Replies to This Discussion

Permalink Reply by Jim Litwinowicz on April 12, 2012 at 2:32am

rex;  I had someone show me their postcard.  What is bad is that way too many people do not understand the difference between leasing and selling of gas and oil rights. Sadly, many people will end up selling their rights to companies like this and never see another penny.

If I had the money I would place adds in papers explaining the difference between the two options so that people can make an informed decision. There are times when people need to sell the rights but those are very limited and people should understand the full implications of doing so.

Permalink Reply by Schnoozie on April 12, 2012 at 7:45am

Jim, no one showed you their post card.

An your second paragraph has me singing...."I'd like to buy the world a Coke! and keep it company""

Come on now people sing along!!!

Permalink Reply by Schnoozie on April 12, 2012 at 8:16am

I think you are missing my point.

Permalink Reply by Schnoozie on April 13, 2012 at 2:18am

Rex, I asked the landman who signed us to explain the Marc offer.

He said it like this. Their offer is to buy out your 1/8 interest if the origianl leases were done at that percentage. So basicly they are offering to buy it for about 300.00 per acre. Range still has the other 7/8 of the 8/8.

300.00 x 131 is what you will get. The questions you have to answer for your family are: How much royalty do you see from those two wells? and how much do you think you will get in the future? Does Range have plans in the area that will involve your land? Do some research or just ask them. 

Marc is a company that buys mineral rights as an investment, holds onto them, and depending on what the market is willing to do at the time, sells them to others hopefully at an acceptable profit for themselves, partners with companies to drill on them etc.

Thats their business and their risk and what they do.

You have a few chioces at this time, it's nice to be in the drivers seat. Take their offer if you decide it's fair and put the money to good use. Or ask fo a better one and see what they say. They might bump it up and make it more attractive.  Or do nothing at this time and see how things go. It's your land, your future.

Posting "Be leery of Marc Resources" is not fair. Their offer is what it is. They are here to complete transactions and do something with the land they gather in an upfront and transparent manner. Their business is very basic. Buy-hold-sell. Buy-hold-drill. Buy-hold.

Hope this helps.

Permalink Reply by rex roae on April 13, 2012 at 2:46am

Schnoozie, their offer for $40k included my additional 51 acres that is not leased.  So for my 182 total acres, they were offering about $220 an acre.  They are going to make another offer just for the 131 acres we own that's held by production but I'm willing to bet it's going to be substantially lower.

As for Range, they have expressed an interest in leasing my additional acreage but have not giving a firm offer as of yet.  Also have been contacted by a company called Depth energy out of Texas and ADAPT but have not received offers from them at this time.

Permalink Reply by Schnoozie on April 13, 2012 at 3:00am

If the buyout figure included the 51 acres then you probably made the right choice in refusing the offer. I love the new companies in our area now. Depth, Adapt, etc. They are clever.

Sounds like you are doing your homework.

Permalink Reply by Jim Litwinowicz on April 13, 2012 at 3:32am

Rex; if the offer was for all of your OGMs and was only $300/acre, then that is a terrible offer. If they were offering just to buy the royalty stream from existing wells, then it is more reasonable but since you said "all of my OGMs" it is a terrible offer and you are correct to say to be leery of their offers.

The value of your OGMs depends on several issues. Of course location being the dominate factor. Does the lease for the shallow wells include all strata or is restricted to certain strata/depths? If all depths are HBPd then that lowers the value to the purchase as they will not get any bonus money nor can they negotiate a higher royalty.

Is the offer for all rights or just the royalty stream of the existing wells? Does it mean the right to drill more wells into defined strata?

If the offer is for all O & G rights as it seems, then the offer should be in the thousands, not the hundreds.

Permalink Reply by Sam Douglass on April 21, 2012 at 8:31am

A postcard in the mail offering money.

Imagine that!

Sounds like the buy low sell high folks