I own less than three acres of land outside of Orla, Tx. I have been approached about leasing but the offer was pulled at the last minute. I have also been approached about selling. I am trying to figure out what is the best option for such a small tract.
Susan, I may shock some people who think they know me but I think that sometimes an interest can be small enough that it may not be worthwhile entering into a lease contract. The expense of title work you might have to do to receive royalty, a lawyer to assist you with a lease contract, making sure the operator pays you correctly, believe me it can be a lot of headache. I think you could simplify your life and gain peace of mind from a sale providing you insert the proper language that you do not warrant title. that the lessee has satisfied himself as to title and buys at his own risk, then if there are any problems, they are someone else's problems. Mind you, if you were in the business and had many such small parcels, it would pay to keep them but for a single such parcel it may be more headache than it is worth. I and my two brothers just deeded our interest in a small Texas property to our cousin who also owns an interest because I would rather give it to someone deserving than lease it myself and my brothers agreed with me. Finding the right buyer to get the right price is a different matter. I would hold onto the acres until I started receiving offers that were at least in the ballpark of what I thought it was worth. If Chesapeake were to be the operator, I might let it go cheap because I doubt they will pay properly anyway if you leased.
As a general rule, I would not sell if there is alot of production in the area. Your potential royalties from a producing well always far exceed the bonus consideration for a lease or the offer for selling your minerals.
Thanks Pete, something must be up as I am receiving offers almost daily to buy my very small acreage. Think I will hold on for now.
Notice the key word "potential" royalties from a producing well, meaning that there is NO GUARANTEE that your royalties would exceed your bonus. If the well is drilled, though, and it's any kind of a decent one, that will be the case. You could hold on for now but keep the letters/offers from buyers so that if you change your mind and decide to sell you can know some outfits to contact.