Castlerock has sent an unsolicited offer for my 3 acres of mineral rights in Ellis County for what seems like a fair price. The process is unfamiliar to me. Have the deed notarized, submit the deed and a check to the bank that will process the transaction. Is this a usual transfer of a deed and payment?
No, most companies will want you to send them the deed. After they receive it they will pay, maybe. There have been many horror stories on this site where a deed was issued but no check came. Often it is better for an attorney or accountant to exchange the deed for a check if you are unable to do so because of distance from the buyer.
This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.
The first thing you need to do is find out what production you might already have, find out if you have unclaimed funds and find out what is about to be drilled. There is a new Cherokee horizontal play that is developing in parts of Ellis county. If you want to share the section, township and range, we can look up and see if there are pending wells on your acreage or nearby.
Many offers come right before the drill bit, tend to be lowball to see if anyone will bite and they won’t tell you about new wells because they want the profit from them.
Get more informed before you decide to sell.
The mineral rights are in Ellis County, Section 36-20N-25W We are currently receiving royalty payments from Unbridled Resources. Thanks for your advice.
You currently have one horizontal well. Upland and Mewbourne have quite a few permits nearby to drill the Cherokee. If you need to sell, then you can. If you don’t, then you may have infill wells down the road. Operators frequently buy up acreage right before they have a drilling program.
Just curious about the criteria for determining a fair price. People often rely on decimal checks to gauge the future cash flow from the mineral rights, but this method might not provide accurate estimations.
If you do decide to sell, just provide the Buyer with a COPY of signed deed. Don’t ever send originals until you have check in hand or money has been wired to your bank account.
What the buyer considers “fair” and what the seller considers “fair” may be two different numbers. Buyers have different strategies. Some buy and flip. Some buy and hold. Some give an offer based upon the expected royalty streams discounted by a certain factor. Rarely, do they offer what the potential revenue stream will be with new infill wells. That is what they plan for making a profit.
It’s a contrast between immediate payment and future money. Sellers see Money-Now as a secure option, while buyers view Money-in-the-Future as risky due to factors like inflation, well performance, economic conditions, and the operators’ field development budget, etc…
Thanks for your explanation! I was wondering why s/he considered the offer was fair.