How common is it for an operator of a newly producing well to offer a buyout to the mineral owners. Also, what are the normal terms of a buyout?
Hey Charles -
I've been in the oil and gas industry for over 30 years and, while it is not entirely unheard of, it is extremely rare for an operator to try to buy out mineral owners.
Like I tell everybody else that has been approached by someone wanting to purchase their minerals: DO NOT SELL.
Minerals don't do anything but make you money: Why would you sell them?
And, if you ever sell the land (surface), reserve all minerals for yourself and your future generations to enjoy the benefits of.
There are more than likely reasons that they want to purchase your minerals that they don't want you to ever find out about. Potential for increased production or additional zones behind pipe, all sorts of possibilities.
Offering to purchase your minerals while not providing you with all of the knowledge of the issue that they have at their disposal would at least appear to be a violation of the fiduciary responsibility that they hold for their Lessors as a purportedly prudent operator.
Don't sell. Smells fishy.
Charles
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
Mr. Tooke:
Thanks for the advice and I totally agree with you.
Charles Emery Tooke III said:
Hey Charles -
I've been in the oil and gas industry for over 30 years and, while it is not entirely unheard of, it is extremely rare for an operator to try to buy out mineral owners.
Like I tell everybody else that has been approached by someone wanting to purchase their minerals: DO NOT SELL.
Minerals don't do anything but make you money: Why would you sell them?
And, if you ever sell the land (surface), reserve all minerals for yourself and your future generations to enjoy the benefits of.
There are more than likely reasons that they want to purchase your minerals that they don't want you to ever find out about. Potential for increased production or additional zones behind pipe, all sorts of possibilities.
Offering to purchase your minerals while not providing you with all of the knowledge of the issue that they have at their disposal would at least appear to be a violation of the fiduciary responsibility that they hold for their Lessors as a purportedly prudent operator.
Don't sell. Smells fishy.
Charles
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
We keep a file for those kinds of offers. They are fun to look through over the years. Don’t sell. They wouldn’t be making you an offer if they didn’t think you had something interesting, as well as hoping you turn out to be an ignorant fool, is my guess for their motives. Sorry to be so blunt, but that’s typically the way it goes.
Eva:
Don't worry as we would NEVER considering selling any mineral interests. Actually, I posted this after I read on another board that someone had an offer to sell minerals to an operator on a newly producing well. To date, we haven't had a well drilled on our minerals but drilling is starting all around us. Thanks for your reply.
Eva said:
We keep a file for those kinds of offers. They are fun to look through over the years. Don't sell. They wouldn't be making you an offer if they didn't think you had something interesting, as well as hoping you turn out to be an ignorant fool, is my guess for their motives. Sorry to be so blunt, but that's typically the way it goes.