a certain period of time..... 

Permalink Reply by evan on July 30, 2014 at 12:41am
If I was you Lance I would wait a little longer. Risky but your close to the Shugert wells on county home road correct. It won't be long and the results will be out on those wells. Then the prices and offers will go way up if there decent. I've seen this happen a lot in Millwood township.
Permalink Reply by Dexter Green on July 30, 2014 at 2:35am

How many buyers are out there?  If there are only one or two companies buying LOR--and I actually only know of one at the moment--then prices may not go up. 

Permalink Reply by John B Gustavson on August 6, 2014 at 12:46pm

Sorry, I never answered your question. I have identified at least twenty companies, which purchase mineral rights in Ohio and in PA. Therefore, there is a current market. They don't like small properties (less than 15-20 acres), but they do buy fractional interest such as a 50% undivided interest. Most prefer undeveloped properties (maybe drilled, but not completed). They check the current leasing in the area and typically pay 2 times the going lease bonus for the full mineral rights for already leased properties. Maybe 3 times the bonus, if the property is unleased (because they themselves may lease it out immediately and capture the bonus).  There may be a slight upwards adjustments in the purchase price, if a property was leased back when the royalty was 12.5%.

Hope this helps for starters.

John  

Permalink Reply by jonathan M. on August 6, 2014 at 1:25pm
John. He was talking about companies buying royalty only not minerals. Quite a difference and not as many buyers willing to only purchase the royalty.
Permalink Reply by John B Gustavson on August 8, 2014 at 8:35am

Agreed. I have seen one company, Bounty Minerals buy royalties, only. I have also seen them buy fractional parts of a royalty stream in Harrison County. Their address and phones are:

8851 Camp Bowie West, Suite 100
Fort Worth, TX 76116

Phone: 1.800.642.0520 Ext. #100
I don't know them personally, and I have never put them through any due diligence.

Regards,

John

Permalink Reply by evan on August 8, 2014 at 12:16pm

I've talked to Bounty ,Vine ,and Siltstone about royalties only. Oh yeah and Flatiron

Permalink Reply by John B Gustavson on August 8, 2014 at 1:44pm

What was their response? Any interest? Or non-severed Mineral Rights, only (both Executive Right and Non-Participating Royalties)?

The key point here for many landowners with shale formations (Utica, Marcellus, other) under their feet is that EARLY gifting of the Non-participating Royalties can be done at a low Fair Market Value while retaining the Executive Rights for the Grantor. If done EARLY, the royalty is transferred at very low value and will then grow over the next couple of years as the oil companies develop more and more acreage.

So the big question for the grand parents is: should they SELL some mineral rights and enjoy the money or should they GIFT some or all the mineral rights to the "little rascals" (who hopefully will grow up as responsible Americans, who will know how to put the gift to work)?

Apportionment (the appraisal of Executive Rights versus Non-Participating Royalty Interest) is one approach. 

John B. Gustavson

Certified Minerals Appraiser

Permalink Reply by Dexter Green on August 8, 2014 at 5:07pm

Bounty is gone as far as I know.  Ditto Flatiron.  Gateway is still buying royalty, and I believe Scout is buying minerals.  

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