I have always been of the opinion of never selling. However, I have received an offer for 14 –2N–5W that is tempting. Is it ever a good idea to sell? I was told that there are not many leases going out and things have slowed way down. If that is correct, why are the oil companies offering to buy. Can anyone answer that and should I consider selling this?
I’m no expert, but my opinion is that unless a person urgently needs the money, it would be a mistake to sell. We never know how much it may be worth in future, and when it’s gone, it’s gone, gone, gone.
Oil went over $70/bbl Tuesday. Nat gas is over $3. Prices may be driving exploration projects.
I have received quite a few offers on sections that have one good horizontal well and the potential for more. We just ignore them as we do not have a current crisis need to sell. There are more creative ways to handle that situation if we needed to where we could take a loan against the production on the one well for a certain period of time and keep the minerals.
Martha, leveraging an asset for a Loan, certainly divergently creative . Most Insightful. Tks John
Some of the knowledgeable banks in producing areas can do that sort of thing and there are several firms out there that do it. They essentially buy your production royalties at a certain set price for a certain amount of time and pay you upfront for the royalties. There is a “small” fee attached which is the interest for the loan. You do not lose your mineral rights or the royalty stream after the amount of time. Best to get accounting help to handle the potential taxes consequences and legal help to make sure the wording on the document is exactly as you want it to be (and you are not selling your rights). One could easily go down a dangerous path if this is not done correctly.
I feel like the consensus on this forum is to tell mineral owners to never sell, I think people should be honest about the people who’ve missed out on insane amounts of cash due to not selling. You’re correct that majority of the time, it is best not to sell for a lowball offer. But, I don’t think people realize how many people that own in say, Continental’s Springboard 1 project live with the regret of “never Selling” when they were offered $40,000 per NMA, only to have Continental drill a parent well, maybe 1 child well per section, and basically abandon Springboard 1. Or the ppl who turned down $6500 per NMA, in Love county in 2019, Operator dismissed applications and now have 0 production and can’t get $1500. It’s not always as black and white as you all make it seem. Some minerals owners who have sold, have made out like a bandit, while the mineral co lost their butts.
Also a valid viewpoint. Each family has to decide what works best for them given the information they had at the time.
Most of our minerals are in 2n 4w and I was of the opinion never to sell until a couple of years ago when the offers reached up around $20,000 plus an acre. We didn’t need to sell but felt at our age it would be to our advantage to sell what we had in one section and have the cash to pass on to our children rather than to pass on the royalty that would keep dividing over time and just end up as fractions of an acre to the grandkids. We haven’t regretted selling those 7 or so acres especially when oil went down to 0 and below in 2020. We still have acreage in that area and will probably hang onto it unless we get an offer we can’t refuse (as they say) lol
I might add that my grandmother on mom’s side hung on to her royalty and after it was divided among her 8 children and then to all their heirs we ended up with enough that they finally sent us a check for about $100. after about 8 years accumulation. lol