Selling Your Minerals??? This is an option to buy aggreement to look at.

Mason%2C%20Brandon%20120_Business_Day_Open_Road_Option%20%28Magnoli...This topic has been coming up a lot lately,  So if anyone has questions about how the process works, Here is the first thing you will fill out.  It is called an option to buy agreement which essentially locks your property in while it gives the buyer time to research it. Most options to buy will look like this,   Attorney friends, I would invite you all to read over this, pretty short, and offer ideas/suggestions on whether this may or not need changed for the landowners protection.  Attached is a PDF  of the form for everyone's review please off up suggestions as a lot of people have considered selling recently.

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Permalink Reply by Joseph-Ohio on March 31, 2015 at 9:25pm
Yeah there's that.

And they're not yet herding us onto railroad cars for long rides / relocation.
Permalink Reply by Adam Martin on April 1, 2015 at 2:15am
Joseph-Ohio, I completely agree with you regarding the government and industry stepping in to say how your minerals should be managed. The state of WV is stepping in because the more drilling that happens within it's borders, the more taxes they collect. The Industry has jumped onto the states need for taxes, trying to impose regulatation that gives them access to any mineral they deem necessary, and by the way, they will compensate you based on some cooked up numbers that will devalue the worth of your mineral.

There is no doubt in my mind that the Industry was not heartbroken about Forced Pooling in WV not passing because it didn't allow them to force production costs on royalty owners. That was the only bright spot in that legislation and no doubt it will not be included when they try to raise the issue againd during a special session later this year. I find it even more disturbing that both Royalty Owner groups in WV signed off and supported the taking of someones minerals. Politicians and Industry types like to say that it is not taking and that it's been supported by many state supreme courts over the years. I advocate anyone who will be affected by this legislation to contact your state representatives and pay the fee to join the NARO, Appalachia Chapter and the WVROA (not sure if there is another for Ohio) and start questioning the decisions of the leadership of these groups. Making your voice heard and advocating for your cause will give you some of that power back.

Good luck and keep us posted on your situation.
Permalink Reply by Joseph-Ohio on April 6, 2015 at 3:36am
Adam,

Reads to me like you're politely identifying / classifying even NARO and WVROA as falling into the category of mostly representative of the interests of 'Politicians and industry types.....'.

Why pay them their fee if they're not representative of the landowner's / lessor's interests ?

Who / what organizations are ?
Permalink Reply by Jonathan H on March 31, 2015 at 4:51am

I found out recently that someone I talked to who presented himself to me as a mineral buyer was actually a mineral broker; when I didn't sign an options contract, he shopped my property around to other buyers without telling me. He claims to get high mineral prices, but the offer he made me was lower for unleased land than what he claims to get for leased land - beware of mineral buyers and brokers!

If you want to sell but can wait, wait until gas and oil prices go back up - they will, and sooner than most people expect.

Permalink Reply by Adam Martin on March 31, 2015 at 5:57am
Here is my experience when it comes to selling minerals. The price qouted for minerals these days, about the best or highest offers I've seen, gernerally land near the 10k to 15k per arce price for unleased land. That is in a depressed market where Oil and Gas prices have been cut in half, compared to prices near the end of summer 2014. If anyone, in one of the sought after areas is willing to part with the mineral for a fraction, and I mean a small fraction, of the minerals true value, then go for it. I think everyone understands that the "market" will generally yield a price that a buyer (multiple offers, don't go after the first offer) is willing to pay for it. Your point about holding out, couldn't be more true. Most mineral sellers know they will not get the full worth or value out of their mineral when selling, but they shouldn't settle for pennies on the dollar. Right now it is a buyers market and if you need to sell for a short term financial gain, each individual or family situtation will dictate. But if you don't need to sell and can hold out for the right time, stick to your guns and make sure you are happy with the decision you've made. I have talked with many brokers and had numerous offers to purchase my families nearly 650 acres of mineral. I know we will never get the total value of it if we ever sold but we certaily wouldn't entertain a sale unless we were getting north of 70% of it's total value. Those looking to pay 10k per arce right now are the buyers who will hold it for 6 months and then flip it for a massive profit. Doubling your money on a 6 month investment sounds like a pretty nice deal to me.

If you view the sale of your minerals for the price you are happy with, you have signing bonuses for multiple strata with others to be discovered (think Rogersville Shale / Rome Trough in 20 years), royalty payments that could span mulitple generations and the ability to avoid unearned income taxes (approx 33%) on royalties vs paying a one time cap gains of 20%... there is a benefit to selling minerals. If you can get a large portion of that money, invest wisely and make sure future generations do see the benefit of oil and gas holdings that have passed from generation to generation, you've made a good choice.
Permalink Reply by Jonathan H on March 31, 2015 at 8:30am

I have set for myself a price I will sell at; it is a large enough sum to set myself up well for the future - short of that, I will keep the mineral rights and lease as possible (they are currently unleased). I recognize if I sell the mineral rights I am exchanging the possibility of a future large payout for a definite near term payout and thereby not getting full price, but to me it is worth it IF I get the price I am looking for.

Yes, I have factored in tax rates and types - the current tax code is complex; capital gains tax rates vary depending on your regular income, maxing at 20% but in some cases being 0%. Also, selling the mineral rights means not having to fight over deductions, fees, expenses, and other gas company stunts, which to me is worth somewhat more of a reduction in value.

Permalink Reply by Joseph-Ohio on March 31, 2015 at 8:56am
Sounds like you've a plan.

Good luck to you Jonathan - whether you sell or lease.

Keep us posted.
Permalink Reply by Jonathan H on March 31, 2015 at 10:19am

Thanks, I will.

Permalink Reply by brandon on March 31, 2015 at 2:15pm

Adam, I thought that that was extremely well said. thank you for your input.

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