My sibling has received an offer much like mine for the fraction of an acre’s rights in Tyler county WV, it’s to lease or purchase his interests. My offer a month ago was a $300 signing bonus and 15% royalties. Neither of us have moved forward on this yet. If he decides to sell his interest should I even bother to try and buy him out with the net acre(s) being so small? It would take a lawyer to draw up the legal doc’s I assume so it might not be, trying to determine the value here. Also, is it worth it to negotiate a higher payout for myself or will they just laugh at the thought? Any responses are appreciated, TYIA
It appears you received a lease offer, not a purchase offer. A purchase offer would be a flat price or could be based on revenue. A lease offer comes with a royalty. Now, whether to buy out your sibling, if your siblings don’t really want to deal with the oil and gas rights, buying them out may make sense.
Tim, it says, “Offer to lease or purchase oil and gas interests.” Also, the question is mainly for the purpose of the extremely small amount of net acres. I’m hoping for someone who’s been in this position to chime in. Thank you for the response, not many steep up and I truly need advice.
I would take that as saying they are also willing to purchase, but they are offering lease terms. Terms like signing bonus and royalties are really only used in leases. In terms of how small it is, only you can really make that determination. Will it make enough to warrant the paperwork you’ll have to deal with, is that the question?
In terms of negotiation, you’ll never get something you don’t ask for. Worst they can say is no, so might as well ask.
ok, as to purchasing, then I think it is worth it if a) you want to deal with it, b) your siblings are likely going to neglect keeping up with them, c) the price is right, or some combination of the above.
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Depending on your county you could probably get a quit claim deed (print out online or buy online?) and do it yourself. My small rural county accepted mine as have the oil companies. Just be sure to get the land description right , and state “mineral rights only.” As for lease terms, 15 per cent is low. 18-20 is more normal. Also, because their opening offer is probably low ball, ask for $500 and see what they say.
@RAM Thank you, I’ll research quit claim deeds!