Are Lease offers or offers to buy your land flooding your mail boxes?

Texas Mineral Rights Reeves County, TX
#1

i am finding that Offers to lease or sell my land are occurring at least twice a week. In addition, because I’m one of those old fashioned people who has a land line that is listed in the phone book and on line, I also get voice mails begging me to call because their offers are going to be just “too good to pass up!”

i know that I’m not the only one...is it unreasonable for those of us in the same position to compare size of properties, lease time , bonuses and royalties on this site? I know from experience that negotiations are normal. My sister, niece, and I were all approached before we agreed to a lease a year ago. We each owned 1/3 of a 4 acre piece. I couldn’t understand that I was offered $2000, but my sister was offered $8000! To make it worse, I was the one who provided the certificate of heirship, names and addresses of all cousins who also owned property in the same unit, genealogy records, and paid for the overnight charges to accommodate the landman. My niece and I, because we didn’t negotiate, were going to be paid far less. I finally refused to comply any further unless we were all paid identical bonuses. THis is just one example of trying to be reasonable when, as I truly look back on previous leases, I was probably being laughed at for being so naive. We were paid a total of $24,000 for the four acre lease.

im thinking that if more of us were a little open about offers and terms, we would all learn what is being offered in Reeves County. We don’t need to be greedy, but somewhere there is a reasonable rate of return on land that, for many of us, has been in our families for many years.

#2

You are correct. It’s hard to know what’s a reasonable offer and what’s not. It will be interesting to see how much can be made per acre once the wells start pumping.

#3

THats true. It is a gamble for the drilling companies since I understand that the cost per hour to drill is horrendous. However, they do have an advantage since they have engineers, geologists, etc on staff who can at least make a more educated guess than those of us who have to rely on luck and people such as those on this forum who advise us and try their best to educate us and point us in the right directions!

#4

Ms. Leveroni,

Receiving offers to buy, as well as phone calls, comes with the territory. I can understand the annoyance, but from my perspective, I’d gladly put up with landmen if i was fortunate enough to inherit minerals in one of the hottest plays in the US. The “too good of an offer to pass up” nonsense is laughable. Obviously some landmen are just turds.

Many of the form members/land owners are more than happy to compare lease bonuses. If you dig in the “Discussions” tab, there is one that discusses lease bonus prices.

As to lease negotiations- I offer a reasonable price that will not get me hung up or laughed at- and location, skill level of the landowner, etc. determine where that bonus number ends up. Landmen are in a business to make money, as well as the land owner. My strategy is usually to offer the same amounts across the board to family as it’s just easier to do business that way. If they are not in communications, or distant relations, I may elect not to offer the same price initially, but will if they ask. Really depends on the situation. What really gets me hot though, is when I’m dealing with one owner who runs that bonus up and negotiated the lease form, then the next family member wants an even better deal because “they know not to accept the first offer,” even when I’m offering top $$$ on a custom lease form, or they renegotiate A deal after agreeing to a deal. Greed cuts both ways I guess, and not everyone’s “yes” means “yes.”

I guess I strayed off topic there…

Best, Mike

#5

Actually, you may be surprised, but on many of these things, I agree completely! My husband and I own a retail business and my sales staff was always told to hold a profit, but never try to retire on one sale! My first experience was with a landman who contacted me through Ancestry.com because he thought with my family tree I might be able to help him. I got the first email while traveling in Italy! I helped him wade through the family, many of which I had never met or hadn’t seen in fifty years. He was wonderful, thorough, and terribly honest, in my opinion. This was twelve years ago when the action in Reeves County was not at all like today. I’ve been offered as much as $50,000 for the sale of the two acres I own today. I’ve also been told that it would take 30 years to make that much even if they hit oil. The stories are all totally different....I guess that is where my irritation comes in. My son once told a client that there was a fine line between getting a good deal and being a mooch! I suppose this applies to a lease deal as well. But at least in my business there is a retail sticker that gives a starting point so you can negotiate from there.

#6

Always here to help Kathleen, and inform you of all I know in the area, hope y’all had a great Christmas. - Bobby

#7

Thanks, Bobby! You are one of those that I really enjoy hearing from...

#8

Yes ma’am. I guess a sticker does give a starting point! Y’all have a great New Years, and I hope those wells come in as gushers!

#9

Kathleen, just to add my two cents, I agree that it would be of the utmost benefit for those who have minerals to lease/sell to be able to openly read on this forum some ballpark figure of what the going rates are in the area of our minerals. I know in some cases people don't want to post their business online, but it sure is helpful. And honestly, I thought that's what this forum was for, information. Sounds like you've gotten and taken some good advice. Best of luck to you. Linton

#10

THank you Michael. That is a very gracious reply. I didn’t expect less when I googled your name and see what a kind, honest man you are. Have a wonderful 2018...looks like you have accomplished a lot in just a few years.

#11

Thanks. Some of these people on this forum should be teaching classes! They are not only knowledgeable, but very generous in pointing out things we really need to know.