My brother and I have about 60 acres of mineral rights in a section, currently under lease. On a group I asked what activity was going on because we received offers to sell the mineral rights for $4,000 per acre.
One of the reply's stated "............there are no current plans to drill... I and a business partner own the controlling shares of leasehold in the section and are sitting on it until we get a better offer .. At that time we will assign the oil and gas leases and choose the operator ....it's been quite an expensive venture thus far."
How does this work and what does it mean to us?
I have since learned there is an application in for a multiunit horizontal well two sections away and one section away, same direction, there is relief being sought to establish a new spacing of 640 acres.
Gary, a speculator could lease up the majority of mineral rights in a drill spacing and they would be able to pick the offer from any particular operator. It could be a nice position to be in for them, it could also crash horribly if all the operators are annoyed and wait for the leases to expire and lease the acres themselves. Since these people can't seem to make a deal, it's a real possibility that they will accomplish nothing for their expenditure of money. Or should I say nothing good? They could lose it all or wind up paying double by having to lease it again to maintain their stranglehold. If the mineral owners in that pool knew this speculator was blocking exploration, they might not lease to them again anyway. Oil can be tough business.
Gary,
I assume you got an offer for land in Grady County where I have a little knowledge. Based on that assumption, don't let a buyer's words influence your decision. Hire some good geologic help to establish the potential you may get from production based on science and economics THEN evaluate your personal opportunity cost in selling. Maybe it is worth it to sell in a way you can have your cake and eat it too. Maybe not. Whatever, you decide, make sure it is in your best interest and not the buyer's words. Oil business is a tough business. It can also be a dirty business if you don't know what your have to sell. Get informed.