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 deutchen on January 22, 2015 at 2:00pm

I don't understand where the "10%" figure came from. Do mineral rights buyers say, OK, this guys mineral rights are worth $100,000/acre so I'll pay him $10,000/acre. Not 20%, 50% or 70% but it's got to be 10%. That's the industry standard. I really doubt it.  

Permalink Reply by David Allen Lilly on January 23, 2015 at 1:19am

deuthchen,

10% is a rule of thumb. Some, maybe most, will not even be that generous. You said you sold your minerals already, you should know more about how this works.

The investors obtain a copy of your lease and then take a look around the area that your leased in. Don't be naïve, many times these investors are a front for the folks you leased with or they have some relationship with them that benefits both, but not you.

They know far better than Dexter Green would have you believe as to the lifetime value of your lease.

After calculating an educated guess as to the worth of your lease over its lifetime they will try to buy it from you for about 10 cents on the dollar.

That figure is fairly well regarded as the benchmark for these types of speculative purchases.

You can doubt it all you want, but it is pretty accurate.

Why does it matter so much to you now, haven't you already sold your royalties ?

Permalink Reply by David Allen Lilly on January 23, 2015 at 1:27am

Dexter Green,

Would you please come clean with us and tell us if you are somehow attached to the industry which purchases royalties from the leaseholder's ?

I have read all of your comments and I cannot attach a motive to your comments that would be otherwise.

I have no profit to be made either way as to what folks do with their royalties, if a guy sells his knowing full and well what he is doing and is happy to do so it really doesn't affect me.

However, I am still entitled to my opinion and this forum entitles and enables me to quantify that opinion, which I do in an effort to educate folks before they make what I consider to be a huge mistake based on the faulty information put out there by folks who stand to benefit from that faulty information.

So would you please come clean with us and tell us what your incentives are here ?

Permalink Reply by Dexter Green on January 23, 2015 at 5:35am

"Would you please come clean with us and tell us if you are somehow attached to the industry which purchases royalties from the leaseholder's ?"

Nope.  Financial analysis of production.  Or at least I was.  Got laid off with a few thousand others.  

"I have read all of your comments and I cannot attach a motive to your comments that would be otherwise."

It's because you're a hammer and you see everything as a nail.

"I have no profit to be made either way as to what folks do with their royalties, if a guy sells his knowing full and well what he is doing and is happy to do so it really doesn't affect me."

For someone who has no motive you seem to care an awful lot about people's personal lives.

 

Permalink Reply by David Allen Lilly on January 23, 2015 at 5:50am

Fair enough, I am sorry to hear of your layoff. I have only an emotional investment in this matter, I hate to see folks taken advantage of or lied to to get then to do something against their best interest.

My wife says I am OCD, whatever that means.

(I know what it means)

Anyhoo, I am on the people's side here, with no financial interest to serve either way.

Thanks for responding, it is obvious you are smarter than me and educated where I am not.

Permalink Reply by Dexter Green on January 23, 2015 at 6:21am

I'm here to answer the questions that are posed.  People need information and the only way they get it is when those of us who are truly informed are willing to divulge it.  I do this to tell people what is going on.  My motives are purely the dissemination of data.

Permalink Reply by Dan Warner on January 21, 2015 at 5:38am

No mercy here.

Let me get out in front of the false prophets.

While some potentially useful information eventually has surfaced, the misleading opening statement/question of this topic may have done more harm than the chihuahua-like yappings of the never-sells, combined.

Could you at least share the per-acre sale price?

Permalink Reply by Mark Duncan on January 21, 2015 at 5:13am
What a great post! I did lol! I can't imagine hedging a bet is ever a bad move! No one knows the future. All we can do is manage risk. If your happy that's all that matters. It's really no ones business and it's unfortunate when these threads turn ugly instead of providing help as they should. We will pray for you Deutchen!
Permalink Reply by deutchen on January 21, 2015 at 5:49am
Annie,
I got $15200/ acre. That was in July. I know Flatiron has shut their office in St. Clairsville since then. I'm not sure about what the status of the other 2 is at this time.
Permalink Reply by Dan Warner on January 21, 2015 at 5:57am

My apologies to anyone who feels that I have over-reached on this topic.  

This has represented, by a factor of 100, the most time I have spent on all other comment/opinion forums combined.

I wouldn't have invested this much time if I were my own agent.  My concern is for my aging mother, and I consider that purpose to be higher than avoiding an argument.

In the meantime, for the sake of others here that find themselves in a position similar to mine,  I have attempted to highlight the misrepresentations being applied to the discussion.

The important conclusion that I have arrived at is that no one, at this point in time, is going to get $20K/acre for selling,

Permalink Reply by Puzzled on January 21, 2015 at 8:23am

That is true I'mo but only because of the steep drop in the price of oil... it may come around again.....it may not 

Permalink Reply by Finnbear on January 22, 2015 at 1:26am

$20k/acre may have been possible BEFORE oil prices plummeted to less than $50/barrel in the past couple months. No way are you going get that now with $50 oil.

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