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I have a 15% mineral acres ownership in Section 5 /Block 105, north of Fort Stockton. After decades have offer of $650/acre surface and mineral, or $350/acre surface and $150/acre for 3 yr lease of minerals (no royalty mentioned...). Looks like poor offer. The prospective buyer now has 80% ownership of the undivided interest of the 640 acres. Are there current developments in the area and is anyone aware of current pricing of such land? To my knowledge property is not producing at present. Can current owner legally dissect/partition the land for use?
The offer seems very very low to me. I have property in Pecos and Reeves County, and wouldn't take less than $15k/net mineral acre, IF I were interested in selling. I am not a lawyer, so I don't know abut the partitioning issue, but as an undivided interest only, you cannot be partitioned without an agreement from you as well. I have property that was partitioned years ago but it was an agreement by all parties, and there was cash exchanged to make it happen.
Thanks much for the advise. I believe a land man can assist in the initial direction of negotiations, then a qualified lawyer to review final documents if we get that far? I have been in search of referrals, have possible leads...
Sue, I'm not quite sure how they can offer a lease without mentioning a royalty, so unless they do so, I wouldn't take them seriously. Here's my two cents; your minerals are somewhat in the fringe area of Pecos County, meaning more profitable wells have been drilled further West towards Reeves County. Brigham Resources along with a few other reputable operators leased up a lot of land in your area last year. Brigham sold this leasehold to Diamondback E&P and although they haven't developed much of it, they did drill a well 2 miles South of your minerals called the Elijah 2-6 and said well has produced over 130,000 barrels of oil and 234,000 MCF of gas since December 2016. Not phenomenal, but by no means a weak well. Diamondback also has a handful of active permits just three miles West of your property, which is encouraging. I believe lease offers in this part of the county last year were going for around $2,000 per net mineral acre. As far as contacting an attorney, I'd suggest Wade Caldwell. Mineral owners in this forum speak very highly of him. Best of luck to you.
Thank you for the information--- so if lease offers are about $2,000/net mineral acre, what would be estimate of entire surface and mineral sale price, vs estimate of surface sale price with the lease option of $2000/acre? (this is all new to us). We're still in investigation stage, and deciding selling outright vs surface sale and leasing. can we lease without selling surface?
Sue, lease bonus offers are probably higher than $2000. In your area, there are a lot of State of Texas lands where you own surface but not minerals, the State does. You get paid 50% to act as the State's agent, but if you sell the surface, you lose that right. If you actually do own the surface and the minerals, you can lease either or both, but generally, if you have an oil and gas lease covering your entire property, about the only use for the surface is cattle grazing or farming, or in some cases, leasing the surface for roads, pads, etc, as well as pipeline and electric easements.
It isn't enormously complex, but it sounds like you could use a consult with an attorney who deals in west Texas land and minerals.
Click this link to open a map which will center on what appears to be a good horizontal well a little more than two miles south of your section. As James Marrow has suggested, consult with an oil and gas attorney before signing anything.
Click on this link to open a map which will center on a dry hole drilled on your section in the year 1983. Given that you own an undivided interest in the surface, I wonder if the dry hole can be of value to you as a saltwater disposal well?