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offer to purchase minerals
I leased my minerals last year in Lynn county and now have received an unsolicited offer to purchase my minerals for $950 an acre. Has anyone heard of other activity like this in Lynn County? If so what was the offer?
Carl Odom
Replies to This Discussion
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Permalink Reply by charles s mallory on -
Carl:
Could you provide additional information as to the exact location of your minerals (State, etc.). Myself, as a mineral owner, would advise not to consider the sale of any minerals but that's my personal opinion. You can read additional posts on this forum that dicusses this subject in depth.
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Permalink Reply by r w kennedy on
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Carl, I won't even go into whether you should sell your minerals or not. I will point out that since you have leased them already that you have conveyed 100% of what you owned (with only the possibility of reversion) so now you are in essence selling your royalty stream and a chance at full ownership. In my opinion, you will not get as good a price as unleased acres. What I think you should do is what you think best based on whether you need to sell or are merely considering an opportunity. If it's just an optional opportunity, I personally would wait for the lease to expire, to extract the full amount from a sale. The minerals may appreciate considerably in the time it is leased, and if a well is drilled and you are receiving royalty, your desire to sell may disappear. Be wary of unsolicited offers, many people get them just ahead of a well or the division order for a well. I would investigate to see if there is a well or activity in the area. I, and others frequently receive mass mailing lowball offers to buy our mineral interests, I have never yet seen one I thought was even close to a good deal. Some of these offers come from Dale Resources, Permian Basin Acquisition, Ageis, Bridgeport and so forth. Good luck with your decision.
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Permalink Reply by jody kuntz on
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Carl, I agree with Mr. Kennedy, as I have received offers such as this for my unleased mineral acreas: $1650 to lease, and $2000 to buy! My acreage is permitted to drill, so where do I sign on the dotted line to sell for $2000/acre??? Ridiculous. Like anything, companies are trying to buy for as cheap as possible, when these minerals, over the long run, yield way more than $950/acre or even $2000...Minerals are real property, and are not just oil or gas, it goes to the core.
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Permalink Reply by Gary L. Hutchinson on -
Carl,
r.w.Kennedy has the right idea. Evaluate what the minerals are worth to you long term, your current needs and expectations for your lifestyle, and the emotion of "sellers remorse" Know beyond a doubt that the potential buyers are motivated by economic gain and that their only emotion is in the risk to reward potential. In other words, guard against the cost of loosing the opportunity of your ownership of the minerals, (your opportunity cost in selling them).
If you are in a hot area, there are several ways to realize some addition al cash without giving up the long term potential of mineral ownership.
Good Luck with your decision
Gary L. Hutchinson
Minerals Management
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Permalink Reply by Mineral Joe on
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I buy minerals or mineral rights all over the USA and sometimes sell some of what I purchase. I sold some last year that had not been drilled on (no activity) in 40 years. They drilled a well last year, it was a dry hole. I laughed all the way to the bank at the others who thought never sell. It can go either way so if you are considering selling check around with other buyers like put on mineralhub.com and maybe only sell half. I sold half of a 200 acre tract in Weld County Colorado that had never been drilled on, but it was permitted for a horizontal Niobrara well, they drilled a dry hole. Needless to say the minerals are not worth near as much now as they were. There is never a sure thing, hardly. You may have received an offer because of permitting in the area or other activity. Use your head and do research and then follow your heart not what I or others here have suggested.
Mineral Rights Buyer
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Permalink Reply by Carl odom on
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Thanks for your comments.
Carl odom
Mineral Joe said:I buy minerals or mineral rights all over the USA and sometimes sell some of what I purchase. I sold some last year that had not been drilled on (no activity) in 40 years. They drilled a well last year, it was a dry hole. I laughed all the way to the bank at the others who thought never sell. It can go either way so if you are considering selling check around with other buyers like put on mineralhub.com and maybe only sell half. I sold half of a 200 acre tract in Weld County Colorado that had never been drilled on, but it was permitted for a horizontal Niobrara well, they drilled a dry hole. Needless to say the minerals are not worth near as much now as they were. There is never a sure thing, hardly. You may have received an offer because of permitting in the area or other activity. Use your head and do research and then follow your heart not what I or others here have suggested.
Mineral Rights Buyer
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Permalink Reply by Cara Simmons on
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How do you balance selling versus keeping? Seems like there should be the right time to sell just like real estate?
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Permalink Reply by charles s mallory on
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Cara, there is alot of difference in selling mineral rights vs real estate. The characteristics of both are different since mineral rights have the ability to eventually pay an amount for years to come whereas the sale of real estate is a one time transaction. In answering your question, selling vs. keeping, I believe that Mr. Kennedy and Mr. Hutchinson have covered that in their responses. This decision of course depends alot on what $ amount per acre is being offered. In most cases, the purchaser has done their homework thus knows the long term potential of the mineral purchase and guess who most likely will get the short end of the stick. The only sure positive factor for the seller of mineral rights is instant cash today. If I were considering selling mineral rights, I would do extensive research on what their value could be over a period of time and add some extra $$ onto that figure.
Cara Simmons said:How do you balance selling versus keeping? Seems like there should be the right time to sell just like real estate?
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Permalink Reply by Mineral Joe on
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That analogy is not correct as real estate can be rented forever and mineral rights may never pay a dime and even if it contains oil, gas and other hydrocarbons, it will eventually run dry. I have some minerals I'd love to sell to the people on here that say never sell or that your not smart to ever sell but I bet they wouldn't buy. They probably didn't pay a dime for what they have, they probably were given it for free thru inheritance and never had to put their money where their mouth is. Those who didn't sell their Barnett minerals when offers were to the moon and natural gas prices where $12 and headed higher made a foolish mistake. Offers, appraisals, what ever metrics one uses to value net worth of an item are but a fraction of what they were on those minerals. To have said never sell your Nasdaq tech stocks back in the year 2000 was also very foolish, here 12 year later it is still down almost 50%. Those who never sold their real estate and instead kept buying more in Vegas or Detroit Michigan or other parts of the country where housing prices are now down 54% like I read this morning on Yahoo were also fools. Never sell is for fools. There are no absolutes. No one can predict the future nor time the markets every time so I don't see how these people can say they know and it is never sell.
Sorry guys, no offence meant, just being real and factual.
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Permalink Reply by r w kennedy on
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Joe, by that token, you should sell everything you have, don't wait, do it now! You may never get another chance, do it now before you lose out. Put your money where your mouth is. No offence meant, I'm just flipping the script on what you are saying.
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Permalink Reply by 6th Generation Texan on
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Some things in life are not for sale. You must not have inherited anything to disparage those of us who did. My parents worked hard and sacrificed much for the land they had and made a living off of. All of us children helped them and made sacrifices too. I don't consider myself a "fool," as you call it, for not selling my minerals. If I don't benefit from them, my children and grandchildren will inherit them like several generations before me.
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Permalink Reply by Mineral Joe on
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Anyone can surely tell that also (what you just said) would be foolish and I never said sell everything so it wouldn't be putting my money where my mouth is. I also paid for everything I own (minerals included) with money I earned, I inherited nothing, there is a major difference from whence I speak. You try to disparage and ridicule me with your sarcasm. I know your a huge contributor here and help a lot of people and that is great but don't put me down for telling the truth and I am sorry you can not handle the truth because it goes against your beliefs and feel you must attack me personally.
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