I think he buys minerals at $1800/acre. My cousins sold their minerals (idiots) at $5,000/acre and one of them is in the Blackshear unit…I did not know until after….yeah it’s a lot of money upfront….but you are screwed in the long term.
Unless you’re in a tough financial situation, selling your minerals is never a good idea in my opinion. Like you said, you can get cash up front but the long term value goes poof. However for some, a bird in the hand…
One other consideration is the tax implications. It’ll all be in one tax year. It’s certainly not eligible for a like kind exchange. Oh and yeah, if you’re on Medicare your premiums will go up as well. At least if you’re lucky enough to get royalties they’ll be spread over several years.
Mineral rights often qualify as real property and are eligible for 1031 gain deferral.
Sounds like I stand corrected. Thanks for the information. One follow up question though. I hear/read that the definition of what’s actually ‘like kind’ has really been tightened up over the past year e.g. commercial vs residential. (Not looking for free advice just curious.)
You’re correct – there was significant changes on what property qualified for 1031 treatment after the passing of the TCJA. Personal property does not qualify, only real property. Real property is generally land and anything affixed to land including rights of ownership.
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MR_ML Don’t know we’re people are getting there information this web suite looking more like FB. Was watching the block going up and down all day. Must of made it to rig when the last casing going down the hole this evening. Iam sure 13 truck loads don’t just disappear. My guess monster rock might be finished after it gets cemented. Sure hope I don’t miss that rig walk over to Reisner location.
This morning somebody moved electric pole are fence post mister rock rig not the the right spot looks 10 ft off blow out preventer not tied to anything. Yes, trying to find the right spot for the Reisner location. 10 feet to the north. O boy 18 wheeler just pull in with 95/8” casing for the Reisner location.
Milton, or anybody. What’s going on at Pecan Farm location? I got an email from a casual drive by of a lot of activity-lot of truck traffic and rig activity. I am in Houston but have minerals nearby and depend on this forum for all my information. Please keep it coming.
Sorry I don’t have any pecan farm information but thought I’d mention that I got an offer to purchase my minerals for $2500/ac. This is from Vector Energy Partners in Ft Worth. They said that they’re purchasing Redhawk leases in Fayette County. I’m the second person I know of who got this offer.
I may have mentioned this on another thread earlier, but I am betting that Vector Energy is backed by EOG. Common for operators to try to pick up minerals to increase their net revenue interest in the area.
If this is the case, direct indicator that EOG likes this trend / play / area.
Really interesting point. Potentially similar to Rockcliff and Mesa in the Haynesville. But agreed, if there’s interest in purchasing minerals, then that could certainly be a positive sign. Fingers crossed!!
FYI— EOG just permitted 3 new units that are between Francis pad and Blackshear pad. These are the units to be drilled by rig #1209 once it is finished on the Francis pad, which should be about 4 weeks from now, they are on the 3rd unit on the Francis pad now, with 1 more to go, and it will be moved soon.
There should be at least 1 more unit getting permitted from EOG very soon, and we are still waiting on the new Redhawk permits.
Where are you seeing these new permits? I would like to stay up to date, and I do not see them on the RRC website. Thank you
EOG also did the Chapman unit to get the 4…I need to see if this matches the maps..
Redhawk’s new permits around the corner ?
https://webapps2.rrc.texas.gov/EWA/drillingPermitsQueryAction.do
You can search by operator and see the permitted wells. You will catch permits that have just been submitted before they go to mapping, so this is the place to find the submittals as soon as the operator sends to the RRC.