Considering Selling Part Of My (leased)Acreage

Just wondering if anyone here has had experience/success in doing this?

Six tracts ranging from 5 acres to 20 of 68.75 acres. Most are 1/4 royalty with one being 1/5. Leased to Clayton Williams, Browning and Anadarko.

I have already had some unsolicited offers as the acreage is in and around new wells etc., but still not drilled.

My email is:

I got one of those unsolicited offers. I called and agreed to listen to his offer, just out of curiosity. He never called back to make one, he just sent a sales contract for an amount of acreage we didn't agree to, on letterhead from a different company than the first inquiry, for a total sales amount slightly LESS than the bonus I received on the five year lease I signed last Spring. I would have preferred getting the offer on the phone so he could hear me laughing.

This may not be the best venue for offering sales.

A couple of months ago I asked about how to determine the best price & got no response, but did get a couple of communications via private message that went nowhere.

It seems that nobody believes that someone actually wants to sell their rights unless there's something wrong. :-/

I can only guess that the West Texas heat has some sort of effect... ;-)

The last I heard was that a good sale price was 3-4 times the lease bonus.

As for me, I'll hang on to my land until my will gives it to my family if I don't get some sort of a serious offer.

I understand completely, but i am also a believer in risk control and while prices are high, it never hurts to take some off the table and keep some for the hoped for upside.

One or two poor completions can hold a region or area back.

Not that this is a concern right now, and I guess that's my point.

The only rule of thumb on pricing mineral interests I've ever seen was to take about 2-3 times the annual production. That naturally assumes there is production, and also that you know for certain no further oil/gas deposits are underneath the surface. Which you naturally can never know.

After many years of reading about such things, I've come to the conclusion that a mineral interest is worth what you get for it. And that it is, as a rule, not a good idea to sell one unless you are in dire need of cash right now and thus must sell. Otherwise you should think long-term, and that means not only you yourself, but also your descendents. Mineral interests are not short-term investments, and it's impossible to set a price on them since there's no market like there is for stocks and bonds.

There's one more consideration in your case: if the tracts are already leased, they're less interesting to a potential buyer because he will be bound into a lease he may not like, and will not have the chance to lease the interest himself, immediately gaining a bonus that might repay some or even most of his purchase price.

Good points, Charles, but I'm not sure about leased land being all that unattractive.

I would think that leases that are 3+2 years would still be attractive. At the end of the 1st 3 years you have the potential for another bonus and, if not, the land is free to lease (or it's free from a lease within 2 years or less).

That assumes the lease is not "held by production", and depending on the lease that may not even be "in paying amounts". If there is any production whatever - maybe even in a pooled unit - the lease could be held for decades. A lease doesn't simply expire at the end of the primary period unless nothing at all has been done either on the tract or in a pooled unit. And even then, the lease can be extended if the lessee is engaged in operations. It would depend on the exact circumstances whether a leased interest would still be of interest to a potential purchaser.