I'm new to all this. I inherited my father's very small, but very special mineral interest in Young County. I'd like to buy more mineral interest, but in other counties - don't want to put all my eggs in one basket. I just joined NARO and am looking forward to learning a lot at the upcoming conference in October.
As an NARO member, I get DrillingInfo access to one county. I need to pick carefully because it cannot be changed and a subscription is very expensive - unless someone invites me to participate in their group membership - hint, hint (I'll be happy to pay)!
So, what counties do you guys think are best for acquiring mineral interest?
I was considering something in the Pearsall or Permian basin, but then I saw an article today, talking about a big discovery in the Alpine High shale. Of course, everyone will probably be flocking there and I don't have a ton of money to spend. I won't be running with the big dogs here. I'm just looking for modest mineral interest (or non participatory royalty interest) - probably under 5K to start.
So, tell me, where you buy mineral interest and why? Thanks!
Danna, it's a tough business you are looking to get into. Having mineral interests of my own, I know places I would buy if given the capital and opportunity and I know how much I would pay. I say go with what you know. If you don't think you know enough, I would reconsider this business venture.
Yeah, being told that something will be too hard for me has always been the best way to inspire me. You have to start somewhere and sometimes you have to get your feet wet to really learn. This is one of those situations. I'm not talking about sacrificing money that I would otherwise use to pay bills. I'm also not planning to make a mint doing this. It's simply a hobby and something that makes me feel close to my late father.
Danna, rather than setting a budget and then searching for mineral interests that may be for sale, my advice would be to explore investing in some of the publicly traded mineral buying companies. In particular, you may want to take a look at Black Stone Minerals (ticker BSM) and Viper Energy Partners (ticker VNOM). These companies pay quarterly dividends, and their mineral holdings include assets in some of the most prolific oil fields in America. Generally speaking, a buy and hold strategy for minerals is extremely difficult to make money on unless you are an active mineral buyer with a lot of resources at your disposal. (including a landman that not only confirms title, but a landman that can also, with reasonable certainty, determine the likelihood of future development on a property) The vast majority of mineral buyers are playing with someone else's money, whether that be public shareholders, private equity money, etc...so they can pay a lot to get what they want, and the competition is extremely fierce in the economically viable basins. Hop over to any of the sub forums that cover the Permian, Eagle Ford, STACK or SCOOP counties, and you'll see post after post about mineral owners being inundated with purchase offers. Some get multiple per day...
As to your question about DrillingInfo. In my experience, DrillingInfo only allows one user to be logged into an account at a time. Therefore, if many users are sharing the same credentials, there can't be simultaneous usage of the site. Maybe that has changed.
I hope my post hasn't been too discouraging. While you may be able to find smaller interests that are not large enough to be considered for purchase by the bigger players, I think your best bet may be to own a small piece of many properties (via the publicly traded mineral companies) vs searching for a willing seller.
I understand the logic behind buying stock in publicly traded mineral buying companies, and I will explore this option, but really, what I'm after is more sentimental. It's a long story, but this mineral interest meant so much to my father and I am so happy to have it - his entire house was declared a biohazard so it is the only "thing" that we have of his. Anyway, it also connects us to a long lost branch of the family that owns the rest of the interest (my grandfather and his family). Long story.
I love the idea of having mineral interest to leave to my two children one day. So, even if I look into publically traded stock, I still want to own minerals that I can pass on. I know it's difficult and there is a steep learning curve, but looking into minerals makes me feel close to my father. It's a good thing.
I would check out Grady County as tons of drilling is going on there. Also Kingfisher County. Similar deal with me. My Dad loved his Minerals even though he only earned may $80 a year for 20 years. He died a few years ago and I began to get offers for my minerals about a year ago starting at $1750 per acre and climbing to about $4500 per acre recently. I sold 1/4 of mine for $5500 acre this week-Grady County-- the group that bought wanted all of mine and my sisters. They are acquiring 100,000 acres (minerals) - this may include Kingfisher county- but they are buying all they can get their hands on. They have hit some good wells in Grady county and it looks to be a good area. I think my dad would be happy I got almost $30,000 for 1/4th of what I have. I still have plenty to earn royalties on and leave to my kids as well. I believe I got a retail buyer that the flippers would sell to on mine. Through bling luck a friend in Arizona knew a minerals buyer in Oklahoma that ended up offering me $1000 more per acre than any offers that came by mail etc.
Like you, I grew up hearing about the oil business from my (grand)father. I too wanted to make my own foray into acquiring minerals, and joined NARO. Buying minerals will not make you popular on this forum, and it is very competitive. However, when I sold an inherited working interest in 2013 (didn't want the liability), I wanted to re-invest the money in minerals. I researched property tax liens/auctions, and that is how I bought some minerals. It was in Martin County, and has turned out successfully. The Permian Basin has a lot of oil that can be cheaply produced. That is where I would look, but again, I know it because I already had interests next door in Midland County.
Would you mind telling me who purchased them? My Sister In Law will have to sell some of her minerals to cover medical bills for my Brother who recently passed away. I am trying to help her get the best offer so she won't have to sell that many since leasing is good income. They are in dewey and blaine county.
Danna,
Welcome! I am also a new NARO member and happy to mention that I just received confirmation of my CMM certification! As Camille Potts mentioned, many of the people on this site and within NARO members are anti-sell. I was born/raised in STACK area, family has minerals and I have acquired some myself. Would be happy to discuss if you want to friend me. Wish I had seen this before Dallas and we could have talked then.
Im in the biz and familiar (somewhat) with Dewey/Blaine. If they own minerals I expect they have been getting offer letters, some groups are better than others. Friend me if you would like to discuss