Hi there!
My husband and I have very little knowledge about the oil/gas rights his family has on about 16.5 acres in Grady County. We've had a few small lease deals over the years and see small royalty checks (a couple hundred dollars a month). It's really not produced much over the past decades.
Over the past few years we've gotten more optimistic with the drilling orders and lease renewals and have been hoping we would see an increase in royalties. No such luck.
Recently we were approached with a fairly reasonable offer to sell the rights outright. We are considering selling at least a portion of the acreage. It's the gamble of taking the money now that we could invest into something higher-yield versus holding out for something that may never happen. I know this is the crystal ball everyone wishes they had. However, I feel like we are even less knowledgeable than everyone on this forum.
We are curious - if we were to hold out and have a 20% royalty negotiated on the 16 acres, what kind of royalties could be expected to be paid "if" a successful well was drilled? Part of it is not knowing what the future payoff could be. We've been assuming it could be reasonable but realize that may be overzealous ....
Any insight would be greatly appreciated!
Lyndsay
An offer to purchase your minerals could be an indication of positive activity in the area.
I don't have a crystal ball, so use your common sense.
If someone wants something you have, doesn't that make you think past square one? And, always remember to use your power to negotiate in YOUR best behalf.
Good luck,
Pat
PS. Why anyone would want to sell their mineral interests will always be a mystery to me.
Hi, Lyndsay -
I agree with Pat, but there are times when life's circumstances make selling minerals and royalties necessary.
If you will send me the legal description for the 16.5 acres I may be able to find out what is happening in your area that would make your mineral interests so interesting to someone that they would offer to buy them.
If you want to send me the information privately, accept my invitation to become A Friend on The Forum and send it to me that way.
Hope this helps -
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
Dear Charles.
You're one of the reasons I like the Forum. I've learned a lot from the sage advice given by you and the others.
Thank you for the many times you've helped me.
My best,
Pat
Aww, shucks Pat... Wern't nuttin. Toe-Toe...
And I don't know about "sage advice". I'm really just a run of the mill old, fat, unemployed, alcoholic Landman with too much time on his hands.
But complements are always nice to receive - everyone needs acknowledgment. So, I thank you.
I enjoy the advice you allow people on The Forum as well. And you photograph a whole lot better than I do, too!
Charles
Lyndsay D.,
If your thoughts are to "take advantage of an offer" thinking you know more abut the minerals than the offeror, forget it. I have an uncle that loves to have people sell income producing assets. He gets to double dip at the expense of both buyer and seller. Unsolicited offers are too frequently an offer to tie up mineral rights while looking for a greater fool rather than actual trades of cash for assets.
On the other hand, if you have a genuine need for after tax cash in preference to waiting for mineral income that you will never control; such as college tuition, a bucket list trip, or anything you would personally enjoy doing if you had the money, have an expert evaluate your property in light of its near term cash value after taxes then decide if the trade is in your best interest.
For the inexperienced inherited mineral owner not bound by conscience to hold inherited minerals, you owe it to yourself to understand the worth of the minerals in a discounted value then find or get help finding a legitimate buyer or lessee that will pay a fair price to take your position for an amount you can use. Then take the money you need, enjoy it and never look back.
Plan ahead. Conversion of assets to cash you can control and can grow is a personal preference question. Greed should have no place in the process. It is short lived.