Custer County 03-14N-15W

We have a lease (about a year old) at this location, 20 acres. Continental intends to drill it.

We took the first lease offer and was disappointed to receive at least 8 more offers to lease at much higher rates.

Since we have leased, we have received 8 offers to purchase some or all of our mineral interests here, the highest being 8500 per nma.

My question is how much is it worth?? The minerals in the ground?? I have thought about selling half, but countered the 8500 with 10k per nma and have not heard back.

Any advice will be much appreciated,

Thank you,

Brian Jones


A legitimate buyer will value your property on the basis of PROVED UNDEVELOPED RESERVES (NOT RESOURCES) known to exist. Buyers then discount for the risk in holding for development. Of course buyers will not offer that value immediately so you must find the buyer that needs your property then convince their management that you are a willing seller and demand a fair price based on PUD reserves. If you treat your property as something to be sold at auction, you will never realize fair market value but may get the best of the worst non-science based offers and the flippers get the rest.

If you have the patience to wait until your lease expires or CRI actually drills and completes, legitimate buyers will value your share of PROVED AND PROVED-UNDEVELOPED RESERVES discounted by your royalty rate and lease term they will inherit among other considerations.

I trust you read and understood the provisions of the offer before countering including the liability to you implied by the proposed mineral deed. It may be too late, but if you make another counter, make it complete with your terms otherwise you may be subject to the terms and conditions of the original offer but with a new discountable price. Know the rules. Guessing creates great dismay for the seller.

At these prices, some professional help may pay off big time to insure you get what you think you are bargaining for. Land agents have expertise behind them so don't put yourself at a disadvantage. Above all, know that selling minerals is not like selling objects you can touch and feel over the counter.

Gary L Hutchinson

Thank you Gary for the good information. I think you are right and patience on these things is indeed a virtue. Patience on our part just doing the least would have easily gotten us 20k more, but not being familiar with how these things work we most definitely had our lease flipped. Live and learn I guess.

Thank you again for all of the information, my wife and I are completely new to this.

Have a good Saturday,

Brian Jones

IT'S WORTH WHAT THE HIGHEST OFFER AT THIS TIME IS!!! YOU ARE PROBABLY TALKING ABOUT FUTURE POSSIBLE WORTH-----SOMEWHERE BETWEEN MAYBE $25000 AND $2000. Unless you are going to live forever, the worth of minerals is exactly what the best offer is TODAY!