I am new on this discussion. I hope I am doing this correctly and asking the right questions. I have an offer on two sections in Garvin County, Oklahoma. Together they comprise my ownership of 102 acres. One is Section 9, Township 3N R3W and the other Section 16, Township 3N R3W. The letter of intent arrived today and I have some concerns. Am I getting a good price? There is a producing gas well and many others in the area. My percentage of royalty is very small so my value is in the minerals. Should I get an attorney to help me? I don't want to lose the sale but I can't afford thousands of dollars in fees. I have already told the company I will not warrant the minerals because they are inherited. However, the deed has a warranty clause. May I also ask if anyone knows other mineral buyers that are honest and will give a fair price? To expound a little does this sound fishy. The company told me once they find out if I have a 1/8 royalty or 3/16 royalty I will get $600 more an acre for the acreage with the royalty. They neglected to put this clause in the letter of intent and I have 20 days to respond. Thank you for any advice you may have. If anyone also knows of a reputable and fair attorney I guess I best look into that.
First of All they are your minerals so YOU set closing timelines. Don't let them be pushy, if they want it they will wait. You are in a hot area
Secondly they are asking you to sign that LOI (Letter of intent) because they don't want to pay for title and then lose the deal with you, so there is no reason at all for you to be required to use an LOI. Tell them that the first person that has a CHECK ready to close is going to get it see how serious about the LOI they are then.
Third 1/8th royalty is 12.5% and a 3/16th royalty is 18.75% so you should consider any current offer that they give you on a 1/8th royalty is only 2/3rds of what it is worth at the 3/16ths royalty. (probably more) But like I mentioned above don't make an agreement on the Royalty amount just tell them to figure it out and get a check ready.
Forth ask them to provide you the title docs so that you can verify yourself. They don't really have too but just ask for your Run sheet.
Lastly DO NOT give them an original deed without the Moola in your hand!!! Sometimes land shops need copies of executed docs to get funding started but it is easy to fax a copy and trade the original when you get your $$
tough call on needing a Lawyer pretty straight up 1 time deal. but I know a good one if you need one, and I don't stand to profit at all from recommendations
Jay, I'm no expert, but dealt in this o/g enough to say, "yes, yes, yes", get a good attorney. Garvin County has around 190 mineral members, so, I'd think someone in that county would respond and probably advise a local attorney for you. The 20 days to respond is sometimes a "push" threat. I'd be interested in knowing what deadline they are trying to meet or is that an intimidating sale tactic. I don't know what current mineral sales are in your area, but last fall in Payne minerals were selling for 4K+per acre. Just one county west they were getting 8K ac offers to buy and $800-1K lease offers. BUt, that was before the oil bust, and I know many offers are much lower today.
Just be aware that the companies currently offering to lease or buy are making 2010 offers - will full intention to get their investment return within a day or so, because they have their investors waiting on the sidelines to pay a small profit, and probably sell it again.
Good luck. When you get some inside local information you'll get a feel of current going rate/prices, and who's trying out to make fast money off the (green) mineral owner wanting to sell. Sorry I can't help you more. We've all been there at one time.
Well a few things have changed. Echo Minerals came back and said in that particular section, township and range I only own 1.5 nma. However I have some other ownership in Garvin. So instead of the 102 nma they said they thought I owned it was reduced to say the least. I acquired it through my mom and it has been split up over time. Anyway, they were offering $2,300 nma and if my royalty was at 3/16 on a well on the property they would pay $3,100. I think this is kind of low.
Thank you Jodean. I appreciate your help and advice. I will certainly continue to explore this site to learn more about all of the counties where I have minerals. Again thank you and Merry Christmas!