"divesting of royalties of insignificant size."

General Mineral Rights Discussion
1

As with many of you, I inherited-which is where the similarity may end-a slew of Royalty Interests in Reagan County, TX. According to Pritchard and Abbott, I have 54 leases in Reagan County totaling $1,880 in taxable value. Of course, I have been receiving solicitations to sell, since my Mom died in 2006. But, more recently, I have been receiving 5-figure offers with fairly specific details about the ownership responsibilities they would like to relieve me of. And, I am at a time of life when a big check would go a long way towards relieving me of things like heavy dental bills, and aggravating home-maintenance costs.

Just for the sake of full disclosure, I should probably mention that in the intervening years since my inheritance became official, I have been pretty oblivious to reading a check stub, or even signing and mailing division orders. Why should I waste a stamp on the possibility of a $5.60 check every year?

But, with these 5-figure offers, I have suddenly become very interested in the oil and gas business, if only to get myself out of it. So, I have been scouring websites, and using the apps, and getting at least a little bit more informed as to what's going on. One of my tinier interests is a lease/well that was recently completed, and has produced over 100,000 barrels in the last 9 months, from what the RRC tells me.

So, my question is, besides doing a sort of e-bay thing and seeing what happens, what are the most significant numbers that I could multiply to figure out what I'd be willing to accept as fair value, should I decide to sell? Net Mineral Acres times XYZ? I'm getting close, but I had to ask, just in case someone here could help me out a little. As far as I know, all of my interests are underground, and it's probably not worth me making a trip to Big Lake to find the original documents. Maybe. I've spoken to one of the fellows who made an offer, and he said my titles were clear, and the geology supported the offer in question.

Many thanks, and I hope I'll get to tell you how I got to play cowboy for real (!) when we'd stay with my grandparents in Upton County every summer. I live in Philadephia, now, and I'm sure you can believe it's different.

Cheers,

Pete

2

I urge you to consider doing much more due diligence before selling your interests in Reagan county. Hilltop Royalties is a forum approved advertiser and could be very helpful. I have zero financial interest in them. Also, please see the Permian Basin Transactions Heat Map in the 7 page pdf linked at the top right hand corner of this page.

3

That's why I'm here. I'll get in touch with Hilltop, thanks! I don't know how to read that map, yet, but thanks for steering me to those sources of information, too. If you could briefly explain it to me, I'd be extremely grateful.

4

You are welcome. I believe the Nov 2016 dated map shows minerals in northern Reagan county selling for between ten and thirty thousand dollars per acre. This may be what oil companies pay for land after going through intermediary aggregators/brokers and may not reflect what an individual could realize. I have very limited knowledge of the prices individual minerals owners might get. I contacted Hilltop, and have been very impressed with the professionalism and expert information one of its principal's afforded me. I was not pressured to sell. It is a very gentlemanly outfit which I am pleased to highly recommend.

5

Very good. I talked to the Reagan County landman from Apache (who is the Operator on nearly all of my leases, and he claimed to be from the same town down there as my mother. He was very helpful, and sternly ;) advised me not to sell, if I could help it. I said I'd read somewhere $30K was not unusual a year ago, and he said "More like $50K, now. It's nuts out here." Or words to effect... Kept me on the phone, and walked me through an investor's report, etc. In the end the message was 'Pete, your little postage stamps are right smack in the middle of some very hot acreage, these days.'

6

I and most likely other forum readers would be interested to hear what you learn. All the best.

7

I also have some minerals in Reagan county, got a few overs but nothing in those ranges. Some areas are hotter than others for many reason, a lot of hot prospect potential, and some very large backers with deep pockets. Their main objective may be to grab the minerals before their competitor does, thus the ridiculous prices, which they'll never make back on oil revenue, not in my life time anyway. The name of the game is to get the minerals for future generations of their family or corporation. I have had some huge offers on minerals in other counties. The question is do I want to save these minerals for my kids or their kids someday ion the future an operator may drill and produce these lands, and hopefully oil may be up to 150 or more usd per barrel . But add your checks and see how long it would take to get 25% or 50% of that lump sum. Or leave it for your grandchildren.